J.A.B. Bulao & Associates

CASE NO. 2011-0041: RENATO REAL VS. SANGU PHILIPPINES, INC. AND/ OR KIICHI ABE (G.R. NO.  168757, 19 JANUARY 2011,  DEL CASTILLO, J.) SUBJECT WHETHER A COMPLAINT FOR ILLEGAL DISMISSAL IS AN INTRA-CORPORATE CONTROVERSY. (BRIEF TITLE: REAL VS. SANGU PHILIPPINES ET AL.)

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D E C I S I O N

DEL CASTILLO, J.:

            The perennial question of whether a complaint for illegal dismissal is intra-corporate and thus beyond the jurisdiction of the Labor Arbiter is the core issue up for consideration in this case.

            This Petition for Review on Certiorari assails the Decision^[1][1] dated June 28, 2005 of the Court of Appeals (CA) in CA-G.R. SP. No. 86017 which dismissed the petition for certiorari filed before it.

Factual Antecedents

            Petitioner Renato Real was the Manager of respondent corporation Sangu Philippines, Inc., a corporation engaged in the business of providing manpower for general services, like janitors, janitresses and other maintenance personnel, to various clients.  In 2001, petitioner, together with 29 others who were either janitors, janitresses, leadmen and maintenance men, all employed by respondent corporation, filed their respective Complaints^[2][2] for illegal dismissal against the latter and respondent Kiichi Abe, the corporation’s Vice-President and General Manager.  These complaints were later on consolidated.

            With regard to petitioner, he was removed from his position as Manager through Board Resolution 2001-03^[3][3] adopted by respondent corporation’s Board of Directors.  Petitioner complained that he was neither notified of the Board Meeting during which said board resolution was passed nor formally charged with any infraction.  He just received from respondents a letter^[4][4] dated March 26, 2001 stating that he has been terminated from service effective March 25, 2001 for the following reasons: (1) continuous absences at his post at Ogino Philippines Inc. for several months which was detrimental to the corporation’s operation; (2) loss of trust and confidence; and, (3) to cut down operational expenses to reduce further losses being experienced by respondent corporation.

            Respondents, on the other hand, refuted petitioner’s claim of illegal dismissal by alleging that after petitioner was appointed Manager, he committed gross acts of misconduct detrimental to the company since 2000.  According to them, petitioner would almost always absent himself from work without informing the corporation of his whereabouts and that he would come to the office only to collect his salaries.  As he was almost always absent, petitioner neglected to supervise the employees resulting in complaints from various clients about employees’ performance.  In one instance, petitioner together with a few others, while apparently drunk, went to the premises of one of respondents’ clients, Epson Precision (Phils.) Inc., and engaged in a heated argument with the employees therein.  Because of this, respondent Abe allegedly received a complaint from Epson’s Personnel Manager concerning petitioner’s conduct.  Respondents likewise averred that petitioner established a company engaged in the same business as respondent corporation’s and even submitted proposals for janitorial services to two of the latter’s clients.  Because of all these, the Board of Directors of respondent corporation met on March 24, 2001 and adopted Board Resolution No. 2001-03 removing petitioner as Manager.  Petitioner was thereafter informed of his removal through a letter dated March 26, 2001 which he, however, refused to receive.

            Further, in what respondents believed to be an act of retaliation, petitioner allegedly encouraged the employees who had been placed in the manpower pool to file a complaint for illegal dismissal against respondents.  Worse, he later incited those assigned in Epson Precision (Phils.) Inc., Ogino Philippines Corporation, Hitachi Cable Philippines Inc. and Philippine TRC Inc. to stage a strike on April 10 to 16, 2001.  Not satisfied, petitioner together with other employees also barricaded the premises of respondent corporation.  Such acts respondents posited constitute just cause for petitioner’s dismissal and that same was validly effected.

Rulings of the Labor Arbiter and the National Labor Relations Commission

            The Labor Arbiter in a Decision^[5][5] dated June 5, 2003 declared petitioner and his co-complainants as having been illegally dismissed and ordered respondents to reinstate complainants to their former positions without loss of seniority rights and other privileges and to pay their full backwages from the time of their dismissal until actually reinstated and furthermore, to pay them attorney’s fees.  The Labor Arbiter found no convincing proof of the causes for which petitioner was terminated and noted that there was complete absence of due process in the manner of his termination.

            Respondents thus appealed to the National Labor Relations Commission (NLRC) and raised therein as one of the issues the lack of jurisdiction of the Labor Arbiter over petitioner’s complaint.  Respondents claimed that petitioner is both a stockholder and a corporate officer of respondent corporation, hence, his action against respondents is an intra-corporate controversy over which the Labor Arbiter has no jurisdiction.  

The NLRC found such contention of respondents to be meritorious.  Aside from petitioner’s own admission in the pleadings that he is a stockholder and at the same time occupying a managerial position, the NLRC also gave weight to the corporation’s General Information Sheet^[6][6] (GIS) dated October 27, 1999 listing petitioner as one of its stockholders, consequently his termination had to be effected through a board resolution.  These, the NLRC opined, clearly established petitioner’s status as a stockholder and as a corporate officer and hence, his action against respondent corporation is an intra-corporate controversy over which the Labor Arbiter has no jurisdiction.  As to the other complainants, the NLRC ruled that there was no dismissal.  The NLRC however, modified the appealed decision of the Labor Arbiter in a Decision^[7][7] dated February 13, 2004, the dispositive portion of which reads:

            WHEREFORE, all foregoing premises considered, the appealed Decision dated June 5, 2003 is hereby MODIFIED.  Accordingly, judgment is hereby rendered DISMISSING the complaint of Renato Real for lack of jurisdiction.  As to the rest of the complainants, they are hereby ordered to immediately report back to work but without the payment of backwages.

All other claims against respondents including attorney’s fees are DISMISSED for lack of merit.

SO ORDERED.

            Still joined by his co-complainants, petitioner brought the case to the CA by way of petition for certiorari.

Ruling of the Court of Appeals

                Before the CA, petitioner imputed upon the NLRC grave abuse of discretion amounting to lack or excess of jurisdiction in declaring him a corporate officer and in holding that his action against respondents is an intra-corporate controversy and thus beyond the jurisdiction of the Labor Arbiter.

            While admitting that he is indeed a stockholder of respondent corporation, petitioner nevertheless disputed the declaration of the NLRC that he is a corporate officer thereof.  He posited that his being a stockholder and his being a managerial employee do not ipso facto confer upon him the status of a corporate officer.  To support this contention, petitioner called the CA’s attention to the same GIS relied upon by the NLRC when it declared him to be a corporate officer.  He pointed out that although said information sheet clearly indicates that he is a stockholder of respondent corporation, he is not an officer thereof as shown by the entry “N/A” or “not applicable” opposite his name in the officer column.  Said column requires that the particular position be indicated if the person is an officer and if not, the entry “N/A”.  Petitioner further argued that the fact that his dismissal was effected through a board resolution does not likewise mean that he is a corporate officer.  Otherwise, all that an employer has to do in order to avoid compliance with the requisites of a valid dismissal under the Labor Code is to dismiss a managerial employee through a board resolution.  Moreover, he insisted that his action for illegal dismissal is not an intra-corporate controversy as same stemmed from employee-employer relationship which is well within the jurisdiction of the Labor Arbiter.  This can be deduced and is bolstered by the last paragraph of the termination letter sent to him by respondents stating that he is entitled to benefits under the Labor Code, to wit:

            In this connection (his dismissal) you are entitled to separation pay and other benefits provided for under the Labor Code of the Philippines.^[8][8] (Emphasis supplied)

In contrast, respondents stood firm that the action against them is an intra-corporate controversy.  It cited Tabang v. National Labor Relations Commission^[9][9] wherein this Court declared that “an intra-corporate controversy is one which arises between a stockholder and the corporation;” that “[t]here is no distinction, qualification, nor any exemption whatsoever;” and that it is “broad and covers all kinds of controversies between stockholders and corporations.”  In view of this ruling and since petitioner is undisputedly a stockholder of the corporation, respondents contended that the action instituted by petitioner against them is an intra-corporate controversy cognizable only by the appropriate regional trial court.  Hence, the NLRC correctly dismissed petitioner’s complaint for lack of jurisdiction.

            In the assailed Decision^[10][10] dated June 28, 2005, the CA sided with respondents and affirmed the NLRC’s finding that aside from being a stockholder of respondent corporation, petitioner is also a corporate officer thereof and consequently, his complaint is an intra-corporate controversy over which the labor arbiter has no jurisdiction.  Said court opined that if it was true that petitioner is a mere employee, the respondent corporation would not have called a board meeting to pass a resolution for petitioner’s dismissal considering that it was very tedious for the Board of Directors to convene and to adopt a resolution every time they decide to dismiss their managerial employees.  To support its finding, the CA likewise cited Tabang.  As to petitioner’s co-complainants,  the CA likewise affirmed the NLRC’S finding that they were never dismissed from the service.  The dispositive portion of the CA Decision reads:

WHEREFORE, the instant petition is hereby DISMISSED.  Accordingly, the assailed decision and resolution of the public respondent National Labor Relations Commission in NLRC NCR CA No. 036128-03 NLRC SRAB-IV-05-6618-01-B/05-6619-02-B/05-6620-02-B/10-6637-01-B/10-6833-01-B, STANDS.

SO ORDERED.

            Now alone but still undeterred, petitioner elevated the case to us through this Petition for Review on Certiorari.

The Parties’ Arguments

            Petitioner continues to insist that he is not a corporate officer.  He argues that a corporate officer is one who holds an elective position as provided in the Articles of Incorporation or one who is appointed to such other positions by the Board of Directors as specifically authorized by its By-Laws.  And, since he was neither elected nor is there any showing that he was appointed by the Board of Directors to his position as Manager, petitioner maintains that he is not a corporate officer contrary to the findings of the NLRC and the CA. 

Petitioner likewise contends that his complaint for illegal dismissal against respondents is not an intra-corporate controversy.  He avers that for an action or suit between a stockholder and a corporation to be considered an intra-corporate controversy, same must arise from intra-corporate relations, i.e., an action involving the status of a stockholder as such.  He believes that his action against the respondents does not arise from intra-corporate relations but rather from employer-employee relations.  This, according to him, was even impliedly recognized by respondents as shown by the earlier quoted portion of the termination letter they sent to him.

            For their part, respondents posit that what petitioner is essentially assailing before this Court is the finding of the NLRC and the CA that he is a corporate officer of respondent corporation.  To the respondents, the question of whether petitioner is a corporate officer is a question of fact which, as held in a long line of jurisprudence, cannot be the subject of review under this Petition for Review on Certiorari.  At any rate, respondents insist that petitioner who is undisputedly a stockholder of respondent corporation is likewise a corporate officer and that his action against them is an intra-corporate dispute beyond the jurisdiction of the labor tribunals.  To support this, they cited several jurisprudence such as Pearson & George (S.E. Asia), Inc. v. National Labor Relations Commission,^[11][11] Philippine School of Business Administration v. Leano,^[12][12] Fortune Cement Corporation v. National Labor Relations Commission^[13][13] and again, Tabang v. National Labor Relations Commission.^[14][14]

  Moreover, in an attempt to demolish petitioner’s claim that the present controversy concerns employer-employee relations, respondents enumerated the following facts and circumstances: (1) Petitioner was an incorporator, stockholder and manager of respondent company; (2) As an incorporator, he was one of only seven incorporators of respondent corporation and one of only four Filipino members of the Board of Directors; (3) As stockholder, he has One Thousand (1,000) of the Ten Thousand Eight Hundred (10,800) common shares held by Filipino stockholders, with a par-value of One Hundred Thousand Pesos (P100,000.00); (4) His appointment  as manager was by virtue of Section 1, Article IV of respondent corporation’s By-Laws; (5) As manager, he had direct management and authority over all of respondent corporation’s skilled employees; (6) Petitioner has shown himself to be an incompetent manager, unable to properly supervise the employees and even causing friction with the corporation’s clients by engaging in unruly behavior while in client’s premises; (7) As if his incompetence was not enough, in a blatant and palpable act of disloyalty, he established another company engaged in the same line of business as respondent corporation; (8) Because of these acts of incompetence and disloyalty, respondent corporation through a Resolution adopted by its Board of Directors was finally constrained to remove petitioner as Manager and declare his office vacant; (9) After his removal, petitioner urged the employees under him to stage an unlawful strike by leading them to believe that they have been illegally dismissed from employment.^[15][15]  Apparently, respondents intended to show from this enumeration that petitioner’s removal pertains to his relationship with respondent corporation, that is, his utter failure to advance its interest and the prejudice caused by his acts of disloyalty.  For this reason, respondents see the action against them not as a case between an employer and an employee as what petitioner alleges, but one by an officer and at same time a major stockholder seeking to be reinstated to his former office against the corporation that declared his position vacant. 

Finally, respondents state that the fact that petitioner is being given benefits under the Labor Code as stated in his termination letter does not mean that they are recognizing the employer-employee relations between them.  They explain that the benefits provided under the Labor Code were merely made by respondent corporation as the basis in determining petitioner’s compensation package and that same are merely part of the perquisites of petitioner’s office as a director and manager.  It does not and it cannot change the intra-corporate nature of the controversy.  Hence, respondents pray that this petition be dismissed for lack of merit.

Issues

From the foregoing and as earlier mentioned, the core issue to be resolved in this case is whether petitioner’s complaint for illegal dismissal constitutes an intra-corporate controversy and thus, beyond the jurisdiction of the Labor Arbiter.

Our Ruling

Two-tier test in determining the existence of intra-corporate controversy

                Respondents strongly rely on this Court’s pronouncement in the 1997 case of Tabang v. National Labor Relations Commission, to wit:

[A]n intra-corporate controversy is one which arises between a stockholder and the corporation.  There is no distinction, qualification nor any exemption whatsoever. The provision is broad and covers all kinds of controversies between stockholders and corporations.^[16][16]

                In view of this, respondents contend that even if petitioner challenges his being a corporate officer, the present case still constitutes an intra-corporate controversy as petitioner is undisputedly a stockholder and a director of respondent corporation.

            It is worthy to note, however, that before the promulgation of the Tabang case, the Court provided in Mainland Construction Co., Inc. v. Movilla^[17][17] a “better policy” in determining which between the Securities and Exchange Commission (SEC) and the Labor Arbiter has jurisdiction over termination disputes,^[18][18] or similarly, whether they are intra-corporate or not, viz:

The fact that the parties involved in the controversy are all stockholders or that the parties involved are the stockholders and the corporation does not necessarily place the dispute within the ambit of the jurisdiction of the SEC (now the Regional Trial Court^[19][19]).  The better policy to be followed in determining jurisdiction over a case should be to consider concurrent factors such as the status or relationship of the parties or the nature of the question that is subject of their controversy.  In the absence of any one of these factors, the SEC will not have jurisdiction.  Furthermore, it does not necessarily follow that every conflict between the corporation and its stockholders would involve such corporate matters as only SEC (now the Regional Trial Court^[20][20]) can resolve in the exercise of its adjudicatory or quasi-judicial powers.  (Emphasis ours)

            And, while Tabang was promulgated later than Mainland Construction Co., Inc., the “better policy” enunciated in the latter appears to have developed into a standard approach in classifying what constitutes an intra-corporate controversy.  This is explained lengthily in Reyes v. Regional Trial Court of Makati, Br. 142,^[21][21] to wit:

Intra-Corporate Controversy

            A review of relevant jurisprudence shows a development in the Court’s approach in classifying what constitutes an intra-corporate controversy.  Initially, the main consideration in determining whether a dispute constitutes an intra-corporate controversy was limited to a consideration of the intra-corporate relationship existing between or among the parties.  The types of relationships embraced under Section 5(b) x x x were as follows:

a)               between the corporation, partnership or association and the public;

b)               between the corporation, partnership or association and its stockholders, partners, members or officers;

c)                between the corporation, partnership or association and the State as far as its franchise, permit or license to operate is concerned; and

d)               among the stockholders, partners or associates themselves.

The existence of any of the above intra-corporate relations was sufficient to confer jurisdiction to the SEC (now the RTC), regardless of the subject matter of the dispute.  This came to be known as the relationship test.

However, in the 1984 case of DMRC Enterprises v. Esta del Sol Mountain Reserve, Inc., the Court introduced the nature of the controversy test.  We declared in this case that it is not the mere existence of an intra-corporate relationship that gives rise to an intra-corporate controversy; to rely on the relationship test alone will divest the regular courts of their jurisdiction for the sole reason that the dispute involves a corporation, its directors, officers, or stockholders.  We saw that there is no legal sense in disregarding or minimizing the value of the nature of the transactions which gives rise to the dispute.

Under the nature of the controversy test, the incidents of that relationship must also be considered for the purpose of ascertaining whether the controversy itself is intra-corporate.  The controversy must not only be rooted in the existence of an intra-corporate relationship, but must as well pertain to the enforcement of the parties’ correlative rights and obligations under the Corporation Code and the internal and intra-corporate regulatory rules of the corporation.  If the relationship and its incidents are merely incidental to the controversy or if there will still be conflict even if the relationship does not exist, then no intra-corporate controversy exists.

The Court then combined the two tests and declared that jurisdiction should be determined by considering not only the status or relationship of the parties, but also the nature of the question under controversy.  This two-tier test was adopted in the recent case of Speed Distribution Inc. v. Court of Appeals:

‘To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by the branches of the RTC specifically designated by the Court to try and decide such cases, two elements must concur: (a) the status or relationship of the parties, and (2) the nature of the question that is the subject of their controversy.

The first element requires that the controversy must arise out of intra-corporate or partnership relations between any or all of the parties and the corporation, partnership, or association of which they are not stockholders, members or associates, between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership, or association and the State insofar as it concerns the individual franchises.  The second element requires that the dispute among the parties be intrinsically connected with the regulation of the corporation.  If the nature of the controversy involves matters that are purely civil in character, necessarily, the case does not involve an intra-corporate controversy.’ [Citations omitted.]

                Guided by this recent jurisprudence, we thus find no merit in respondents’ contention that the fact alone that petitioner is a stockholder and director of respondent corporation automatically classifies this case as an intra-corporate controversy.  To reiterate, not all conflicts between the stockholders and the corporation are classified as intra-corporate.  There are other factors to consider in determining whether the dispute involves corporate matters as to consider them as intra-corporate controversies.

What then is the nature of petitioner’s Complaint for Illegal Dismissal? Is it intra-corporate and thus beyond the jurisdiction of the Labor Arbiter?  We shall answer this question by using the standards set forth in the Reyes case. 

No intra-corporate relationship between the parties

As earlier stated, petitioner’s status as a stockholder and director of respondent corporation is not disputed.  What the parties disagree on is the finding of the NLRC and the CA that petitioner is a corporate officer.  An examination of the complaint for illegal dismissal, however, reveals that the root of the controversy is petitioner’s dismissal as Manager of respondent corporation, a position which respondents claim to be a corporate office.   Hence, petitioner is involved in this case not in his capacity as a stockholder or director, but as an alleged corporate officer.  In applying the relationship test, therefore, it is necessary to determine if petitioner is a corporate officer of respondent corporation so as to establish the intra-corporate relationship between the parties.  And albeit respondents claim that the determination of whether petitioner is a corporate officer is a question of fact which this Court cannot pass upon in this petition for review on certiorari, we shall nonetheless proceed to consider the same because such question is not the main issue to be resolved in this case but is merely collateral to the core issue earlier mentioned.

Petitioner negates his status as a corporate officer by pointing out that although he was removed as Manager through a board resolution, he was never elected to said position nor was he appointed thereto by the Board of Directors. While the By-Laws of respondent corporation provides that the Board may from time to time appoint such officers as it may deem necessary or proper, he avers that respondents failed to present any board resolution that he was appointed pursuant to said By-Laws.  He instead alleges that he was hired as Manager of respondent corporation solely by respondent Abe.  For these reasons, petitioner claims to be a mere employee of respondent corporation rather than as a corporate officer.

We find merit in petitioner’s contention.

“‘Corporate officers’ in the context of Presidential Decree No. 902-A are those officers of the corporation who are given that character by the Corporation Code or by the corporation’s by-laws.  There are three specific officers whom a corporation must have under Section 25 of the Corporation Code.  These are the president, secretary and the treasurer.  The number of officers is not limited to these three.  A corporation may have such other officers as may be provided for by its by-laws like, but not limited to, the vice-president, cashier, auditor or general manager.  The number of corporate officers is thus limited by law and by the corporation’s by-laws.”^[22][22]

            Respondents claim that petitioner was appointed Manager by virtue of Section 1, Article IV of respondent corporation’s By-Laws which provides:

ARTICLE IV

OFFICER

                Section 1.  Election/Appointment – Immediately after their election, the Board of Directors shall formally organize by electing the President, Vice-President, the Secretary at said meeting.

                The Board, may from time to time, appoint such other officers as it may determine to be necessary or proper.  Any two (2) or more positions may be held concurrently by the same person, except that no one shall act as President and Treasurer or Secretary at the same time. 

x x x x^[23][23] (Emphasis ours)

We have however examined the records of this case and we find nothing to prove that petitioner’s appointment was made pursuant to the above-quoted provision of respondent corporation’s By-Laws.  No copy of board resolution appointing petitioner as Manager or any other document showing that he was appointed to said position by action of the board was submitted by respondents. What we found instead were mere allegations of respondents in their various pleadings^[24][24] that petitioner was appointed as Manager of respondent corporation and nothing more.  “The Court has stressed time and again that allegations must be proven by sufficient evidence because mere allegation is definitely not evidence.”^[25][25]

It also does not escape our attention that respondents made the following conflicting allegations in their Memorandum on Appeal^[26][26] filed before the NLRC which cast doubt on petitioner’s status as a corporate officer, to wit:

x x x x

24.  Complainant-appellee Renato Real was appointed as the manager of respondent-appellant Sangu on November 6, 1998.  Priorly [sic], he was working at Atlas Ltd. Co. at Mito-shi, Ibaraki-ken Japan.  He was staying in Japan as an illegal alien for the past eleven (11) years.  He had a problem with his family here in the Philippines which prompted him to surrender himself to Japan’s Bureau of Immigration and was deported back to the Philippines.  His former employer, Mr. Tsutomo Nogami requested Mr. Masahiko Shibata, one of respondent-appellant Sangu’s Board of Directors, if complainant-appellee Renato Real could work as one of its employees here in the Philippines because he had been blacklisted at Japan’s Immigration Office and could no longer go back to Japan.  And so it was arranged that he would serve as respondent-appellant Sangu’s manager, receiving a salary of P25,000.00.  As such, he was tasked to oversee the operations of the company. x x x  (Emphasis ours)

x x x x

As earlier stated, complainant-appellee Renato Real was hired as the manager of respondent-appellant Sangu.  As such, his position was reposed with full trust and confidence. x x x

            While respondents repeatedly claim that petitioner was appointed as Manager pursuant to the corporation’s By-Laws, the above-quoted inconsistencies in their allegations as to how petitioner was placed in said position, coupled by the fact that they failed to produce any documentary evidence to prove that petitioner was appointed thereto by action or with approval of the board, only leads this Court to believe otherwise.  It has been consistently held that “[a]n ‘office’ is created by the charter of the corporation and the officer is elected (or appointed) by the directors or stockholders.”^[27][27]  Clearly here, respondents failed to prove that petitioner was appointed by the board of directors.  Thus, we cannot subscribe to their claim that petitioner is a corporate officer.  Having said this, we find that there is no intra-corporate relationship between the parties insofar as petitioner’s complaint for illegal dismissal is concerned and that same does not satisfy the relationship test.

Present controversy does not relate to intra-corporate dispute       

            We now go to the nature of controversy test. As earlier stated, respondents terminated the services of petitioner for the following reasons: (1) his continuous absences at his post at Ogino Philippines, Inc; (2) respondents’ loss of trust and confidence on petitioner; and, (3) to cut down operational expenses to reduce further losses being experienced by the corporation.  Hence, petitioner filed a complaint for illegal dismissal and sought reinstatement, backwages, moral damages and attorney’s fees.  From these, it is not difficult to see that the reasons given by respondents for dismissing petitioner have something to do with his being a Manager of respondent corporation and nothing with his being a director or stockholder. For one, petitioner’s continuous absences in his post in Ogino relates to his performance as Manager.  Second, respondents’ loss of trust and confidence in petitioner stemmed from his alleged acts  of establishing a company engaged in the same line of business as respondent corporation’s and submitting proposals to the latter’s clients while he was still serving as its Manager.  While we note that respondents also claim these acts as constituting acts of disloyalty of petitioner as director and stockholder, we, however, think that same is a mere afterthought on their part to make it appear that the present case involves an element of intra-corporate controversy.  This is because before the Labor Arbiter, respondents did not see such acts to be disloyal acts of a director and stockholder but rather, as constituting willful breach of the trust reposed upon petitioner as Manager.^[28][28]  It was only after respondents invoked the Labor Arbiter’s lack of jurisdiction over petitioner’s complaint in the Supplemental Memorandum of Appeal^[29][29] filed before the NLRC that respondents started considering said acts as such. Third, in saying that they were dismissing petitioner to cut operational expenses, respondents actually want to save on the salaries and other remunerations being given to petitioner as its Manager.  Thus, when petitioner sought for reinstatement, he wanted to recover his position as Manager, a position which we have, however, earlier declared to be not a corporate position.  He is not trying to recover a seat in the board of directors or to any appointive or elective corporate position which has been declared vacant by the board.  Certainly, what we have here is a case of termination of employment which is a labor controversy and not an intra-corporate dispute.  In sum, we hold that petitioner’s complaint likewise does not satisfy the nature of controversy test. 

            With the elements of intra-corporate controversy being absent in this case, we thus hold that petitioner’s complaint for illegal dismissal against respondents is not intra-corporate. Rather, it is a termination dispute and, consequently, falls under the jurisdiction of the Labor Arbiter pursuant to Section 217^[30][30] of the Labor Code.

            We take note of the cases cited by respondents and find them inapplicable to the case at bar.  Fortune Cement Corporation v. National Labor Relations Commission^[31][31] involves a member of the board of directors and at the same time a corporate officer who claims he was illegally dismissed after he was stripped of his corporate position of Executive Vice-President because of loss of trust and confidence.  On the other hand, Philippine School of Business Administration v. Leano^[32][32] and Pearson & George v. National Labor Relations Commission^[33][33] both concern a complaint for illegal dismissal by corporate officers who were not re-elected to their respective corporate positions.  The Court declared all these cases as involving intra-corporate controversies and thus affirmed the jurisdiction of the SEC (now the RTC)^[34][34] over them precisely because they all relate to corporate officers and their removal or non-reelection to their respective corporate positions.  Said cases are by no means similar to the present case because as discussed earlier, petitioner here is not a corporate officer.

            With the foregoing, it is clear that the CA erred in affirming the decision of the NLRC which dismissed petitioner’s complaint for lack of jurisdiction.  In cases such as this, the Court normally remands the case to the NLRC and directs it to properly dispose of the case on the merits.  “However, when there is enough basis on which a proper evaluation of the merits of petitioner’s case may be had, the Court may dispense with the time-consuming procedure of remand in order to prevent further delays in the disposition of the case.”^[35][35]  “It is already an accepted rule of procedure for us to strive to settle the entire controversy in a single proceeding, leaving no root or branch to bear the seeds of litigation.  If, based on the records, the pleadings, and other evidence, the dispute can be resolved by us, we will do so to serve the ends of justice instead of remanding the case to the lower court for further proceedings.”^[36][36]  We have gone over the records before us and we are convinced that we can now altogether resolve the issue of the validity of petitioner’s dismissal and hence, we shall proceed to do so.

Petitioner’s dismissal not in accordance with law

            “In an illegal dismissal case, the onus probandi rests on the employer to prove that [the] dismissal of an employee is for a valid cause.”^[37][37]  Here, as correctly observed by the Labor Arbiter, respondents failed to produce any convincing proof to support the grounds for which they terminated petitioner.  Respondents contend that petitioner has been absent for several months, yet they failed to present any proof that petitioner was indeed absent for such a long time.  Also, the fact that petitioner was still able to collect his salaries after his alleged absences casts doubts on the truthfulness of such charge.  Respondents likewise allege that petitioner engaged in a heated argument with the employees of Epson, one of respondents’ clients. But just like in the charge of absenteeism, there is no showing that an investigation on the matter was done and that disciplinary action was imposed upon petitioner.  At any rate, we have reviewed the records of this case and we agree with the Labor Arbiter that under the circumstances, said charges are not sufficient bases for petitioner’s termination. As to the charge of breach of trust allegedly committed by petitioner when he established a new company engaged in the same line of business as respondent corporation’s and submitted proposals to two of the latter’s clients while he was still a Manager, we again observe that these are mere allegations without sufficient proof.  To reiterate, allegations must be proven by sufficient evidence because mere allegation is definitely not evidence.^[38][38]  

            Moreover, petitioner’s dismissal was effected without due process of law.  “The twin requirements of notice and hearing constitute the essential elements of due process.  The law requires the employer to furnish the employee sought to be dismissed with two written notices before termination of employment can be legally effected: (1) a written notice apprising the employee of the particular acts or omissions for which his dismissal is sought in order to afford him an opportunity to be heard and to defend himself with the assistance of counsel, if he desires, and (2) a subsequent notice informing the employee of the employer’s decision to dismiss him.  This procedure is mandatory and its absence taints the dismissal with illegality.”^[39][39]  Since in this case, petitioner’s dismissal was effected through a board resolution and all that petitioner received was a letter informing him of the board’s decision to terminate him, the abovementioned procedure was clearly not complied with.  All told, we agree with the findings of the Labor Arbiter that petitioner has been illegally dismissed.  And, as an illegally dismissed employee is entitled to the two reliefs of backwages and reinstatement,^[40][40] we affirm the Labor Arbiter’s judgment ordering petitioner’s reinstatement to his former position without loss of seniority rights and other privileges and awarding backwages from the time of his dismissal until actually reinstated.  Considering that petitioner has to secure the services of counsel to protect his interest and necessarily has to incur expenses, we likewise affirm the award of attorney’s fees which is equivalent to 10% of the total backwages that respondents must pay petitioner in accordance with this Decision.

            WHEREFORE, the petition is hereby GRANTED.  The assailed June 28, 2005 Decision of the Court of Appeals insofar as it affirmed the National Labor Relations Commission’s dismissal of petitioner’s complaint for lack of jurisdiction, is hereby REVERSED and SET ASIDE.  The June 5, 2003 Decision of the Labor Arbiter with respect to petitioner Renato Real is AFFIRMED and this case is ordered REMANDED to the National Labor Relations Commission for the computation of petitioner’s backwages and attorney’s fees in accordance with this Decision.

            SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:        

RENATO C. CORONA

Chief Justice

Chairperson

JOSE PORTUGAL PEREZ

Associate Justice

C E R T I F I C A T I O N

            Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA

Chief Justice

CASE  NO. 2011-0041: NILO PADRE VS. FRUCTOSA BADILLO, FEDILA BADILLO, PRESENTACION CABALLES, EDWINA VICARIO (D) REPRESENTED BY MARY JOY VICARIO-ORBETA AND NELSON BADILLO (G.R. NO. 165423, 19 JANURY 2011, DEL CASTILLO, J.) SUBJECTS: JURISDICTION OF MTC; CERTIORARI. (BRIEF TITLE: NILO PADRE VS. BADILLO ET AL.) 

x –  – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

D E C I S I O N

DEL CASTILLO, J.:

“A void judgment is no judgment at all.  It cannot be the source of any right nor the creator of any obligation.  All acts performed pursuant to it and all claims emanating from it have no legal effect.”^[1][1]

This petition for review on certiorari assails the Orders dated July 21 and September 20, 2004^[2][2] issued by the Regional Trial Court (RTC) of Allen, Northern Samar, Branch 23 in Special Civil Action No. A-927, which affirmed the ruling of the Municipal Trial Court (MTC) of San Isidro, Northern Samar that it has jurisdiction to try Civil Case No. 104.

Factual Antecedents

On October 13, 1986, the RTC of Allen, Northern Samar, Branch 23, rendered judgment^[3][3] in Civil Case No. A-514 for Ownership and Recovery of Possession with Damages in favor of therein plaintiffs Fructosa Badillo, Fedila Badillo, Edwina Badillo, Presentacion Badillo and Nelson Badillo and against therein defendants, including Consesa Padre.  The dispositive portion of the said Decision reads:

            WHEREFORE, on preponderance of evidence, the Court hereby renders judgment in favor of the plaintiffs and against the defendants, declaring and ordering as follows:

1.               That the herein plaintiffs are the lawful owners of the five-sixth (5/6) portion of Lot No. 4080, Pls-54, registered in Original Certificate of Title No. 736, more particularly, the said five-sixth portion is described, delineated and/or indicated in the Sketch Plan which is now marked as Exhibit “B-1”;

2.              That the said five-sixth (5/6) portion which [is] herein adjudged as being owned by the herein plaintiffs, include the portions of land presently being occupied by defendants x x x, Concesa Padre, x x x;

3.              Ordering the defendants mentioned in No. 2 hereof to vacate x x x the lots respectively occupied by them and restore to [the herein plaintiffs] the material possessions thereof;

4.              Condemning and ordering each of the same defendants herein above-named to pay plaintiffs the amount of P100.00 per month, as monthly rental, starting from January 19, 1980, until the lots in question shall have been finally restored to the plaintiffs; and

5.              Condemning and ordering the herein defendants named above to jointly and severally pay the plaintiffs the amount of P5,000.00 representing attorney’s fees and P2,000.00 as litigation expenses, and to pay the costs of suit.

SO ORDERED.^[4][4] 

            This Decision became final and executory on November 5, 1986.^[5][5] 

            On December 29, 1997, the Badillo family filed another complaint against those who occupy their property which included some of the defendants in Civil Case No. A-514.^[6][6]  The case was filed with the MTC of San Isidro, Northern Samar and was docketed as Civil Case No. 104.^[7][7]  As Consesa Padre had already died in 1989, her heir, Nilo Padre (Nilo), was impleaded as one of the defendants.  While some of the defendants filed their respective answers, Nilo was one of those who were declared in default for failure to file their answer to the complaint.^[8][8]

            Although denominated as one for “Ownership and Possession,” the Badillo family alleged in their complaint in Civil Case No. 104 viz:

4.     That plaintiffs are the joint owners of Lot No. 4080. Pls-54, with a total area of 10,167 square meters, covered by OCT No. 736 in the name of Eutequio Badillo, deceased husband of plaintiff Fructosa Badillo and father of the rest of the other plaintiffs, covered by Tax Declaration No. 9160 and assessed at P26,940.00;

5.     That plaintiffs in Civil Case No. A-514, entitled Fructosa Badillo versus Celso Castillo, et. al., were the prevailing parties in the aforesaid case as evidenced by the hereto attached copy of the decision rendered by the Regional Trial Court in the above-entitled case and marked as Annex “A” and made integral part of this complaint;

6.     That after the judgment in the above-mentioned case became final, the same was executed as evidenced by a copy of the writ of execution hereto attached as Annex “B” and made integral part hereof;

7.     That despite the service of the writ of execution and vacating the properties x x x illegally occupied by the afore-mentioned defendants, [said defendants] re-entered the property in 1990 after the execution and refused to vacate the same [thereby] reasserting their claims of ownership x x x despite repeated demands;

8.     That all attempts towards a peaceful settlement of the matter outside of Court to avoid a civil suit, such as referring the matter of the Brgy. Captain and the Brgy. Lupon of Brgy. Alegria, San Isidro, N. Samar were of no avail as the defendants refused to heed lawful demands of plaintiffs to x x x vacate the premises[. I]nstead, defendants claimed ownership of the property in question [and] refused to vacate the same despite repeated demands [such] that having lost all peaceful remedies, plaintiffs were constrained to file this suit.  Certificate to file Action is hereby attached and marked as Annex “C” and made integral part hereof;^[9][9]  (Emphasis supplied.)

Ruling of the Municipal Trial Court

            The MTC rendered judgment^[10][10] on July 17, 2003.  Interpreting the suit of the Badillo family as an action to revive the dormant judgment in Civil Case No. A-514, the court recognized the right of the plaintiffs to finally have such judgment enforced.  The MTC disposed of the case as follows:

WHEREFORE, judgment is ordered reviving the previous judgment of the Regional Trial Court there being, and still, preponderance of evidence in favor of plaintiffs, as follows:

1.              That the herein plaintiffs are the lawful owners of the five-sixth (5/6) portion of Lot No. 4080, Pls-54, registered in Original Certificate of Title No. 730, more particularly x x x described, delineated and/or indicated in the Sketch Plan which is now marked as Exhibit “B-1”;

2.              That the said five-sixth portion which is herein adjudged as being owne[d] by herein plaintiffs, includes the portions of land presently being occupied by defendants Victor Eulin, Consesa Padre, Celso Castillo, Leo Atiga, Santos Corollo, Iñego Armogela, Salustiano Millano, Milagros Gile, Pusay Enting, Galeleo Pilapil, more particularly indicated in Exhibit “B-1” and marked as Exhibits “B-3”, “B-4”, “B-5,” “B-6,” “B-7,” “B-8,” “B-9,” “B-10,” “B-11,” “B-12,” and “B-13”, respectively;

3.              Ordering the defendants mentioned in No. 2, hereof and THOSE PRESENTLY NAMED AS PARTY-DEFENDANTS IN THIS REVIVAL OF JUDGMENT AND THOSE ACTING IN PRIVITY to vacate from the lots respectively occupied by them and restore [to] the herein plaintiff x x x the material possession thereof;

4.              Condemning and ordering each of the same defendants named in the previous civil case and those NAMED ANEW to jointly and severally pay the plaintiffs the amount of P5,000.00, representing attorney’s fees, and P2,000.00 as litigation expenses;

5.              CONDEMNING ALL DEFENDANTS HEREIN TO PAY EXEMPLARY DAMAGES FOR OBSTINATELY VIOLATING THE DECISION OF THE COURT JOINTLY AND SEVERALLY X X X THE AMOUNT OF P5,000.00, and to pay the costs of the suit.

SO ORDERED.^[11][11]       

            Nilo thereafter appeared and moved to reconsider^[12][12] the MTC judgment.  He argued that the MTC is without jurisdiction over the case, opining that the action for revival of judgment is a real action and should be filed with the same court, i.e., the RTC, which rendered the decision sought to be revived.  Or, assuming arguendo that the MTC has jurisdiction over real actions, it must be noted that the subject property is assessed at P26,940.00, an amount beyond the P20,000.00 limit for the MTC to have jurisdiction over real actions, in accordance with Republic Act (RA) No. 7691.^[13][13] Nilo also contended that the action is dismissible for a) lack of certificate of non-forum shopping in the complaint and b) prescription, the complaint for revival of judgment having been filed beyond the 10-year reglementary period^[14][14] from the time the judgment sought to be revived became final and executory in November 1986.       

            The MTC denied the motion for reconsideration.^[15][15]  It held that the case is an action for revival of judgment and not an action for ownership and possession, which had already long been settled.  To the MTC, the former is a personal action under Section 2, Rule 4 of the Rules of Court which may be filed, at the election of plaintiffs, either at the court of the place where they reside or where the defendants reside.  The court found excusable the absence of the certification against forum shopping, justifying that the action filed before it is merely a continuation of the previous suit for ownership.  Moreover, the counsel for the Badillo family, a nonagenarian, may not yet have been familiar with the rule when Civil Case No. 104 was filed.  To it, this mistake should not prejudice the Badillo family who deserve to possess and enjoy their properties.

Ruling of the Regional Trial Court

            By way of a special civil action for certiorari, Nilo elevated the case to the RTC to question the MTC’s jurisdiction,^[16][16] reiterating the same grounds he had raised before the MTC.  The case was docketed as Special Civil Action No. A-927.

On July 21, 2004, however, the RTC dismissed said petition^[17][17] on the ground that it was filed late.  Moreover, the RTC upheld the MTC’s jurisdiction over the case, affirming the MTC’s ratiocination that an action for enforcement of a dormant judgment is a personal action, and hence may be filed either at the court of the place where plaintiffs reside or where the defendants reside.

            In his Motion for Reconsideration,^[18][18] Nilo contended that his petition with the RTC was timely filed as shown by the registry receipt dated March 1, 2004,^[19][19] stamped on the mailing envelope he used in filing said petition.  He argued that this date of mailing is also the date of filing.  He also contended that the RTC’s Decision was bereft of any explanation as to why it ruled that the case is a personal action.  He further alleged that the RTC failed to discuss the issues of prescription and non-compliance with the rule against forum shopping.   

            In its Order dated September 20, 2004, the RTC denied the motion for reconsideration.  It said:

Assuming  that  the  date  of  posting was March 1, 2004, as shown in the registry

receipts, still the 60-day reglementary period had already lapsed with December 30, 2003 as the reckoning period when petitioner received the December 9, 2003 Order of Hon. Judge Jose A. Benesisto.  With the month of February, 2004 having 29 days, it is now clear that the petition was filed sixty one (61) days after; hence, there is no timeliness of the petition to speak of.

                Civil Case No. 104 is an ordinary action to enforce a dormant judgment filed by plaintiffs against defendants.  Being an action for the enforcement of dormant judgment for damages is a personal one and should be brought in any province where the plaintiff or defendant resides, at the option of the plaintiff.  As regards prescription, the present rule now is, the prescriptive period commences to run anew from the finality of the revived judgment. A revived judgment is enforceable again by motion within five years and thereafter by another action within ten years from the finality of the revived judgment.  There is, therefore, no prescription or beyond the statute of limitations to speak [sic] in the instant case.  Petitioner’s contention must therefore fail.

                It is but proper and legal that the plaintiffs in Civil Case No. 514 of which they are the prevailing parties to institute for the enforcement of a dormant judgment [which right] they have failed to exercise x x x for more than a decade.  Being an ordinary action to enforce a dormant judgment, not even testimonial evidence is necessary to enforce such judgment because the decision had long obtained its finality.

x x x x^[20][20]

            Hence, this petition.

Petitioner’s Arguments

            Nilo finds the RTC’s adverse ruling as wanting in sufficient explanation as to the factual and legal bases for upholding the MTC.  He also highlights the failure of the Badillo family to attach to their complaint a certificate of non-forum shopping.  Petitioner also argues that the date of mailing of his petition with the RTC is the date of his filing.  He stressed that the filing of his petition on March 1, 2004 was well within the prescriptive period.  As the 60^th day from December 30, 2003 fell on a Saturday, he maintains that the Rules of Court allows him to file his petition on the next working day, which is March 1, 2004, a Monday.

            As  have  already  been   raised  in   the  courts   below,  Nilo   mentions  the

following grounds for the dismissal of the action against him before the MTC:

a)           The MTC lacks jurisdiction.  Nilo reiterates that the prime objective of the Badillo family in Civil Case No. 104 is to recover real property, which makes it a real action.  Citing the case of Aldeguer v. Gemelo,^[21][21] he contends that this suit must be brought before the RTC of Allen, Northern Samar.  Besides, the assessed value of the land in controversy, i.e., P26,940.00, divests the MTC of jurisdiction.       

b)          Prescription.  Nilo claims that the Badillo family’s suit had already lapsed as they allowed 11 years to pass without resorting to any legal remedy before filing the action for revival of judgment.  Although the Badillo family moved for the issuance of a writ of execution in Civil Case No. A-514, the same did not interrupt the running of the period to have the judgment enforced by motion or by action.     

Respondents’ Arguments

            While impliedly acknowledging that Nilo seasonably filed his petition for certiorari with the RTC, the Badillo family note that he should have filed an appeal before the RTC.  They claim that they properly filed their case, a personal action, with the MTC of San Isidro, Northern Samar as they are allowed under Section 2, Rule 4 of the Rules of Court to elect the venue as to where to file their case. 

Granting that their action is considered a revival of judgment, the Badillos claim that they filed their suit within the 10-year period.  They contend that in filing Civil Case No. 104 in December 1997, the prescriptive period should not be counted from the finality of judgment in Civil Case No. A-514, but should be reckoned from August 22, 1989, when the RTC issued an Order that considered as abandoned  the  motion  to   declare  the  defendants   in  default  in  the   contempt

proceedings.

Issue

            The question that should be settled is whether the RTC correctly affirmed the MTC ruling that it has jurisdiction over Civil Case No. 104.

Our Ruling

            Indeed, “[t]he existence and availability of the right of appeal proscribes a resort to certiorari.”^[22][22]  The court a quo could have instead dismissed Nilo’s petition on the ground that this question should have been raised by way of an appeal.^[23][23]  This rule is subject to exceptions, such as “when the writs issued are null and void or when the questioned order amounts to an oppressive exercise of judicial authority.”^[24][24]  As will be later on discussed, the RTC, although it ultimately erred in its judgment, was nevertheless correct in entertaining the special civil action for certiorari.  The exceptions we mentioned apply in the case at bar, as it turns out that petitioner’s jurisdictional objection has compelling basis.        

Timeliness of the petition for certiorari

The petition for certiorari before the RTC was timely filed.  If the pleading filed was not done personally, the date of mailing, as stamped on the envelope or the registry receipt, is considered as the date of filing.^[25][25]  By way of registered mail, Nilo filed his petition for certiorari with the RTC on March 1, 2004, as indicated in the date stamped on its envelope.  From the time Nilo received on December 30, 2003 the MTC’s denial of his motion for reconsideration, the last day for him to file his petition with the RTC fell on February 28, 2004, a Saturday.  Under the Rules, should the last day of the period to file a pleading fall on a Saturday, a Sunday, or a legal holiday, a litigant is allowed to file his or her pleading on the next working day,^[26][26] which in the case at bar, fell on a Monday, i.e., March 1, 2004.

Jurisdiction over Civil Case No. 104

We shall now look into the core argument of Nilo anent the MTC’s lack of jurisdiction over the case and the alleged prescription of the action.

“[W]hat determines the nature of the action and which court has jurisdiction over it are the allegations in the complaint and the character of the relief sought.”^[27][27]  In their complaint in Civil Case No. 104, some of the allegations of the Badillo family, which petitioner never opposed and are thus deemed admitted by him, states:

4.     That plaintiffs are the joint owners of Lot No. 4080. Pls-54, with a total area of 10,167 square meters, covered by OCT No. 736 in the name of Eutequio Badillo, deceased husband of plaintiff Fructosa Badillo and father of the rest of the other plaintiffs, covered by Tax Declaration No. 9160 and assessed at P26,940.00;

5.     That plaintiffs in Civil Case No. A-514, entitled Fructosa Badillo versus Celso Castillo, et. al., were the prevailing parties in the aforesaid case as evidenced by the hereto attached copy of the decision rendered by the Regional Trial Court in the above-entitled case and marked as Annex “A” and made integral part of this complaint;

6.     That after the judgment in the above-mentioned case became final, the same was executed as evidenced by a copy of the writ of execution hereto attached as Annex “B” and made integral part hereof;

7.     That despite the service of the writ of execution and vacating the properties x x x illegally occupied by the afore-mentioned defendants, the latter re-entered the property in 1990 after the execution and refused to vacate the same [thereby] reasserting their claims of ownership over [the disputed properties] and refused to vacate the same despite repeated demands;

                8.     That all attempts towards a peaceful settlement of the matter outside of Court to avoid a civil suit, such as referring the matter of the Brgy. Captain and the Brgy. Lupon of Brgy. Alegria, San Isidro, N. Samar were of no avail as the defendants refused to heed lawful demands of plaintiffs to x x x vacate the premises[. I]nstead, defendants claimed ownership of the property in question refused to vacate the same despite repeated demands [such] that having lost all peaceful remedies, plaintiffs were constrained to file this suit.  Certificate to file Action is hereby attached and marked as Annex “C” and made integral part hereof;^[28][28]  (Emphasis supplied.)

Under paragraph 6 of their complaint, the Badillos alleged that judgment in Civil Case No. A-514 had become final and had been executed.  Further, in paragraph 7, they alleged that in 1990, the defendants re-entered the property and despite repeated demands they refused to vacate the same.  Thus, the Badillos were not at all seeking a revival of the judgment.  In reality, they were asking the MTC to legally oust the occupants from their lots. 

The Badillo family would have been correct in seeking judicial recourse from the MTC had the case been an action for ejectment, i.e., one of forcible entry under Rule 70 of the Rules of Court wherein essential facts constituting forcible entry^[29][29] have been averred and the suit filed within one year from the time of unlawful deprivation or withholding of possession, as the MTC has exclusive original jurisdiction over such suit.^[30][30]  However, as the alleged dispossession occurred in 1990, the one-year period to bring a case for forcible entry had expired since the Badillos filed their suit only in December 1997.  We thus construe that the remedy they availed of is the plenary action of accion publiciana, which may be instituted within 10 years.^[31][31]  “It is an ordinary civil proceeding to determine the better right of possession of realty independently of title. It also refers to an ejectment suit filed after the expiration of one year from the accrual of the cause of action or from the unlawful withholding of possession of the realty.”^[32][32] 

Whether the case filed by the Badillo family is a real or a personal action is irrelevant.  Determining whether an action is real or personal is for the purpose only of determining venue.  In the case at bar, the question raised concerns jurisdiction, not venue.

Although the Badillo family correctly filed a case for accion publiciana, they pleaded their case before the wrong court.  In civil cases involving realty or interest therein not within Metro Manila, the MTC has exclusive original jurisdiction only if the assessed value of the subject property or interest therein does not exceed P20,000.00.^[33][33]  As the assessed value of the property subject matter of this case is P26,940.00, and since more than one year had expired after the dispossession, jurisdiction properly belongs to the RTC.^[34][34]  Hence, the MTC has no judicial authority at all to try the case in the first place.  “A decision of the court without jurisdiction is null and void; hence, it could never logically become final and executory. Such a judgment may be attacked directly or collaterally.”^[35][35] 

Based on the foregoing discussion, it is not anymore necessary to discuss the issue raised concerning the failure to include a certification of non-forum shopping.  

Although we are compelled to dismiss respondents’ action before the MTC, they are nonetheless not precluded from filing the necessary judicial remedy with the proper court.  

WHEREFORE, the petition is GRANTED.  The Orders dated July 21 and September 20, 2004 of the Regional Trial Court of Allen, Northern Samar, Branch 23 in Special Civil Action No. A-927 are hereby SET ASIDE.  The Municipal Trial Court of San Isidro, Northern Samar is DIRECTED to dismiss Civil Case No. 104 for lack of jurisdiction.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

Chairperson

JOSE PORTUGAL PEREZ

Associate Justice

C E R T I F I C A T I O N

            Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA

Chief Justice