THIRD DIVISION

[G.R. No. 180321. March 20, 2013.]

EDITHA PADLAN, petitioner, vs. ELENITA DINGLASAN and

DECISION

PERALTA, J p:

This is a petition for review on certiorari assailing the Decision 1 dated June 29, 2007 of the Court
of Appeals (CA) in CA-G.R. CV No. 86983, and the Resolution 2 dated October 23, 2007 denying
petitioner's Motion for Reconsideration. 3
The factual and procedural antecedents are as follows:
Elenita Dinglasan (Elenita) was the registered owner of a parcel of land designated as Lot No.
625 of the Limay Cadastre which is covered by Transfer Certificate of Title (TCT) No. T-105602, with an
aggregate area of 82,972 square meters. While on board a jeepney, Elenita's mother, Lilia Baluyot (Lilia),
had a conversation with one Maura Passion (Maura)regarding the sale of the said property. Believing that
Maura was a real estate agent, Lilia borrowed the owner's copy of the TCT from Elenita and gave it to
Maura. Maura then subdivided the property into several lots from Lot No. 625-A to Lot No. 625-O, under
the name of Elenita and her husband Felicisimo Dinglasan (Felicisimo).
Through a falsified deed of sale bearing the forged signature of Elenita and her husband
Felicisimo, Maura was able to sell the lots to different buyers. On April 26, 1990, Maura sold Lot No. 625-
K to one Lorna Ong (Lorna), who later caused the issuance of TCT No. 134932 for the subject property
under her name. A few months later, or sometime in August 1990, Lorna sold the lot to petitioner
Editha Padlan for P4,000.00. Thus, TCT No. 134932 was cancelled and TCT No. 137466 was issued in the
name of petitioner. HESIcT
After learning what had happened, respondents demanded petitioner to surrender possession
of Lot No. 625-K, but the latter refused. Respondents were then forced to file a case before the Regional
Trial Court (RTC) of Balanga, Bataan for the Cancellation of Transfer Certificate of Title No. 137466,
docketed as Civil Case No. 438-ML. Summons was, thereafter, served to petitioner through her mother,
Anita Padlan.
On December 13, 1999, respondents moved to declare petitioner in default and prayed that they
be allowed to present evidence ex parte. 4
On January 17, 2000, petitioner, through counsel, filed an Opposition to Declare Defendant in
Default with Motion to Dismiss Case for Lack of Jurisdiction Over the Person of Defendant. 5 Petitioner
claimed that the court did not acquire jurisdiction over her, because the summons was not validly served
upon her person, but only by means of substituted service through her mother. Petitioner maintained
that she has long been residing in Japan after she married a Japanese national and only comes to the
Philippines for a brief vacation once every two years.
 On April 5, 2001, Charlie Padlan, the brother of petitioner, testified that his sister is still in Japan
and submitted a copy of petitioner's passport and an envelope of a letter that was allegedly sent by his
sister. Nevertheless, on April 5, 2001, the RTC issued an Order 6 denying petitioner's motion to dismiss
and declared her in default. Thereafter, trial ensued.
On July 1, 2005, the RTC rendered a Decision 7 finding petitioner to be a buyer in good faith and,
consequently, dismissed the complaint.
Not satisfied, respondents sought recourse before the CA, docketed as CA-G.R. No. CV No.
86983.
On June 29, 2007, the CA rendered a Decision 8 in favor of the respondent. Consequently, the
CA reversed and set aside the Decision of the RTC and ordered the cancellation of the TCT issued in the
name of Lorna and the petitioner, and the revival of respondents' own title, to wit:
WHEREFORE, in view of the foregoing, the Decision dated July 1, 2005 of
the Regional Trial Court, Third Judicial Region, Branch 4, Mariveles, Bataan
(Stationed in Balanga, Bataan) in Civil Case No. 438-ML is
hereby REVERSED and SET ASIDE.
The Transfer Certificate of Title No. 134932 issued in the name of Lorna Ong
and Transfer Certificate of Title No. 137466 issued in the name of defendant-appellee
Editha Padlan are CANCELLED and Transfer Certificate of Title No. 134785 in the
name of the plaintiffs-appellants is REVIVED. aCTHDA
SO ORDERED. 9
The CA found that petitioner purchased the property in bad faith from Lorna. The CA opined
that although a purchaser is not expected to go beyond the title, based on the circumstances surrounding
the sale, petitioner should have conducted further inquiry before buying the disputed property. The fact
that Lorna bought a 5,000-square-meter property for only P4,000.00 and selling it after four months for
the same amount should have put petitioner on guard. With the submission of the Judgment in Criminal
Case No. 4326 rendered by the RTC, Branch 2, Balanga, Bataan, entitled People of the Philippines v.
Maura Passion 10 and the testimonies of respondents, the CA concluded that respondents sufficiently
established that TCT No. 134932 issued in the name of Lorna and TCT No. 137466 issued in the name of
petitioner were fraudulently issued and, therefore, null and void.
Aggrieved, petitioner filed a Motion for Reconsideration. Petitioner argued that not only did the
complaint lacks merit, the lower court failed to acquire jurisdiction over the subject matter of the case
and the person of the petitioner.
On October 23, 2007, the CA issued a Resolution 11 denying the motion. The CA concluded that
the rationale for the exception made in the landmark case of Tijam v. Sibonghanoy 12 was present in the
case. It reasoned that when the RTC denied petitioner's motion to dismiss the case for lack of jurisdiction,
petitioner neither moved for a reconsideration of the order nor did she avail of any remedy provided by
the Rules. Instead, she kept silent and only became interested in the case again when the CA rendered a
decision adverse to her claim.
Hence, the petition assigning the following errors:
I
WHETHER OR NOT THE HONORABLE COURT HAS JURISDICTION OVER THE
PERSON OF THE PETITIONER.
II
 WHETHER OR NOT THE HONORABLE COURT HAS JURISDICTION OVER THE
SUBJECT MATTER OF THE CASE. HCacTI
III
WHETHER OR NOT PETITIONER IS A BUYER IN GOOD FAITH AND FOR
VALUE. 13
Petitioner maintains that the case of Tijam v. Sibonghanoy finds no application in the case at bar,
since the said case is not on all fours with the present case. Unlike in Tijam, wherein the petitioner therein
actively participated in the proceedings, petitioner herein asserts that she did not participate in any
proceedings before the RTC because she was declared in default.
Petitioner insists that summons was not validly served upon her, considering that at the time
summons was served, she was residing in Japan. Petitioner contends that pursuant to Section 15, Rule 14
of the Rules of Civil Procedure, when the defendant does not reside in the Philippines and the subject of
the action is property within the Philippines of the defendant, service may be effected out of the
Philippines by personal service or by publication in a newspaper of general circulation. In this case,
summons was served only by substituted service to her mother. Hence, the court did not acquire
jurisdiction over her person.
Also, petitioner posits that the court lacks jurisdiction of the subject matter, considering that
from the complaint, it can be inferred that the value of the property was only P4,000.00, which was the
amount alleged by respondents that the property was sold to petitioner by Lorna.
Finally, petitioner stresses that she was a buyer in good faith. It was Maura who defrauded the
respondents by selling the property to Lorna without their authority.
Respondents, on the other hand, argue that the CA was correct in ruling in their favor.
The petition is meritorious.
Respondents filed the complaint in 1999, at the time Batas Pambansa Blg. (BP) 129, the
Judiciary Reorganization Act of 1980, was already amended by Republic Act (RA) No. 7691, An Act
Expanding the Jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts, amending for the purpose BP Blg. 129. 14 Section 1 of RA 7691, amending BP Blg. 129,
provides that the RTC shall exercise exclusive original jurisdiction on the following actions: IcHTAa
Section 1.Section 19 of Batas Pambansa Blg. 129, otherwise known as the
"Judiciary Reorganization Act of 1980," is hereby amended to read as follows:
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; . . .
Section 3 of RA 7691 expanded the exclusive original jurisdiction of the first level courts, thus:
 Section 3.Section 33 of the same law [BP Blg. 129] is hereby amended to
read as follows:
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial
Courts and Municipal Circuit Trial Courts in Civil Cases. — Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall
exercise:
xxx xxx xxx
(3) Exclusive original jurisdiction in all civil actions which
involve title to, or possession of, real property, or any
interest therein where the assessed value of the property
or interest therein does not exceed Twenty Thousand
Pesos (P20,000.00) or, in civil actions in Metro Manila,
where such assessed value does not exceed Fifty
Thousand Pesos (P50,000.00) exclusive of interest,
damages of whatever kind, attorney's fees, litigation
expenses and costs: Provided, That in cases of land not
declared for taxation purposes, the value of such
property shall be determined by the assessed value of
the adjacent lots. AIHECa
Respondents filed their Complaint with the RTC; hence, before proceeding any further with any
other issues raised by the petitioner, it is essential to ascertain whether the RTC has jurisdiction over the
subject matter of this case based on the above-quoted provisions.
However, in order to determine which court has jurisdiction over the action, an examination of
the complaint is essential. Basic as a hornbook principle is that jurisdiction over the subject matter of a
case is conferred by law and determined by the allegations in the complaint which comprise a concise
statement of the ultimate facts constituting the plaintiff's cause of action. The nature of an action, as well
as which court or body has jurisdiction over it, is determined based on the allegations contained in the
complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to recover upon all or
some of the claims asserted therein. The averments in the complaint and the character of the relief
sought are the ones to be consulted. Once vested by the allegations in the complaint, jurisdiction also
remains vested irrespective of whether or not the plaintiff is entitled to recover upon all or some of the
claims asserted therein. 15
What determines the jurisdiction of the court is the nature of the action pleaded as appearing
from the allegations in the complaint. The averments therein and the character of the relief sought are
the ones to be consulted. 16
Respondents' Complaint 17 narrates that they are the duly registered owners of Lot No. 625 of
the Limay Cadastre which was covered by TCT No. T-105602. Without their knowledge and consent, the
land was divided into several lots under their names through the fraudulent manipulations of Maura. One
of the lots was Lot 625-K, which was covered by TCT No. 134785. On April 26, 1990, Maura sold the
subject lot to Lorna. By virtue of the fictitious sale, TCT No. 134785 was cancelled and TCT No. 134932
was issued in the name of Lorna. Sometime in August 1990, Lorna sold the lot to petitioner for a
consideration in the amount of P4,000.00. TCT No. 134932 was later cancelled and TCT No. 137466 was
issued in the name of petitioner. Despite demands from the respondents, petitioner refused to surrender
possession of the subject property. Respondents were thus constrained to engage the services of a
lawyer and incur expenses for litigation. Respondents prayed for the RTC (a) to declare TCT No. 137466
null and to revive TCT No. T-105602 which was originally issued and registered in the name of the
respondents; and (b) to order petitioner to pay attorney's fees in the sum of P50,000.00 and litigation
expenses of P20,000.00, plus cost of suit. 18
 An action "involving title to real property" means that the plaintiff's cause of action is based on a
claim that he owns such property or that he has the legal rights to have exclusive control, possession,
enjoyment, or disposition of the same. Title is the "legal link between (1) a person who owns property
and (2) the property itself." "Title" is different from a "certificate of title" which is the document of
ownership under the Torrens system of registration issued by the government through the Register of
Deeds. While title is the claim, right or interest in real property, a certificate of title is the evidence of
such claim. 19
In the present controversy, before the relief prayed for by the respondents in their complaint can
be granted, the issue of who between the two contending parties has the valid title to the subject lot
must first be determined before a determination of who between them is legally entitled to the
certificate of title covering the property in question.
From the Complaint, the case filed by respondent is not simply a case for the cancellation of a
particular certificate of title and the revival of another. The determination of such issue merely follows
after a court of competent jurisdiction shall have first resolved the matter of who between the conflicting
parties is the lawful owner of the subject property and ultimately entitled to its possession and
enjoyment. The action is, therefore, about ascertaining which of these parties is the lawful owner of the
subject lot, jurisdiction over which is determined by the assessed value of such lot. 20
In no uncertain terms, the Court has already held that a complaint must allege the assessed
value of the real property subject of the complaint or the interest thereon to determine which court has
jurisdiction over the action. 21 In the case at bar, the only basis of valuation of the subject property is the
value alleged in the complaint that the lot was sold by Lorna to petitioner in the amount of P4,000.00. No
tax declaration was even presented that would show the valuation of the subject property. In fact, in one
of the hearings, respondents' counsel informed the court that they will present the tax declaration of the
property in the next hearing since they have not yet obtained a copy from the Provincial Assessor's
Office. 22 However, they did not present such copy. IESTcD
To reiterate, where the ultimate objective of the plaintiffs is to obtain title to real property, it
should be filed in the proper court having jurisdiction over the assessed value of the property subject
thereof. 23 Since the amount alleged in the Complaint by respondents for the disputed lot is only
P4,000.00, the MTC and not the RTC has jurisdiction over the action. Therefore, all proceedings in the
RTC are null and void. 24
Consequently, the remaining issues raised by petitioner need not be discussed further.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV
No. 86983, dated June 29, 2007, and its Resolution dated October 23, 2007, are REVERSED and SET
ASIDE. The Decision of the Regional Trial Court, dated July 1, 2005, is declared NULL and VOID. The
complaint in Civil Case No. 438-ML is dismissed without prejudice.
SO ORDERED.
Velasco, Jr., Abad, Mendoza and Leonen, JJ., concur.
||| (Padlan v. Spouses Dinglasan, G.R. No. 180321, [March 20, 2013], 707 PHIL 83-94)