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BILOG VS AW-AQ
April 24, 2017 | G.R. No. 189950

FACTS:

Respondents Estela Ay-Ay etal filed a complaint for Quieting of Title against petitioners
Bernadette S. Bilag etal before the RTC. Respondents alleged that Iloc Bilag, petitioners'
predecessor-in-interest, sold to them separately various portions of a 159,496-square
meter parcel of land designated by the Bureau of Lands situated in Baguio City.
Respondents further alleged that they have been in continuous possession of the said
lands since 1976 when they were delivered to them and that they have already
introduced various improvements thereon.

Petitioners refused to honor the foregoing sales by asserting their adverse rights on the
subject lands. Petitioners filed a Motion to Dismiss dated November 4, 2004 on the
grounds of lack of jurisdiction, prescription/laches/estoppel, and res judicata.
Petitioners averred that the subject lands are untitled, unregistered, and form part of
the Baguio Townsite Reservation which were long classified as lands of the public
domain. As such, the RTC has no jurisdiction over the case as it is the Land
Management Bureau (formerly the Bureau of Lands) which is vested with the authority
to determine issues of ownership over unregistered public lands.

ISSUE: Whether or not the dismissal of the CA is proper

HELD:

NO. Presidential Decree No. (PD) 1271 expressly declared that all orders and decisions
in connection with the proceedings for the reopening of Civil Reservation Case
covering lands within the Baguio Townsite Reservation are null and void and without
force and effect. Hence it is the BLR who has jurisdiction over the case and not the RTC.

The records reveal that the subject lands are unregistered and untitled and it is only
reasonable to conclude that the subject lands should be properly classified as lands of
the public domain as well. Since the subject lands are untitled and unregistered public
lands, then petitioners correctly argued that it is the Director of Lands who has the
authority to award their ownership.

Having established that the disputed property is public land, the trial court was
therefore correct in dismissing the complaint to quiet title for lack of jurisdiction. The trial
court had no jurisdiction to determine who among the parties have better right over
the disputed property which is admittedly still part of the public domain

It should be stressed that the court a quo's lack of subject matter jurisdiction over the
case renders it without authority and necessarily obviates the resolution of the merits of
the case. To reiterate, when a court has no jurisdiction over the subject matter, the only
power it has is to dismiss the action,
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DEE VS HARVEST ALL INVESTMENT LIMITED

March 15, 2017 | G.R. No. 224834

FACTS:

Harvest All, et al. are minority stockholders of Alliance Select Foods International, Inc.
(Alliance). As per Alliance's by-laws, its Annual Stockholders' Meeting (ASM) is held every
June 15. In a Special Board of Directors Meeting held on May 29, 2015, the Board of
Directors passed a Board Resolution indefinitely postponing Alliance's 2015 ASM
pending complete subscription to its Stock Rights Offering (SRO) consisting of shares
with total value of Pl Billion. This prompted Harvest All, et al. to file the instant Complaint
involving an intra-corporate controversy against Alliance.

Harvest All, et al. principally claimed that the subscription to the new shares through the
SRO cannot be made a condition precedent to the exercise by the current
stockholders of their right to vote in the 2015 ASM. The Clerk of Court of the RTC
assessed Harvest All, et al. with filing fees amounting to P8,860.00 which they paid
accordingly.

The Alliance Board raised the issue of lack of jurisdiction on the ground of Harvest All, et
al.' s failure to pay the correct filing fees. It argued that the latter should have paid P20
Million, more or less, in filing fees based on the SRO which was valued at P1 Billion.

Harvest All, et al. maintained that they paid the correct filing fees, considering that the
subject of their complaint is the holding of the 2015 ASM and not a claim on the
aforesaid value of the SRO. Harvest All, et al. likewise pointed out that they simply relied
on the assessment of the Clerk of Court and had no intention to defraud the
government.

RTC dismissed the instant complaint for lack of jurisdiction due to Harvest All, et al.'s
failure to pay the correct filing fees Citing Rule 141 of the Rules of Court and the Court's
pronouncement in Lu v. Lu Ym, Sr. (Lu) stating that "an intra-corporate controversy
always involves a property in litigation" and that "there can be no case of intra-
corporate controversy where the value of the subject matter cannot be estimated"

CA reversed the RTC's order of dismissal CA held that Harvest All, et al. were not in bad
faith and had no intention of defrauding the government, as they merely relied in the
assessment of the Clerk of Court.

ISSUES:

(1) Whether or not the filing fee for Harvest should be based on the P1 Billion Value of
the SRO for it is an action pecuniary of estimation according to the case of LU

(2) Whether or not the passages in the case of Lu that "an intra-corporate controversy
always involves a property in litigation" and that "there can be no case of intra-
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corporate controversy where the value of the subject matter cannot be

estimated” are correct

HELD:

(1) NO. The pronouncement in the case of Lu is in the nature of an obiter dictum as it is
evident, these passages in Lu only constitute an opinion delivered by the Court.

An Obiter Dictum is a remark made, or opinion expressed, by a judge, in his decision

upon a cause by the way, that is, incidentally or collaterally, and not directly upon the
question before him, or upon a point not necessarily involved in the determination of
the cause, or introduced by way of illustration, or analogy or argument. It does not
embody the resolution or determination of the court, and is made without argument, or
full consideration of the point. It lacks the force of an adjudication, being a mere
expression of an opinion with no binding force for purposes of res judicata

(2) No. This is because depending on the nature of the principal action or remedy
sought, an intra-corporate controversy may involve a subject matter which is either
capable or incapable of pecuniary estimation.

In Cabrera v. Francisco, the Court laid down the parameters in determining whether an
action is considered capable of pecuniary estimation or not. In determining whether an
action is one the subject matter of which is not capable of pecuniary estimation this
Court has adopted the criterion of first ascertaining the nature of the principal action or
remedy sought where the basic issue is something other than the right to recover a sum
of money, where the money claim is purely incidental to, or a consequence of, the
principal relief sought, 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 Regional Trial Court.

A cursory perusal of Harvest All, et al.'s Complaint and Amended Complaint reveals
that its main purpose is to have Alliance hold its 2015 ASM on the date set in the
corporation's by laws. Certainly, Harvest All, et al.'s prayer for nullity, as well as the
concomitant relief of holding the 2015 ASM as scheduled in the by-laws, do not involve
the recovery of sum of money.

Also, the Court passed A.M. No. 04-02-04-SC dated October 5, 2016, which introduced
amendments to the schedule of legal fees to be collected in various commercial
cases, including those involving intra-corporate controversies stating

“Section 21 (k) of Rule 141 of the Revised Rules of Court is hereby DELETED as the fees
covering petitions for insolvency are already provided for in this Resolution. As for cases
involving intra corporate controversies, the applicable fees shall be those provided
under Section 7 (a), 7 (b) (1), or 7 (b) (3) of Rule 141 of the Revised Rules of Court
depending on the nature of the action.”
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The amendments concretize the Court's recognition that the subject matter of an intra-
corporate controversy may or may not be capable of pecuniary estimation. The case
was therefore remanded to the RTC.

KT CONSTRUCTION SUPPLY, INC., REPRESENTED BY WILLIAM GO, PETITIONER, VS.

PHILIPPINE SAVINGS BANK, RESPONDENT.
May 21, 2017 | G.R. No. 228435

FACTS:

KT Construction Supply, Inc. (KT Construction) obtained a loan from respondent

Philippine Savings Bank (PSBank) in the amount of P2.5 million. The said loan was
evidenced by a Promissory Note executed on the same date. The said note was signed
by William K. Go (Go) and Nancy Go-Tan (Go-Tan) as Vice-President/General Manager
and Secretary/Treasurer of KT Construction, respectively. In addition, both Go and Go-
Tan signed the note in their personal capacities.

The promissory note stipulated that the loan was payable within a period of sixty (60)
months. In addition, the said note provided for the payment of attorney's fees in case of
litigation.

PSBank sent a demand letter to KT Construction asking the latter to pay its outstanding
obligation in the amount of P725,438.81, excluding interest, penalties, legal fees, and
other charges. For its failure to pay despite demand, PSBank filed a complaint for sum
of money against KT Construction.

The RTC ruled in favor of PSBank. It opined that the promissory note expressly declared
that the entire obligation shall immediately become due and payable upon default in
payment of any installment.

KT Construction appealed before the CA. KT Construction moved for reconsideration,

but its motion was denied by the CA.

KT Construction insists that Go and Go-Tan could not be held solidarily liable for the
judgment award because they were neither impleaded nor served with summons.
Moreover, they did not voluntarily appear before the court. Thus, the courts never
acquired jurisdiction over their persons.

KT Construction further asserts that the complaint was premature because it was not
alleged that it had defaulted in paying any of the installments due and that it had
received a demand letter from PSBank.

ISSUES:

(1) Whether or nor Go and Go-Tan could be solidarity liable for the judgment award
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(2) Whether or not the complaint was premature

(3) Whether or not the lower court erred in awarding attorney’s fees in favor of the
respondent bank

HELD:

(1) No, Go and Go-Tan were neither impleaded in the civil case nor served with
summons. They merely acted as representatives of KT Construction, which was
impleaded as the defendant in the complaint. It is for this reason that only KT
Construction filed an answer to the complaint. Thus, it is clear that the trial court
never acquired jurisdiction over Go and Go-Tan.

it is elementary that a judgment of a court is conclusive and binding only upon the
parties and their successors-in-interest after the commencement of the action in court.
A decision rendered on a complaint in a civil action or proceeding does not bind or
prejudice a person not impleaded therein, for no person shall be adversely affected by
the outcome of a civil action or proceeding in which he is not a party. The principle
that a person cannot be prejudiced by a ruling rendered in an action or proceeding in
which he has not been made a party conforms to the constitutional guarantee of due
process of law.

In short, jurisdiction over the person of the parties must be acquired so that the decision
of the court would be binding upon them. It is a fundamental rule that jurisdiction over
a defendant is acquired in a civil case either through service of summons or voluntary
appearance in court and submission to its authority.

(2) NO. an acceleration clause is valid and produces legal effects. In the case at
bench, the promissory note explicitly stated that default in any of the installments
shall make the entire obligation due and demandable even without notice or
demand. Thus, KT Construction was erroneous in saying that PSBank's complaint
was premature on the ground that the loan was due only on October 12, 2011. KT
Construction's entire loan obligation became due and demandable when it failed
to pay an installment pursuant to the acceleration clause.

(3) NO. The promissory note, however, categorically provided for the payment of
attorney's fees in case of default. The said stipulation constituted a penal clause to
which the parties were bound, it being part of the contract between the parties.KT
Construction was mistaken in relying on Article 2208 of the Civil Code because the
same applies only when there is no stipulation as to the payment of attorney's fees
in case of default.
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