Alona G. Roldan vs. Spouses Clarence I. Barrios and Anna Lee T. Barrios, et al.

G.R. No. 214803, April 23, 2018; per Peralta, J.

Facts

Petitioner Alona G. Roldan filed an action for foreclosure of real estate mortgage against respondents spouses Clarence I. Barrios and Anna Lee T. Barrios and respondent Romel D. Matorres. The RTC, however, dismissed the complaint.

According to the RTC, it appearing from the complaint that the assessed value of the property mortgaged is only P13,380.00 and the instant case being a real action, the assessed value of the property determines the jurisdiction. The assessed value of the property involved being below P20,000.00, it is the first level court that has jurisdiction over the cases. The MR by petitioner was also denied.

Petitioner filed the instant petition for certiorari alleging grave abuse of discretion committed by the RTC when it ordered the dismissal of her foreclosure case without prejudice and denying her motion for reconsideration.

Issue

Whether or not the RTC committed grave abuse of discretion in dismissing the foreclosure cases filed with it on the ground of lack of jurisdiction.

Ruling

The Supreme Court ruled that it is the first level court which has jurisdiction over the case and not the RTC. The essence of a contract of mortgage indebtedness is that a property has been identified or set apart from the mass of the property of the debtor-mortgagor as security for the payment of money or the fulfillment of an obligation to answer the amount of indebtedness, in case of default in payment. Foreclosure is but a necessary consequence of non-payment of the mortgage indebtedness. In a real estate mortgage when the principal obligation is not paid when due, the mortgagee has the right to foreclose the mortgage and to have the property seized and sold with the view of applying the proceeds to the payment of the obligation.

Therefore, the foreclosure suit is a real action so far as it is against property, and seeks the judicial recognition of a property debt, and an order for the sale of the res. As foreclosure of mortgage is a real action, it is the assessed value of the property which determines the court’s jurisdiction. Considering that the assessed value of the mortgaged property is only P13,380.00, the RTC correctly found that the action falls within the jurisdiction of the first level court.