Barangay San Roque vs. Heirs of Francisco Pastor

An expropriation suit is incapable of pecuniary estimation and falls within the exclusive original jurisdiction of the Regional Trial Court, irrespective of the assessed value of the property involved. The test is whether the principal action seeks the recovery of a sum of money; if the basic issue is something other than a money claim, or the money claim is merely incidental or consequential, the action is not capable of pecuniary estimation. Expropriation primarily concerns the State’s right and authority to appropriate private property for public use, not the recovery of a sum, making it cognizable exclusively by the RTC.

Barangay San Roque, Talisay, Cebu sought to exercise the power of eminent domain over a parcel of land owned by the Heirs of Francisco Pastor. The barangay initiated a complaint for expropriation before the Municipal Trial Court of Talisay, Cebu. The MTC dismissed the complaint, holding that an eminent domain suit is principally an exercise of governmental power and does not fall within its jurisdiction; it opined that such actions belong to the Regional Trial Court. The barangay then refiled the complaint before the Regional Trial Court of Cebu City. The RTC, however, granted the heirs’ motion to dismiss on the ground that an action for eminent domain affects title to or possession of real property. Because the property’s assessed value was only P1,740—below the P20,000 threshold under Republic Act No. 7691—the RTC concluded that exclusive original jurisdiction resided with the MTC. This contradictory stance of the two lower courts prompted the barangay to elevate the jurisdictional question directly to the Supreme Court.

• Nature: Petitioner Barangay San Roque filed a complaint for eminent domain seeking to expropriate real property belonging to the Heirs of Francisco Pastor.
• Property Value: The property’s current tax declaration indicated an assessed value of P1,740.00, an amount below the P20,000.00 jurisdictional threshold provided under Rep. Act No. 7691 for real actions.
• MTC Proceedings: The complaint was first lodged before the MTC of Talisay, Cebu. The MTC dismissed the case on its own motion, reasoning that “eminent domain is an exercise of the power to take private property for public use after payment of just compensation” and that the fact the action involves real property is merely incidental; thus, exclusive original jurisdiction belonged to the RTC.
• RTC Proceedings: When the barangay refiled before the RTC of Cebu City, the RTC granted the respondents’ motion to dismiss. The RTC characterized the eminent domain suit as a real action affecting title to or possession of real property and applied Section 3(3) of Rep. Act No. 7691, which vests exclusive original jurisdiction over such actions in the MTC where the assessed value is below P20,000. The RTC therefore concluded that it had no jurisdiction and that the case should have remained with the MTC.

• Incapable of Pecuniary Estimation: Petitioner argued that an expropriation suit is incapable of pecuniary estimation under Section 19(1) of BP 129. The principal subject of the litigation is the government’s sovereign right to take private property for public use, not the recovery of a sum of money; just compensation is only an incident of the main action. Thus, exclusive original jurisdiction belongs to the RTC regardless of the assessed value of the property.

• Real Action Affecting Title: Respondents contended that a complaint for eminent domain affects the title to or possession of real property. Under Section 3(3) of Rep. Act No. 7691, amending BP 129, all civil actions involving title to or possession of real property with an assessed value below P20,000 (or P50,000 in Metro Manila) fall within the exclusive original jurisdiction of the MTC. Since the subject property had an assessed value of only P1,740, the case properly pertained to the MTC, not the RTC.

• Jurisdiction over Expropriation Suits: Whether an action for eminent domain where the assessed value of the property is below P20,000 is within the exclusive original jurisdiction of the Municipal Trial Court or the Regional Trial Court.

• Jurisdiction over Expropriation Suits: An expropriation suit is incapable of pecuniary estimation and falls within the exclusive original jurisdiction of the Regional Trial Court, irrespective of the assessed value of the property.

The test for determining whether an action is capable of pecuniary estimation first ascertains the nature of the principal action or remedy sought. Where the basic issue is something other than the recovery of a sum of money, or the money claim is purely incidental or consequential, the action is considered incapable of pecuniary estimation and is cognizable exclusively by the RTC. An expropriation suit does not involve the recovery of a sum of money; its primary concern is the government’s authority and right to take private property for public use.

Eminent domain proceedings have two phases: the first determines the authority to expropriate and the propriety of its exercise; the second determines just compensation. The primary consideration is compliance with the requisites for taking, making the matter incapable of pecuniary estimation. The determination of just compensation, although expressed in monetary terms, is merely incidental. This doctrine adheres to the earlier ruling in Republic v. Zurbano that condemnation proceedings fall within the jurisdiction of courts of first instance (now the RTC). The 1997 amendments to the Rules of Court did not alter this settled jurisprudential rule.

The RTC’s reliance on the observation of retired Justice Jose Y. Feria—that condemnation is a real action affecting title to or possession of real property—was misplaced; that classification pertained to the nature of actions for purposes of venue and procedural characterization, not to the allocation of jurisdiction. The government does not dispute the landowners’ title or right of possession; it merely asserts its inherent sovereign power to appropriate private property for public benefit. Consequently, the RTC erred in dismissing the complaint.

• Expropriation suit is incapable of pecuniary estimation — An action for eminent domain primarily concerns the sovereign right to take private property for public use, not the recovery of a sum of money. The subsequent determination of just compensation is incidental. Therefore, exclusive original jurisdiction over expropriation suits lies with the Regional Trial Court under Section 19(1) of BP 129, regardless of the assessed value of the property.

• Two-phase nature of eminent domain proceedings — Expropriation entails two distinct stages: (1) determination of the authority of the plaintiff to exercise eminent domain and the propriety of its exercise, culminating in an order of condemnation or dismissal; and (2) determination of just compensation through commissioners. The Court relied on National Power Corporation v. Jocson for this framework.

• Test for pecuniary estimation — To determine if an action is capable of pecuniary estimation, courts ascertain the principal relief sought. If the essential issue is not the recovery of a sum of money, or the monetary claim is purely incidental or consequential, the action is incapable of pecuniary estimation and within the exclusive original jurisdiction of the RTC, as derived from Lapitan v. Scandia, Inc.

• “A review of the jurisprudence of this Court indicates that 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. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, or where the money claim is purely incidental to, or a consequence of, the principal relief sought, like in suits to have the defendant perform his part of the contract (specific performance) and in actions for support, or for annulment of a judgment or to foreclose a mortgage, 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 courts of first instance.” (Quoting Lapitan v. Scandia, Inc., establishing the controlling test.)

• “In the present case, an expropriation suit does not involve the recovery of a sum of money. Rather, it deals with the exercise by the government of its authority and right to take private property for public use.” (Expresses the ratio decidendi that an eminent domain action is not a money claim but an exercise of sovereign power.)

• Lapitan v. Scandia, Inc., 24 SCRA 479 (1968) — Established the test for determining whether a subject matter is capable of pecuniary estimation; relied upon by the Court as the doctrinal framework for resolving the jurisdictional issue.
• National Power Corporation v. Jocson, 206 SCRA 520 (1992) — Defined the two-phase nature of expropriation proceedings; cited to underscore that just compensation is merely the second, incidental phase of the action.
• Republic v. Zurbano, 105 Phil. 409 (1959) — Held under the Judiciary Act of 1948 that condemnation proceedings belong to courts of first instance; applied as controlling precedent that expropriation falls within the jurisdiction of the RTC (successor to the CFI).

• Section 19(1), Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980) — Confers upon the Regional Trial Courts exclusive original jurisdiction over all civil actions in which the subject of the litigation is incapable of pecuniary estimation. Applied to hold that an expropriation suit is within the RTC’s exclusive original jurisdiction.
• Section 3(3), Republic Act No. 7691 — Vests in the Municipal Trial Courts exclusive original jurisdiction over all civil actions involving title to or possession of real property where the assessed value does not exceed P20,000 (or P50,000 in Metro Manila). Interpreted not to apply to expropriation proceedings because the essential subject matter is not title or possession but the exercise of the power of eminent domain, which is incapable of pecuniary estimation.

Justices Jose A.R. Melo, Fidel P. Purisima, and Bernardo P. Gonzaga-Reyes concurred. Justice Jose C. Vitug was abroad on official business.