Lack of jurisdiction over the subject matter may be raised at any time, during appeal or even after final judgment. The issue of lack of jurisdiction is not lost by waiver or estoppel. This is illustrated in this case of the spouses Gana, the spouses Manas, the spouses Vega and the spouses De Gala.
The case involved a two-storey townhouse unit No. 8 built on 54 sq. m portion of a land covered by TCT No. 195187 owned by the spouses Gana who were in real estate business as builder, developer and seller. The case arose because of three transactions involving said townhouse unit No. 8.
The first was on August 6, 1988, when the spouses Gana sold it in favor of the spouses Manas for P850,000. The second was in December 1988 when the spouses Gana transferred the same townhouse No 8 in favor of the spouses Vega in exchange for townhouse No. 12 that was previously sold to the spouses Vega in payment of the construction materials bought by the spouses Gana from them. And the third was on May 10, 1990 when the spouses Gana borrowed money and mortgaged the same townhouse No. 8 this time in favor of the spouses De Gala who subsequently acquired the property in the foreclosure sale on October 12, 1990 upon failure of the spouses Gana to pay the loan.
So on November 13, 1990, the spouses Manas filed a complaint against the spouses Gana, Vega, and De Gala with the Regional Trial Court (RTC) for declaration of nullity of the transfer to spouses Vega and the mortgage in favor of the spouses De Gala of the said townhouse unit No. 8 which they had previously purchased.
On December 6, 1990, the spouses Vega also filed a case against the spouses Gana and De Gala before the RTC for Declaration of Nullity of the Mortgage Contract.
When the two cases were consolidated in one RTC Branch as they involved interrelated issues, the spouses Vega raised the lack of jurisdiction of the RTC on the ground that it is the Housing Land Use and Regulatory Board (HLURB) that had jurisdiction over the subject matter.
The RTC however ignored this issue of lack of jurisdiction and eventually ruled in favor of the spouses De Gala declaring them as the absolute owners of townhouse No. 8.
On appeal by the spouses Manas and Vega, the Court of Appeals (CA) set aside the RTC decision and ruled in favor of the spouses Manas. The CA said that the mortgage in favor of the De Galas cannot defeat the right of the spouses Manas. On other hand, as between the spouses Vega and the spouses Manas, the latter had a better right to the property. On the issue of jurisdiction, the CA ruled that the Vega spouses are estopped from raising it since they also filed a suit in the RTC and took active part in the trial. Was the CA correct?
No. Under P.D. 957 as amended by P.D. 1344, the questioned transactions entered into by the spouses Gana over townhouse No. 8 as owner and developer falls within the jurisdiction of the HLURB because they involved unsound real estate business practices and claims for specific performance of contractual or statutory obligations by buyers against the project owner, developer, dealer or salesmen.
Clearly the trial court had no jurisdiction and should have dismissed the cases. It is the duty of the court to dismiss an action whenever it appears that the court has no jurisdiction over the subject matter.
The Vega spouses are not estopped from raising the issue of lack of jurisdiction. Jurisdiction of a court may be questioned at any stage of the proceedings. Their filing of a complaint before the RTC that lacks jurisdiction is not sufficient basis to consider them in estoppel. It could have been the result of an honest mistake or of divergent interpretations of doubtful legal provisions. If any fault is to be imputed to a party taking such course of action, part of the blame should be placed on the court which entertains the suit thereby lulling the parties into believing that they pursued their remedies in the proper forum.
The operation of the principle of estoppel depends on whether the lower had jurisdiction or not. If it had no jurisdiction, but the case was tried and decided upon the theory that it had jurisdiction, the parties are not barred from assailing, on appeal, such jurisdiction, for the same must exist as a matter of law and may not be conferred by consent of the parties or by estoppel. However if the lower court had jurisdiction and the case was heard and decided on the given theory that the lower court had no jurisdiction, the party who induced it to adopt such theory cannot assume an inconsistent position that the lower court had jurisdiction.
Hence the two cases filed in this case before the RTC should be dismissed (Vargas vs. Garcia et.al. G.R. 137869; De Guzman vs. Caminas, et. al, G.R. 137940, June 12, 2008).
Note: Books containing compilation of my articles on Labor Law and Criminal Law (Vols. I and II) are now available. Call tel. 7249445.
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