REPUBLIC OF THE PHILIPPINES

SUPREME COURT
MANILA

FIRST SARMIENTO PROPERTY

HOLDINGS, INC.,
Petitioner,

-versus- G.R. No. ______

PHILIPPINE BANK OF
COMMUNICATIONS,
Respondent.
x----------------------------------------------x

PETITION FOR REVIEW

Under Rule 45

PETITIONER, through counsel, to this Honorable Court, most

respectfully states:

NATURE OF THE PETITION

1. This is an appeal by way of petition for review on certiorari

under Rule 45 of the Rules of Court which seeks to reverse and set

aside the decision dated April 3, 2012 and Order dated July 25,

2012 of the Regional Trial Court of Bulacan, Branch 11 dismissing

petitioner’s complaint for annulment of real estate mortgage for

lack of jurisdiction, certified xerox copies of the Decision dated April

3, 2012 and Order dated July 25, 2012 are hereto attached as
Annexes “A” and “B”, respectively, and are made integral parts

hereof.

2. Since an order dismissing an action for lack of jurisdiction

is a final order and the “remedy against such a final order is the

ordinary remedy of an appeal, either solely on questions of law - in

which case the appeal may be taken only to the Supreme Court -

or questions of fact and law - in which event the appeal should be

brought to the Court of Appeals.” (Marilao Water Consumers

Association, Inc. vs. Intermediate Appellate Court, et al, September

9, 1991).

3. The issue of jurisdiction is a question of law and thus,

direct resort to the Honorable Supreme Court is proper. (Gomez

vs. Montalban, 548 SCRA 693, 702 citing Municipality of Kananga

vs. Judge Madrona 402 SCRA 330, 334 and Bukidnon Doctors’

Hospital Inc. vs. Metropolitan Bank and Trust Co, 463 SCRA

222,232)

STATEMENT OF MATERIAL DATES

1. On April 18, 2012, petitioner received the Decision dated

April 3, 2012 of the court a quo dismissing its complaint for

annulment of real estate mortgage due to alleged insufficient

docket fee. On April 30, 2012, petitioner’s filed a motion for

2
reconsideration. On August 3, 2012, petitioner received the Order

dated July 25, 2012 of the court a quo denying its motion for

reconsideration. Hence, this appeal by way of petition for review

on certiorari.

THE PARTIES

1. Petitioner First Sarmiento Property Holdings, Inc.

(“FSPHI”) is a domestic corporation duly registered and existing

under Philippine laws with principal offices at Verde Heights

Subdivision, Gaya-Gaya, City of San Jose del Monte, Bulacan. It

is represented herein by its President who has been authorized by

the Board of Directors to cause the filing of this petition, sign the

verification and certification of non forum shopping, a copy of the

Secretary’s Certificate containing the resolution of the Board of

Directors is hereto attached as Annex “M”.

2. Respondent Philippine Bank of Communications,

(“PBCom”) is a banking institution duly registered and existing

under Philippine laws with principal offices at PBCom Tower, 6795

Ayala Avenue corner V.A. Rufino Street, Makati City, where it may

be served with processes of this Honorable Court.

3
 BRIEF STATEMENT OF THE ANTECEDENTS

1. On January 2, 2012, petitioner filed a complaint for

annulment of real estate mortgage against respondent PBCom

before the Regional Trial Court of Bulacan which was docketed as

Civil Case No. 04-M-2012, certified xerox copy of the complaint is

hereto attached as Annex “C”;

2. Before the complaint was filed, petitioner filed an un-

docketed urgent motion to consider the value of subject matter of

the complaint as not capable of pecuniary estimation pursuant to

the ruling of the Supreme Court En Banc in Lu vs. Lu Ym, Sr.,

February 15, 2011, (643 SCRA 23, 45-48),

3. On December 29, 2011, the Executive Judge and the Vice

Executive Judges issued an order granting the said urgent motion.

The dispositive portion of the Order states:

“ WHEREFORE, the Urgent Motion to Consider

the Value of Subject Matter of the Complaint as Not
Capable of Pecuniary Estimation is hereby GRANTED.
Filing fee for this purpose shall be determined as one
incapable of pecuniary estimation.”

4
duplicate copy of the Order is hereto attached as Annex “D”.

Accordingly, petitioner paid the sum of P4,545.00, broken down as

follows:

SAJ-DK/FF 2,864.00
JDF-DK/FF 1.136.00
PMF 500.00
LRF 40.00
VCF 5.00

original copy of the official receipt is hereto attached as Annex “E”

while the official receipt for STF is hereto attached as Annex “F”;

4. On January 2, 2012, upon motion of the petitioner, the

Executive Judge issued a temporary restraining order for 72 hours

directing Ex-Officio Sheriff Emmanuel L. Ortega, or anyone acting

for and under his authority including defendant PBCom from

registering the certificate of sale issued in EJF No. 532-2006,

duplicate copy of which order is hereto attached as Annex “G”;

5. The complaint was subsequently raffled to Branch 11 of

the Regional Trial Court of Bulacan and the hearing of petitioner’s

application for the issuance of temporary restraining order was set

on January 4, 2012. During the said hearing, respondent PBCom

asked for time to file an opposition, which was granted by the court

a quo;

5
 6. Under date of January 5, 2012, PBCom filed its opposition

to the application for issuance of a temporary restraining order on

the alleged ground that the court a quo had not acquired

jurisdiction over the case. The reason advanced by PBCom was

that the correct docket fee was not paid, certified xerox copy of the

opposition is hereto attached as Annex “H”;

7. Petitioner filed its reply insisting that from the case of

Bunayog vs. Tunas, et. al, 106 Phil. 715 to Lapitan vs, Scandia,

Inc. September 30, 1963 to Amorganda vs. Court of Appeals, 166

SCRA 203 to Russel vs. Vestil, 304 SCRA 738 and to the recent

case of Lu vs. Lu Ym , Sr., February 15, 2011, 643 SCRA 23, the

Supreme Court was consistent in holding that an action for

annulment of real estate mortgage or any contract for that matter is

an action incapable of pecuniary estimation and thus, under Rule

141, Section 7 (b) of the Rules of Court, petitioner had fully paid

the docket fee, certified xerox copy of the reply is hereto attached

as Annex “I”.

8. On April 3, 2012, the court a quo rendered a decision,

dismissing the case for lack of jurisdiction pursuant to the case of

Home Guaranty Corporation vs. RII Builders Inc, et al, March 9,

2011, a certified copy of the Decision was earlier marked as Annex

“A”. The pertinent portion of the decision reads as follows:

6
 “Following the High Court’s ruling in the case of
Home Guaranty Corporation vs. RII Builders Inc. and
National Housing Authority, G.R. No. 192549, March 9,
2011, cited by the bank in its rejoinder, which appears
to be the latest jurisprudence on the matter to the effect
that an action for annulment or rescission of contract
does not operate to efface the true objective and nature
of the action which is to recover real property, this
Court hereby RESOLVES TO DISMISS, the instant
case for lack of jurisdiction, plaintiff having failed to pay
the appropriate filing fees.”

9. On April 30, 2012, petitioner seasonably filed a motion for

reconsideration, certified xerox copy of which is hereto attached as

Annex “J”. After respondent PBCom filed its comment/opposition,

duplicate copy of which is hereto attached as Annex “K”,

petitioner filed its reply, certified copy of the reply is hereto

attached as Annex “L”;

10. As stated earlier, on July 25, 2012, the court a quo

issued an order denying the motion for reconsideration, certified

xerox copy of which was earlier marked as Annex “B”. Petitioner

received this Order on August 3, 2012. Hence, this petition.

STATEMENT OF THE ISSUE

In dismissing the complaint for lack of jurisdiction, the court a

quo decided an issue of substance not in accordance with Section

7 (b), Rule 141of the Rules of Court as interpreted by the Supreme

7
Court En Banc in the recent case of Lu vs. Lu Ym, Sr., February

15, 2011, 643 SCRA 23 and in the cases of Bunayog vs. Tunas, et.

al, 106 Phil. 715; Lapitan vs, Scandia, Inc. September 30, 1963;

Amorganda vs Court of Appeals, 166 SCRA 203 and Russel vs.

Vestil, 304 SCRA 738.

DISCUSSION

Section 7 (b), Rule 141 of the Rules of Court provides:

“b. For filing:

From affectivity Nov. 11, 2004 to Nov. 11, 2005 to Effective Nov.
to Nov. 10, 2004 Nov. 10, 2005 Nov. 10, 2006 11, 2006

1. Actions where
the value of the
subject matter
cannot be
estimated…. P 750.00 P 1,000.00 P 1, 500.00 P 2, 000.00

The docket fee paid by the petitioner was based from this

provision of the Rules of Court. In the Order of the Executive

Judge and the Vice-Executive Judges dated December 29, 2011

(Annex “D”), they ruled that:

“WHEREFORE, the Urgent Motion to Consider

the Value of Subject Matter of the Complaint as Not
Capable of Pecuniary Estimation is hereby GRANTED.
Filing fee for this purpose shall be determined as one
incapable of pecuniary estimation.”

8
 Petitioner respectfully submits that an action for annulment of

real estate mortgage is an action incapable of pecuniary

estimation. This being the case, Section 7 (b), Rule 141 of the

Rules of Court, as quoted above, applies to the case filed by the

petitioner in the court a quo.

Decisions supporting
petitioner’s position

As early as 1959, the Supreme Court En Banc already

pronounced in the case of Bunayog vs. Tunas, et. al, December

23, 1959, 106 Phil. 715, 717, that an action questioning the validity of

a mortgage is not capable of pecuniary estimation. We quote the

Supreme Court, as follows:

“We, however, hold that the trial court erred in

dismissing the complaint on the ground of lack of
jurisdiction even if the amount sought to be recovered is
less than P2,000.00 because the issue regarding the
validity of the mortgage does not come within the original
exclusive jurisdiction of the justice of the peace court. It
being an issue which is not capable of pecuniary
estimation, the same can only be determined by the court
of first instance (Republic Act No. 296, Section 88, as
amended by Republic Act No. 646, Section 22).xxx”
(emphasis supplied)

Bunayog was followed by Lapitan vs. Scandia, Inc.,

September 30, 1963. Lapitan, in turn, was followed by Amorganda

vs. Court of Appeals, 166 SCRA 203, 212, September 30, 1988. In

9
Amorganda, the Honorable Supreme Court quoted with approval

its ruling in Lapitan vs. Scandia, Inc. Thus:

“A review of the jurisprudence of this Court indicates that

in determining whether an action is one not capable of pecuniary
estimation, this Court has adopted the criterion of first
ascertaining the nature of the principal action or remedy sought.
If it is primarily for the recovery of a sum of money, the claim is
considered capable of pecuniary estimation, and whether
jurisdiction is in the municipal courts or in the courts of first
instance would depend on the amount of the claim. However,
where the basic issue is something other than the right to
recover a sum of money, or where the money claim is purely
incidental to, or a consequence of, the principal relief sought like
in the suits to have the defendant perform his part of the
contract (specific performance) and in actions for support, or for
annulment of a judgment or to foreclose a mortgage, this
Court has considered such actions as cases where the
subject of the litigation may not be estimated in terms of
money, and are cognizable exclusively by courts of first
instance. xxx. (bold facing and underlining ours for emphasis)

After Amorganda, came Russel vs. Vestil, 304 SCRA

738,745, March 17, 1999. In this case, the Supreme Court ruled

that actions questioning the validity of a mortgage is an action

incapable of pecuniary estimation. We quote the Supreme

Court, as follows:

“Examples of actions incapable of pecuniary estimation

are those for specific performance, support, or foreclosure of
mortgage or annulment of judgment; also actions questioning
the validity of a mortgage, annulling a deed of sale or
conveyance and to recover the price paid and for rescission,
which is a counterpart of specific performance. xxx “ (bold facing
and underlining ours for emphasis)

Finally, in the recent case of Lu vs, Lu Ym , Sr. February 15,

2011, 643 SCRA 23,45-48, the Supreme Court EN BANC held

that an action for declaration of nullity of share issuance or

10
action questioning the legality of a conveyance is one not

capable of pecuniary estimation. We quote the Supreme Court,

as follows:

“The complaint filed by David, et al. is one for declaration of

nullity of share issuance.  The main relief prayed for both in
the original complaint and the amended complaint is the same,
that is, to declare null and void the issuance of 600,000
unsubscribed and unissued shares to Lu Ym father and sons, et
al. x x x

As judiciously discussed in the Court's August 26, 2008

Decision, the test in determining whether the subject matter of an
action is incapable of pecuniary estimation is by ascertaining the
nature of the principal action or remedy sought.  It explained:

x x x To be sure, the annulment of the shares, the

dissolution of the corporation and the appointment of
receivers/management committee are actions which do
not consist in the recovery of a sum of money. If, in the
end, a sum of money or real property would be recovered,
it would simply be the consequence of such principal
action.  Therefore, the case before the RTC was incapable
of pecuniary estimation. (italics in the original, emphasis
and underscoring supplied)

Actions which the Court has recognized as being incapable of

pecuniary estimation include legality of conveyances.  In a
case involving annulment of contract, the Court found it to be
one which cannot be estimated:

xxx xxx xxx

IN FINE, the Court holds that David Lu, et al.'s complaint is one
incapable of pecuniary estimation, hence, the correct docket
fees were paid. xxx” (bold facing and underlining ours for
emphasis)

Ruling in R II Builders
is not binding

The ruling of the First Division of this Honorable Court in

Home Guaranty Corporation vs. R II Builders, Inc, et al, March 9,

2011, which is the basis of the decision of the court a quo is not

11
controlling, we so respectfully submit. This is because the ruling of

the First Division cannot modify or reverse a doctrine or principle of

law laid down by the Supreme Court En Banc. Our constitution is

clear on this point:

“Provided, that no doctrine or principle of law laid

down by the Court in a decision En Banc or in division
may be modified or reversed except by the Court sitting
En Banc” (Article VIII, Section 4 (3) last sentence of the 1987
Constitution) (underscoring supplied)

The Supreme Court En Banc laid down a doctrine in Lu vs.

Lu Ym, Sr., February 15, 2011, 643 SCRA 23 that an action for

declaration of nullity of issuance of shares or an action

questioning the legality of a conveyance is one not capable of

pecuniary estimation and thus the filing fee should be based

on Section 7 (b), Rule 141 of the Rules of Court.

More than five decades ago, the Supreme Court En Banc in

the case Bunayog vs. Tunas, December 23, 1959, 106 Phil. 715,

717, already laid down the doctrine that a complaint questioning

the validity of the mortgage is an issue which is not capable of

pecuniary estimation,

12
 As stated earlier, HGC vs. R II Builders, Inc, et al, March 9,

2011, which is the basis of the court a quo’s decision was rendered

by the First Division of this Honorable Court.

No less than the Honorable Supreme Court En Banc had

made it clear that a decision of a division of the Supreme Court that

runs counter to a decision/doctrine laid down by the Supreme

Court En Banc is unconstitutional and invalid.

In Lu vs. Lu Ym, Sr., 643 SCRA 23, 41, February 15, 2011,

the Supreme Court En Banc ruled:

“Since the present cases may involve a modification

or reversal of a Court-ordained doctrine or principle, the
judgment rendered by the Special Third Division may
be considered unconstitutional, hence, it can never
become final.  It finds mooring in the deliberations of the
framers of the Constitution: 
 
On proposed Section 3(4), Commissioner
Natividad asked what the effect would be of a decision
that violates the proviso that “no doctrine or principle of
law laid down by the court in a decision rendered en
banc or in division may be modified or reversed except
by the court en banc.”  The answer given was
that such a decision would be invalid.  Following up,
Father Bernas asked whether the decision, if not
challenged, could become final and binding at least on
the parties.  Romulo answered that, since such a
decision would be in excess of jurisdiction, the
decision on the case could be reopened anytime”     

A decision rendered by a Division of this Court in

violation of this constitutional provision would be in
excess of jurisdiction and, therefore, invalid. x x x “
     
 
 

13
 Earlier, in Manotok et al vs. Heirs of Barque, December 18,

2008, 574 SCRA 468, 491-492, an entry of judgment had already

been made in favor of the Barques. Yet, the Supreme Court En

Banc reopened the case since the decision of the First Division of

the Supreme Court had not attained finality because it was

rendered in contravention of the constitution. We quote the

Supreme Court:

“ x x x Most urgently, the Court had felt that the previous

rulings by the First Division and the Special First Division
warranted either affirmation or modification by the Court
acting en banc.
 
It is a constitutional principle that “no doctrine or
principle of law laid down by the [C]ourt in a decision
rendered en banc or in division may be modified or
reversed except by the court sitting en banc.” It has been
argued that the 2005 Decision of the First Division is
inconsistent with precedents of the Court, and leaving that
decision alone without the imprimatur of the Court en
banc would lead to undue confusion within the bar and
bench, with lawyers, academics and judges quibbling over
whether the earlier ruling of the Division constitutes the
current standard with respect to administrative
reconstitution of titles. Our land registration system is too
vital to be stymied by such esoteric wrangling, and the
administrators and courts which implement that system do
not deserve needless hassle.” (please refer to pages 491 &
492 of 574 SCRA)

Much earlier, in Republic vs. Garcia et al, July 12, 2007, 527

SCRA 495, 502-503, the Supreme Court (First Division) held:

“On this, Article VIII, Section 4(3) of the Constitution

provides:

(3) Cases or matters heard by a division shall be

decided or resolved with the concurrence of majority of
the Members who actually took part in the
deliberations on the issues in the case and voted
thereon, and in no case without the concurrence of at

14
 least three of such Members. When the required
number is not obtained, the case shall be decided en
banc; Provided, that no doctrine or principle of law
laid down by the court in a decision rendered en
banc or in division may be modified or reversed
except by the court sitting en banc. (emphasis
supplied)

The Constitution mandates that only this Court sitting

En Banc may modify or reverse a doctrine or principle of
law laid down by the Court in a decision rendered en banc
or in division. Any court, the Sandiganbayan included,
which renders a decision in violation of this constitutional
precept exceeds its jurisdiction.” (Please refer to pages 502 &
503 of volume 527 SCRA)

PRAYER

WHEREFORE, it is respectfully prayed of this Honorable

Court that the decision of the Regional Trial Court Branch 11,

Malolos, Bulacan dated April 3, 2012 and its Order dated July 25,

2012 in Civil Case No. 04-M-2012 be reversed.

Quezon City for Manila, August 15, 2012.

DABU & ASSOCIATES

Counsel for the Petitioner
Suites A20 & 22, 3/F Francesca Tower
EDSA corner Scout Borromeo, Quezon City
E mail add: dabulaw@dabulaw.bayandsl.ph
Tel Nos. 4157823;4148929;4165866

By:
PEDRO T. DABU, JR.
Roll No. 32474; Page 485; Book XIII
IBP No. 883931; 01/12/12; Pampanga
PTR No. 6074987; 1/06/12; Q.C.
MCLE Exemption No. IV-000114; 5/16/12

15
 VERIFICATION AND
CERTIFICATION ON NON FORUM SHOPPING

I, MARIO M. SARMIENTO, resident of Quezon City, after

having been duly sworn to in accordance with law, hereby depose
and state, that:

I am the President of First Sarmiento Property Holdings, Inc.

and I represent the petitioner in the above-entitled case pursuant to
the authority granted me by the Board of Directors as contained in
Annex M of the petition.

I caused the preparation of the foregoing petition; I read the

allegations contained therein and the factual allegations are true
and correct of my own knowledge or based on authentic
documents;

I hereby certify that we have not commenced any other

action involving the same issue/s in the Supreme Court, the Court
of Appeals or different divisions thereof, or any other tribunal or
agency and should I learn thereafter of any such action, I
undertake to inform this Honorable Court of the same within five (5)
days from knowledge thereof.

In Witness Whereof, I have hereunto affixed my signature,

this _____ day of August 2012 at Quezon City.

MARIO M. SARMIENTO
Affiant

SUBSCRIBED AND SWORN TO BEFORE ME, this ___day

of August 2012 by affiant who is personally known to me.

Doc. No. ____;

Page No. ____;
Book No. ____;
Series of 2012.

16
Copy Furnished by personal service:

Alba Ibarra Segundera Agustin

& Rodriguez-Lastimosa
Counsel for PBCOM
6th Floor PBCOM Tower
6795 Ayala Avenue cor. V.A. Rufino Street
Makati City

The Regional Trial Court

Branch 11
City of Malolos, Bulacan

17