G.R. No. 234446 VICTORIA MANUFACTURING CORPORATION EMPLOYEES UNION, PETITIONER, v. VICTORIA MANUFACTURING CORPORATION, RESPONDENT, July 24, 2019 Facts: VMC domestic corporation engaged in the textile business. Aside from dyeing and finishing fabrics, it manufactures laces, embroidered and knitted fabrics, and hooks and eyes. On the other hand, VMCEU is the sole and exclusive bargaining agent of the permanent and regular rank-and-file employees within the pertinent bargaining unit of VMC. Through a letter dated March 14, 2014, VMC sought the opinion of the Bureau of Internal Revenue (BIR) on the tax implications of the wage structure that was stipulated in the collective bargaining agreement (CBA) between the company and VMCEU. At the time, the applicable minimum wage was P466.00, broken down into a basic wage of P451.00 and a cost of living allowance (COLA) of P15.00, as mandated by Wage Order No. NCR-18. This was different from the company's wage structure, which integrated the COLA it to the total wage it paid VMCEU's member. In response to VCM's letter, the BIR opined that VMCEU's members were not exempt from income tax, as what they were earning was above the statutory minimum wage mandated by Wage Order No. NCR-18. As a result, VMC withheld the income tax due on the wages of VMCEU's members. On May 8, 2015, VMC and VMCEU held a grievance meeting to settle various issues, including the company's decision to withhold income tax from the wages of the union members who were earning the statutory minimum wage. Unfortunately, the parties failed to resolve the issue. On May 26, 2016, the Voluntary Arbitrator (VA) rendered a Decision in favor of VMCEU, ruling that VMC erroneously withheld income tax from the wages of the union's members. Ratiocinating that the subject employees were statutory minimum wage earners, it was held that they were exempt from the payment of income tax, pursuant to Republic Act (R.A.) No. 9504. Aggrieved, VMC sought relief before the CA through a petition for certiorari. On May 26, 2017, the CA rendered the challenged Decision, reversing the VA's ruling. The appellate court, after brushing aside VMC's resort to the wrong remedy, held that the jurisdiction of VAs is limited to labor disputes. As such, the VA could not validly rule on the propriety of VMC's decision to withhold the income taxes of VMCEU's members, a matter properly within the competence of the BIR. Issue Whether or not the CA correctly set aside the VA’s decision on the ground of lack of jurisdiction. Ruling: Yes, the CA is correct. Jurisdiction is the power of a court, tribunal, or officer to hear, try, and decide a case. The seminal ponencia in El Banco Español-Filipino v. Palanca, instructs that a court, in order to validly try a civil case, must be possessed of two types of jurisdiction: (1) jurisdiction over the subject matter; and (2) jurisdiction over the parties. Relevant to the resolution of the issue raised in this case is the first, which, broadly defined, is "the power to hear and determine the general class to which the proceedings in question belong" or, in the words of Palanca, "the authority of the court to entertain a particular kind of action or to administer a particular kind of relief. Emanating from the sovereign authority that organizes courts, jurisdiction over the subject matter is conferred by law. It is determined by the allegations in the complaint based on the character of the relief sought. Verily, if the relief sought is the payment of a certain sum of money, the complaint must be filed before the court on which the law bestows the power to grant money judgments of that amount. If the complaint is filed before any other court, the only power that court has is to dismiss the case. It is axiomatic that a judgment rendered by a court without jurisdiction over the subject matter produces no legal effect. The above principles apply analogously to administrative boards and officers exercising quasi-judicial power, such as VAs constituted under the Labor Code. The Labor Code vests VA the original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement, those arising from the interpretation or enforcement of company personnel policies and all other labor disputes including unfair labor practices and bargaining deadlocks. The jurisdiction of VAs is limited to labor disputes. Hence, VA could not validly rule on the propriety of VMC's decision to withhold the income taxes of VMCEU's members. G.R. No. 204970 SPOUSES CLAUDIO and CARMENCITA TRAYVILLA, Petitioners vs. BERNARDO SEJAS and JUVY PAGLINAWAN, represented by JESSIE PAGLINAWAN, Respondents FACTS: In 2005, Petitioners Claudio and Carmencita Trayvilla instituted before the RTC Civil Case No. 4633-2K5 against respondent Bernardo Sejas (Sejas). In their Complaint for specific performance ad damages, petitioners claimed among others that Sejas was the registered owner of a 434-square meter parcel of land in Tukuran, Zamboanga del Sur covered by Transfer Certificate of Title No. T-8,3377 (TCT T-8,337); that by virtue of a private handwritten document, Sejas sold said parcel of land to them in 1982; that thereafter, they took possession of the land and constructed a house thereon; that they resided in said house and continued to reside therein; that Sejas later reasserted his ownership over said land and was thus guilty of fraud and deceit in so doing; and that they caused the annotation of an adverse claim. They prayed that Sejas be ordered to execute a final deed of sale over the property and transfer the same to them, and that they be awarded the sum of P30,000.00 as attorney’s fees plus P1,500.00 per court appearance of counsel. In an Amended Complaint, this time for specific performance, reconveyance, and damages, petitioners impleaded respondent Juvy Paglinawan (Paglinawan) as additional defendant, claiming that Sejas subsequently sold the subject property to her, after which she caused the cancellation of TCT T-8,337 and the issuance of a new title – TCT T-46,627 – in her name. Petitioners prayed that Sejas be ordered to execute a final deed of sale in their favor and transfer the property to them; that Paglinawan’s TCT T-6,627 be canceled and the property be reconveyed to them; and that they be awarded P50,000.00 in moral damages, in addition to the P30,000.00 attorney’s fees and P1,500.00 per court appearance of counsel originally prayed for in the Complaint. However, the additional docket fees for the moral damages prayed for in the Amended Complaint were not paid. Likewise, for the additional causes of action, no docket fees were charged and paid. Respondents moved for dismissal of the case, claiming lack of jurisdiction over the subject matter. The RTC denied the motion in a September 3, 2007 order. Respondents filed a Motion for Reconsideration, arguing that petitioners’ case was not for specific performance but was in reality a real action or one involving title to and possession of real property, in which case the value of the property should be alleged in the complaint in order that the proper filing fee may be computed and paid; that since the value of the land was not alleged in the Amended Complaint, the proper filing fee was not paid, and for this reason the case should be dismissed. ISSUE: Whether or not the CA ruled correctly when it dismissed the complaint by reason of alleged non-payment of the correct dockets fees due to its failure to alleged the fair market value or the stated value of the subject property in the amended complaint. RULING: Yes, the CA is correct. Consistent with Section 1, Rule 141 of the Revised Rules of Court which provides that the prescribed fees shall be paid in full "upon the filing of the pleading or other application which initiates an action or proceeding", the wellentrenched rule is to the effect that a court acquires jurisdiction over a case only upon the payment of the prescribed filing and docket fees. Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC, which became effective on 16 August 2004, the paragraph in Section 7, Rule 141 of the Rules of Court, pertaining specifically to the basis for the computation of docket fees for real actions was deleted. Instead, Section 7(1) of Rule 141, as amended, provides that ‘in cases involving real property, the FAIR MARKET value of the REAL property in litigation STATED IN THE CURRENT TAX DECLARATION OR CURRENT ZONAL VALUATION OF THE BUREAU OF INTERNAL REVENUE, WHICH IS HIGHER, OR IF THERE IS NONE, THE STATED VALUE OF THE PROPERTY IN LITIGATION shall be the basis for the computation of the docket fees Unfortunately, private respondents never alleged in their Amended Complaint, much less in the prayer portion thereof, the fair market value of the subject res as stated in the Tax Declaration or current zonal valuation of the Bureau of Internal Revenue, which is higher, or if there is none, the stated value thereof, to serve as basis for the receiving clerk in computing and arriving at the proper amount of filing fee due thereon. In the absence of such allegation, it cannot be determined whether the RTC or the MTC has original and exclusive jurisdiction over the petitioners’ action. There is therefore no showing on the face of the complaint that the RTC has exclusive jurisdiction over the action of the private respondents. The RTC never acquired jurisdiction, hence, its act of taking cognizance of the subject Complaint was tainted with grave abuse of discretion amounting to lack or excess of jurisdiction. Grave abuse of discretion is defined as capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction.
