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Loan Collection and Jurisdiction Case

Lender provided three separate loans to Borrower totaling P500,000. Borrower defaulted on repaying the loans. Lender filed a collection suit against Borrower in the Regional Trial Court of Manila for the total P500,000 owed. At trial, it was revealed that two of the loans had been repaid, leaving only P300,000 still due. Borrower argued the court lacked jurisdiction since only P300,000 was now claimed, which falls under the Metropolitan Trial Court's exclusive jurisdiction. However, jurisdiction is determined by the amount claimed in the complaint, not the amount proven, so the Regional Trial Court correctly retained jurisdiction over the case.

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204 views1 page

Loan Collection and Jurisdiction Case

Lender provided three separate loans to Borrower totaling P500,000. Borrower defaulted on repaying the loans. Lender filed a collection suit against Borrower in the Regional Trial Court of Manila for the total P500,000 owed. At trial, it was revealed that two of the loans had been repaid, leaving only P300,000 still due. Borrower argued the court lacked jurisdiction since only P300,000 was now claimed, which falls under the Metropolitan Trial Court's exclusive jurisdiction. However, jurisdiction is determined by the amount claimed in the complaint, not the amount proven, so the Regional Trial Court correctly retained jurisdiction over the case.

Uploaded by

ilmioangelo
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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I. Lender extended to Borrower a P100,000.00 loan covered by a promissory note.

Later, Borrower
obtained another P100,000.00 loan again covered by a promissory note. Still later, Borrower obtained a
P300,000.00 loan secured by a real estate mortgage on his land valued at P500,000.00. Borrower
defaulted on his payments when the loans matured. Despite demand to pay the P500,000.00 loan,
Borrower refused to pay. Lender, applying the totality rule, filed against Borrower with the Regional Trial
Court (RTC) of Manila, a collection suit for P500,000.00.

a.) Did Lender correctly apply the totality rule and the rule on joinder of causes of action? (2%)

b.) At the trial, Borrower's lawyer, while cross-examining Lender, successfully elicited an admission from
the latter that the two promissory notes have been paid. Thereafter, Borrower's lawyer filed a motion to
dismiss the case on the ground that as proven only P300,000.00 was the amount due to Lender and which
claim is within the exclusive original jurisdiction of the Metropolitan Trial Court. He further argued that
lack of jurisdiction over the subject matter can be raised at any stage of the proceedings. b.) Should the
court dismiss the case? (3%)

ANSWERS:

a) Yes Lender correctly applied the totality rule and the rule on joinder of causes of action.

Under the rule on joinder of causes of action, a party may in one pleading assert as many causes of action
as he may have against an opposing party. Under the totality rule, where the claims in all the causes of
action are principally for recovery of money, the aggregate amount claimed shall be the test of
jurisdiction.

Here the causes of action by Lender are all against borrower and all the claims are principally for recovery
of money.

Hence the aggregate amount claimed, which is P500,000 shall be the test of jurisdiction and thus it is the
RTC of Manila which has jurisdiction.

Although the rules on joinder of causes of action state that the joinder shall not include special civil
actions, the remedy resorted to with respect to the third loan was not foreclosure but collection. Hence
joinder of causes of action would still be proper.

b) No, the court should not dismiss the case.

The Supreme Court has held that subject-matter jurisdiction is determined by the amount of the claim
alleged in the complaint and not the amount substantiated during the trial. (Dionisio v Sioson Puerto, 31
October 1974).

Here the amount claimed was P500,000. Even if the claim substantiated during the trial was only P300,000
that is not determinative of subject-matter jurisdiction.

Hence the argument that lack of subject-matter jurisdiction can be raised at any time is misplaced since
in the first place the RTC has jurisdiction.

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