Spouses Veloso v. Banco De Oro Unibank, Inc.

 

Spouses Veloso v. Banco De Oro Unibank, Inc.

G.R. No. 256924

June 14, 2023

 

FACTS:

                On June 25, 2010, petitioner-spouses executed a Mortgage Loan Agreement in favor of respondent BDO to secure the payment of a P5,184,900.00 real estate loan obtained with the bank; and they constituted a real estate mortgage over their real properties. After petitioner-spouses defaulted on their obligations, respondent BDO filed before the RTC of Quezon City a petition for extrajudicial foreclosure of mortgage. Petitioner-spouses filed the instant Complaint against respondent BDO for "Declaration of Nullity of Real Estate Mortgage, Extrajudicial Foreclosure of Real Estate Mortgage, Certificate of Sale, Registration of Certificate of Sale, and All Related Entries." They asserted that the stipulations in the parties' mortgage agreement are null and void for being unconscionable and illegal; hence, the extrajudicial foreclosure and all proceedings subsequently made pursuant thereto are likewise a nullity and produce no legal effect whatsoever. BDO filed a Motion to Dismiss on the ground that the RTC had no jurisdiction over the case because the complaint involves title to or possession of real property or interest therein; being a real action, the jurisdiction of the court is determined by the assessed value of the property which petitioner[1]spouses failed to allege in their complaint. In their Opposition to the motion, petitioner-spouses argued that their complaint partakes of the nature of a personal action being based on privity of contract; the primary relief sought is the nullification of their mortgage contract with respondent BDO and not the recovery of possession of the mortgaged properties because they are still in possession thereof.

 

ISSUE:

                Whether or not the RTC acquired jurisdiction over the subject matter of the action.

 

HELD:

                No. BP 129, as amended by RA 7691, provides: Sec. 19. Jurisdiction in civil cases. — Regional Trial Courts shall exercise exclusive original jurisdiction. (1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; (2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or, for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;

Petitioner-spouses contend that their complaint for the annulment of their real estate mortgage contract with respondent BDO has a subject incapable of pecuniary estimation because it was not intended to recover ownership and/or possession of the mortgaged properties sold to respondent BDO during the auction sale. Respondent BDO counters that, as evident from the complaint, the primary purpose of the causes of action of petitioner-spouses involves title to or possession of real property; and that the complaint seeks to allow petitioner-spouses to exercise their right to redeem the mortgaged properties and maintain their peaceful and undisturbed possession of the same, among others. The Court agrees with respondent BDO. From the petitoners’ allegations, it becomes apparent that while petitioner-spouses assert that their complaint does not directly seek the recovery of title or possession of the mortgaged properties, the relief sought is closely intertwined with the issue of the ownership of the mortgaged properties, the recovery of which is petitioner-spouses' primary objective. In real actions, the assessed value of the realty as alleged in the complaint determines the trial court's jurisdiction Petitioner-spouses do not dispute their failure to allege the assessed value of the mortgaged properties in their complaint. Consequently, for failure of petitioner-spouses to reflect the assessed value of the mortgage properties in the complaint, or in the annexes thereto, the dismissal of the instant case is in order.