Jurisdiction over Subject matter

[G.R. No. 103200. August 31, 1994.]

LA NAVAL DRUG CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS and WILSON C. YAO,

respondents. SYLLABUS 1. REMEDIAL LAW; REPUBLIC ACT NO. 876; ARBITRATORS, HOW

GOVERNED; CASE AT BAR. Arbitration, in particular, is governed

by a special law, Republic Act 876, suppletory to which are laws and

rules of general application. This case before us concerns the

jurisdiction of courts, in relation to the provisions of Section 6 of

Republic Act No. 876, and, in that respect, the applicability of the

doctrine of estoppel.

2. ID.; CIVIL PROCEDURE; JURISDICTION OVER THE PERSON;

LACK OF; DEFENSE THEREOF, HOW WAIVED. The lack of

jurisdiction over the person of the defendant may be waived either

expressly or impliedly. When a defendant voluntarily appears, he is

deemed to have submitted himself to the jurisdiction of the court. If

he so wishes not to waive this defense, he must do so seasonably by

motion for the purpose of objecting to the jurisdiction of the court;

otherwise, he shall be deemed to have submitted himself to that

jurisdiction. The decisions promulgated heretofore by this Court

would likewise seemingly apply estoppel to bar the defendant from

pursuing that defense by alleging in his answer any other issue for

dismissing the action. 3. ID.; ID.; ID.; ID.; ESTOPPEL; INVOKED ONLY IN HIGHLY

EXCEPTIONAL CASES. The doctrine of estoppel is predicated on,

and has its origin in, equity which, broadly defined, is justice

according to natural law and right. It is a principle intended to avoid

a clear case of injustice. The term is hardly distinguishable from a

waiver of right. Estoppel, like its said counterpart, must be

unequivocal and intentional for, when misapplied, it can easily

become a most convenient and effective means of injustice. Estoppel

is not understood to be a principle that, as a rule, should prevalently

apply but, such as it concededly is, as a mere exception from the

standard legal norms of general application that can be invoked only

in highly exceptional and justifiable cases.

4. ID.; ID.; ID.; ID.; ID.; ASSERTION OF AFFIRMATIVE DEFENSE

ALONG WITH OBJECTION TO COURT'S JURISDICTION OVER THE

PERSON, NOT A CASE OF. The submission of other issues in a

motion to dismiss, or of an affirmative defense (as distinguished from

an affirmative relief) in an answer, would necessarily foreclose, and

have the effect of a waiver of, the right of a defendant to set up the

court's lack of jurisdiction over the person of the defendant. . . . In

the same manner that a plaintiff may assert two or more causes of

action in a court suit, a defendant is likewise expressly allowed,

under Section 2, Rule 8, of the Rules of Court, to put up his own

defenses alternatively or even hypothetically. Indeed, under Section

2, Rule 9, of the Rules of Court, defenses and objections not pleaded

either in a motion to dismiss or in an answer, except for the failure

to state a cause of action, are deemed waived. We take this to mean

that a defendant may, in fact, feel enjoined to set up, along with his

objection to the court's jurisdiction over his person, all other possible

defenses. It thus appears that it is not the invocation of any of such

defenses, but the failure to so raise them, that can result in waiver

or estoppel. By defenses, of course, we refer to the grounds provided

for in Rule 16 of the Rules of Court that must be asserted in a motion

to dismiss or by way of affirmative defenses in an answer. 5. ID.; ID.; JURISDICTION OVER THE SUBJECT MATTER, LACK

OF; EFFECTS THEREOF. Lack of jurisdiction over the subject

matter of the suit is yet another matter. Whenever it appears that the

court has no jurisdiction over the subject matter, the action shall be

dismissed (Section 2, Rule 9, Rules of Court). This defense may be

interposed at any time, during appeal (Roxas vs. Rafferty, 37 Phil.

957) or even after final judgment (Cruzcosa vs. Judge Concepcion, et

al., 101 Phil. 146). Such is understandable, as this kind of

jurisdiction is conferred by law and not within the courts, let alone

the parties, to themselves determine or conveniently set aside.

6. ID.; ID.; JURISDICTION OVER THE NATURE OF THE ACTION,

LACK OF; EFFECTS THEREOF. Lack of jurisdiction over the

nature of the action is the situation that arises when a court, which

ordinarily would have the authority and competence to take a case,

is rendered without it either because a special law has limited the

exercise of its normal jurisdiction on a particular matter or because

the type of action has been reposed by law in certain other courts

or quasi-judicial agencies for determination. Nevertheless, it can

hardly be questioned that the rules relating to the effects of want of

jurisdiction over the subject matter should apply with equal vigor

to cases where the court is similarly bereft of jurisdiction over the

nature of the action. 7. ID.; ID.; ID.; ID.; CASE AT BENCH. In the case at bench, the

want of jurisdiction by the court is indisputable, given the nature of

the controversy. The arbitration law explicitly confines the court's

authority only to pass upon the issue of whether there is or there is

no agreement in writing providing for arbitration. In the affirmative,

the statute ordains that the court shall issue an order "summarily

directing the parties to proceed with the arbitration in accordance

with the terms thereof." If the court, upon the other hand, finds that

no such agreement exists, "the proceeding shall be dismissed." The

proceedings are summary in nature.

8. ID.; ID.; SUMMARY OF RULES RELATING TO EFFECTS OF

WANT OF JURISDICTION BY THE COURT. In summary, it is our considered view, as we now so hereby

express, that (1) Jurisdiction over the person must be seasonably

raised, i.e., that it is pleaded in a motion to dismiss or by way of an

affirmative defense in an answer. Voluntary appearance shall be

deemed a waiver of this defense. The assertion, however, of

affirmative defenses shall not be construed as an estoppel or as a

waiver of such defense. (2) Where the court itself clearly has no

jurisdiction over the subject matter or the nature of the action, the

invocation of this defense may be done at any time. It is neither for

the courts nor the parties to violate or disregard that rule, let alone

to confer that jurisdiction, this matter being legislative in character.

Barring highly meritorious and exceptional circumstances, such as

hereinbefore exemplified, neither estoppel nor waiver shall apply. D E C I S I O N VITUG, J p: In an effort to declog the courts of an increasing volume of work load

and, most importantly, in order to accord contending parties with

expeditious alternatives for settling disputes, the law authorizes,

indeed discourages, out of court settlements or adjudications.

Compromises and arbitration are widely known and used as such

acceptable methods of resolving adversarial claims. Arbitrations, in particular, is governed by a special law, Republic Act

876, suppletory to which are laws and rules of general application.

This case before us concerns the jurisdiction of courts, in relation to

the provisions of Section 6 of Republic Act No. 876, and, in that

respect, the applicability of the doctrine of estoppel. The law (R.A.

876), specifically Section 6 thereof, provides: cdrep

"Sec. 6. Hearing by court. A party aggrieved by the failure, neglect

or refusal of another to perform under an agreement in writing

providing for arbitration may petition the court for an order directing

that such arbitration proceed in the manner provided for in such

agreement. Five days notice in writing of the hearing of such

application shall be served either personally or by registered mail

upon the party in default. The court shall hear the parties, and upon being satisfied

that the making of the agreement or such failure to comply therewith

is not in issue, shall make an order directing the parties to proceed

to arbitration in accordance with the terms of the agreement. If the

making of the agreement or default be in issue the court shall

proceed to summarily hear such issue. If the finding be that no

agreement in writing providing for arbitration was made, or that

there is no default in the proceeding thereunder, the proceeding shall

be dismissed. If the finding be that a written provision for arbitration

was made and there is a default in proceeding thereunder, an order

shall be made summarily directing the parties to proceed with the

arbitration in accordance with the terms thereof. "The court shall decide all motions, petitions or application filed under the provisions of this Act, within ten days after such motions, petitions, or applications have been heard by it." In chronology, the events that have led to the case at bench are detailed in the appealed decision of respondent appellate court, which we here reproduce in toto.

"Original action for Certiorari and Prohibition for Annulment of the

Orders, dated April 26, 1990 and June 22, 1990, respectively, of

Branch LXI, Regional Trial Court, Angeles City, in Special Case No.

6024 for Enforcement of ARBITRATION Agreement with Damages.

Petitioner assails that portion of subject Order of April 26, 1990,

stating as follows: "'(1) Petitioner's claim for damages predicated on alleged tortuous

acts of respondents La Naval Drug corporation such as their alleged

interference and dilatory tactics, etc. in the implementation of the

Arbitration Agreement in the Contract of Lease, thereby compelling

among others the petitioner to go to Court for redress; and

respondent La Naval Drug Corporation's counterclaim for damages

may be entertained by this Court in a hearing - not summary - for

the purpose, under the Rules of Court. '(2) A preliminary hearing of the special and affirmative defense to

show that Petitioner has no cause of action against respondent's

claim for damages is denied; a resolution on this issue deferred

after the trial of the case on the merits.' And challenges the Order of June 22, 1990 denying its motion for reconsideration of the said earlier Order. "From the petition below of respondent Yao, it appears that he is the

present owner of a commercial building a portion of which is leased

to petitioner under a contract of lease executed on December 23,

1983 with the former owner thereof, La Proveedora, Inc., which

contract expired on April 30, 1989. However, petitioner exercised its

option to lease the same building for another five years. But

petitioner and respondent Yao disagreed on the rental rate, and to

resolve the controversy, the latter, thru written notices to the former,

expressed his intention to submit their disagreement to arbitration,

in accordance with Republic Act 876, otherwise known as the

Arbitration Law, and paragraph 7 of their lease contract, providing

that:

"'7. . . . Should the parties fail to agree on the rate of rentals, the same shall be submitted to a group of Arbitrators composed of three (3) members, one to be appointed by LESSOR, another by LESSEE and the third one to be agreed upon by the two arbitrators previously chosen and the parties hereto shall submit to the decision of the arbitrators.' "Thus, on May 6, 1989, respondent Yao appointed Domingo

Alamarez, Jr. as his arbitrator, while on June 5, 1989, petitioner

chose Atty. Casiano Sabile as its arbitrator. The confirmation of the

appointment of Aurelio Tupang, as third arbitrator, was held in

abeyance because petitioner instructed Atty. Sabile to defer the same

until its Board of Directors could convene and approve Tupang's

appointment. Respondent Yao theorizes that this was petitioner's

design to delay the arbitration proceedings, in violation of the

Arbitration Law, and the governing stipulations of their contract of

lease. "On the basis of the aforesaid allegations, respondent Yao prayed

that after summary hearing pursuant to Section 6 of the Arbitration

Law, Atty. Casiano Sabile and Domingo Alamarez be directed to

proceed with the arbitration in accordance with Section 7 of subject

Contract of Lease and the applicable provisions of the Arbitration

Law, by appointing and confirming the appointment of the Third

Arbitrator; and that the Board of Three Arbitrators be ordered to

immediately convene and resolve the controversy before it, pursuant

to Section 12 and the succeeding sections of the Arbitration Law.

(Annex 'A,' Petition.).

"In its Answer with Counterclaim (Annex 'C,' Petition), petitioner here

specifically denied the averments of the petition below; theorizing

that such petition is premature since respondent Yao has not yet

formally required arbitrators Alamarez and Sabile to agree on the

third arbitrator, within ten (10) days from notice, and that the delay

in the arbitration was due to respondent Yao's failure to perform

what is incumbent upon him, of notifying and thereafter, requiring

both arbitrators to appoint the third member of the Board of

Arbitrators. According to petitioner, it actually gave arbitrators

Sabile and Alamarez a free hand in choosing the third arbitrator;

and, therefore, respondent Yao has no cause of action against it

(petitioner). By way of Counterclaim, petitioner alleged that it

suffered actual damages of P100,000.00; and incurred attorney's

fees of P50,000.00, plus P500.00 for every court appearance of its

counsel. "On October 20, 1989, respondent Yao filed an amended petition for

'Enforcement of Arbitration Agreement with Damages;' praying that

petitioner be ordered to pay interest on the unpaid rents, at the

prevailing rate of interest in commercial banks, and exemplary

damages of at least P250,000.00. "On October 24, 1989, despite petitioner's opposition to the motion to admit the amended petition, the respondent court admitted the same. "On October 31, 1989, petitioner answered the amended petition;

contending, among others, that the amended petition should be

dismissed on the ground of non-payment of the requisite filing fees

therefor; and it being in the nature of an ordinary civil action, a full

blown and regular trial is necessary; so that respondent Yao's

proposition for a summary hearing of the arbitration issue and

separate trial for his claim for damages is procedurally untenable

and implausible.

"Invoking Section 5, Rule 16 of the Rules of Court, petitioner

presented a 'Motion to Set Case for Preliminary Hearing' of its

special and affirmative defenses, which are grounds for a motion to

dismiss.

"In its Order of November 14, 1989, the respondent court announced

that the two arbitrators chose Mrs. Eloisa R. Narciso as the third

arbitrator. And on November 21, 1989, it ordered the parties to

submit their position papers on the issue as to whether or not

respondent Yao's claim for damages may be litigated upon in the

summary proceeding for enforcement of arbitration agreement. It

likewise informed the parties that petitioner's 'Motion to Set Case for

Preliminary Hearing' of Special and Affirmative Defenses would be

resolved together with the question of damages. "On April 26, 1990, the aforequoted assailed Order issued. In moving

for reconsideration of the said Order, petitioner argued that in

Special Case No. 6024, the respondent court sits as a special court

exercising limited jurisdiction and is not competent to act on

respondent Yao's claim for damages, which poses an issue litigable

in an ordinary civil action. But the respondent court was not

persuaded by petitioner's submission. On June 22, 1990, it denied

the motion for reconsideration." (Rollo, pp. 89-93).

While the appellate court has agreed with petitioner that, under

Section 6 of Republic Act No. 876, a court, acting within the limits of

its special jurisdiction, may in this case solely determine the issue of

whether the litigants should proceed or not to arbitration, it,

however, considered petitioner in estoppel from questioning the

competence of the court to additionally hear and decide in the

summary proceedings private respondent's claim for damages, it

(petitioner) having itself filed similarly its own counterclaim with the

court a quo. LLphil

It is hardly disputable that when a court is called upon to exercise

limited and special jurisdiction, that court cannot stray to matters

outside the area of its declared authority or beyond what has been

expressly invested by law (Elumbaring vs. Elumbaring, 12 Phil.

384, 387), particularly, such as in this instance, where the

proceedings are summary in nature.

Prefatorily, recalling the distinctions, pertinent to the case, between

the court's lack of jurisdiction over the person of the defendant, on

the one hand, and its lack of jurisdiction over the subject matter or

the nature of the action, upon the other hand, should be useful. The lack of jurisdiction over the person of the defendant may be

waived either expressly or impliedly. When a defendant voluntarily

appears, he is deemed to have submitted himself to the jurisdiction

of the court. If he so wishes not to waive this defense, he must do so

seasonably by motion for the purpose of objecting to the jurisdiction

of the court; otherwise, he shall be deemed to have submitted himself

to that jurisdiction. The decisions promulgated heretofore by this

Court would likewise seemingly apply estoppel to bar the defendant

from pursuing that defense by alleging in his answer any other issue

for dismissing the action. A citation of a few of our decisions might be apropos. In Wang Laboratories, Inc., vs. Mendoza (156 SCRA 44), this Court

has ruled that if the defendant, besides setting up in a motion to

dismiss his objection to the jurisdiction of the court, alleges at the

same time any other ground for dismissing the action, he is

deemed to have submitted himself to the jurisdiction of the court.

In the process, it has equated the matter to a situation where, such

as in Immaculata vs. Judge Navarro, et al. (146 SCRA 5), the

defendant invokes an affirmative relief against his opponent.

In De Midgely vs. Judge Ferandos (64 SCRA 23, 31), the Court elaborated thusly: "We are of the opinion that the lower court has acquired jurisdiction

over the person of Mrs. Midgely by reason of her voluntary

appearance. The reservation in her motion to dismiss that she was

making a special appearance to contest the court's jurisdiction over

her person may be disregarded. "It may be disregarded because it was nullified by the fact that in

her motion to dismiss she relied not only on the ground of lack of

jurisdiction over her person but also on the ground that there was

no showing that earnest efforts were exerted to compromise the

case and because she prayed 'for such other relief as' may be

deemed 'appropriate and proper.' "xxx xxx xxx "When the appearance is by motion for the purpose of objecting to

the jurisdiction of the court over the person, it must be for the sole

and separate purpose of objecting to the jurisdiction of the court. If

his motion is for any other purpose than to object to the jurisdiction

of the court over his person, he thereby submits himself to the

jurisdiction of the court. A special appearance by motion made for

the purpose of objecting to the jurisdiction of the court over the

person will be held to be a general appearance, if the party in said

motion should, for example, ask for a dismissal of the action upon

the further ground that the court had no jurisdiction over the subject

matter. (Syllabus, Flores vs. Zurbito, supra, at page 751. That rule

was followed in Ocampo vs. Mina and Arejola, 41 Phil. 308)." The justification for the rule was expressed in Republic vs. Ker and Company, Ltd. (18 SCRA 207, 213-214), in this wise: llcd "We observe that the motion to dismiss filed on April 14, 1962, aside

from disputing the lower court's jurisdiction over defendant's

person, prayed for dismissal of the complaint on the ground that

plaintiff's cause of action has prescribed. By interposing such

second ground in its motion to dismiss, Ker & Co., Ltd. availed of an

affirmative defense on the basis of which it prayed the court to

resolve controversy in its favor. For the court to validly decide the

said plea of defendant Ker & Co., Ltd., it necessarily had to acquire

jurisdiction upon the latter's person, who, being the proponent of

the affirmative defense, should be deemed to have abandoned its

special appearance and voluntarily submitted itself to the

jurisdiction of the court. "Voluntary appearance cures defects of summons, if any. Such

defect, if any, was further cured when defendant filed its answer to

the complaint. A defendant can not be permitted to speculate upon

the judgment of the court by objecting to the court's jurisdiction

over its person if the judgment is adverse to it, and acceding to

jurisdiction over its person if and when the judgment sustains its

defenses." The doctrine of estoppel is predicated on, and has its origin in, equity

which, broadly defined, is justice according to natural law and right.

It is a principle intended to avoid a clear case of injustice. The term

is hardly distinguishable from a waiver of right. Estoppel, like its

said counterpart, must be unequivocal

and intentional for, when misapplied, it can easily become a most

convenient and effective means of injustice. Estoppel is not

understood to be a principle that, as a rule, should prevalently apply

but, such as it concededly is, as a mere exception from the standard

legal norms of general application that can be invoked only in highly

exceptional and justifiable cases. Tested by the above criteria, the Court sees it propitious to re-

examine specifically the question of whether or not the submission

of other issues in a motion to dismiss, or of an affirmative defense

(as distinguished from an affirmative relief) in an answer, would

necessarily foreclose, and have the effect of a waiver of, the right of

a defendant to set up the court's lack of jurisdiction over the person

of the defendant. LLpr Not inevitably. Section 1, Rule 16, of the Rules of Court, provides that a motion to dismiss may be made on the following grounds: "(a) That the court has no jurisdiction over the person of the defendant or over the subject of the action or suit; "(b) That the court has no jurisdiction over the nature of the action or suit; "(c) The venue is improperly laid; "(d) That the plaintiff has no legal capacity to sue; "(e) That there is another action pending between the same parties for the same cause; "(f) That the cause of action is barred by a prior judgment or by statute of limitations; "(g) That the complaint states no cause of action; "(h) That the claim or demand set forth in the plaintiff's pleading has been paid, waived, abandoned,

or otherwise extinguished; "(i) That the claim on which the action or suit is founded is unenforceable under the provisions of the statute of frauds; "(j) That the suit is between members of the same family and no earnest efforts towards a compromise have been made." Any ground for dismissal in a motion to dismiss, except improper

venue, may, as further set forth in Section 5 of the same rule, be

pleaded as an affirmative defense and a preliminary hearing may be

had thereon as if a motion to dismiss had been filed. An answer itself

contains the negative, as well as affirmative, defenses upon which

the defendant may rely (Section 4, Rule 6, Rules of Court). A negative

defense denies the material facts averred in the complaint essential

to establish the plaintiff's cause of action, while an affirmative

defense is an allegation of a new matter which, while admitting the

material allegations of the complaint, would, nevertheless, prevent

or bar recovery by the plaintiff. Inclusive of

these defenses are those mentioned in Rule 16 of the Rules of Court which would permit the filing of a motion to dismiss. LLphil In the same manner that a plaintiff may assert two or more causes

of action in a court suit, a defendant is likewise expressly allowed,

under Section 2, Rule 8, of the Rules of Court, to put up his own

defenses alternatively or even hypothetically. Indeed, under Section

2, Rule 9, of the Rules of Court, defenses and objections not pleaded

either in a motion to dismiss or in an answer, except for the failure

to state a cause of action, are deemed waived. We take this to mean

that a defendant may, in fact, feel enjoined to set up, along with his

objection to the court's jurisdiction over his person, all other possible

defenses. It thus appears that it is not the invocation of any of such

defenses, but the failure to so raise them, that can result in waiver

or estoppel. By defenses, of course, we refer to the grounds provided

for in Rule 16 of the Rules of Court that must be asserted in a motion

to dismiss or by way of affirmative defenses in an answer. Mindful of the foregoing, in Signetics Corporation vs. Court of Appeals and Freuhauf Electronics Phil., Inc. (225 SCRA 737, 738), we lately ruled: "This is not to say, however, that the petitioner's right to question the

jurisdiction of the court over its person is now to be deemed a

foreclosed matter. If it is true, as Signetics claims, that its only

involvement in the Philippines was through a passive investment in

Sigfil, which it even later disposed of, and that TEAM Pacific is not

its agent, then it cannot really be said to be doing business in the

Philippines. It is a defense, however, that requires the contravention

of the allegations of the complaint, as well as a full ventilation, in

effect, of the main merits of the case, which should not thus be within

the province of a mere motion to dismiss. So, also, the issue posed

by the petitioner as to whether a foreign corporation which has done

business in the country, but which has ceased to do business at the

time of the filing of a complaint, can still be made to answer for a

cause of action which accrued while it was doing business, is another

matter that would yet have to await the reception and admission of

evidence. Since these points have seasonably been raised by the

petitioner, there should be no real cause for what may

understandably be its apprehension, i.e., that by its participation

during the trial on the merits, it may, absent an invocation of

separate or independent reliefs of its own, be considered to have

voluntarily submitted itself to the court's jurisdiction." Lack of jurisdiction over the subject matter of the suit is yet another

matter. Whenever it appears that the court has no jurisdiction over

the subject matter, the action shall be dismissed (Section 2, Rule

9, Rules of Court). This defense may be interposed at any time,

during appeal (Roxas vs. Rafferty, 37 Phil. 957) or even after final

judgment (Cruzcosa vs. Judge Concepcion, et al., 101 Phil. 146).

Such is understandable, as this kind of jurisdiction is conferred by

law and not within the courts, let alone the parties, to themselves

determine or conveniently set aside. In People vs. Casiano (111 Phil.

73, 93-94), this Court, on the issue of estoppel, held: LibLex "The operation of the principle of estoppel on the question of

jurisdiction seemingly depends upon whether the lower court

actually 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, on appeal, from

assailing 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' (5 C.J.S., 861-863). However, if the lower court had jurisdiction, and the case was heard

and decided upon a given theory, such, for instance, as that the

court had no jurisdiction, the party who induced it to adopt such

theory will not be permitted, on appeal, to assume an inconsistent

position that the lower court had jurisdiction. Here, the principle

of estoppel applies. The rule that jurisdiction is conferred by law,

and does not depend upon the will of the parties, has no bearing

thereon." The rule was reiterated in Calimlim vs. Ramirez (118 SCRA 399,

406), and quite recently, in Southeast Asian Fisheries Development

Center-Aquaculture Department vs. National Labor Relations

Commission (206 SCRA 283). Jurisdiction over the nature of the action, in concept, differs from

jurisdiction over the subject matter. Illustrated, lack of jurisdiction

over the nature of the action is the situation that arises when a court,

which ordinarily would have the authority and competence to take a

case, is rendered without it either because a special law has limited

the exercise of its normal jurisdiction on a particular matter or

because the type of action has been reposed by law in certain other

courts or quasi-judicial agencies for determination. Nevertheless, it

can hardly be questioned that the rules relating to the effects of want

of jurisdiction over the subject matter should apply with equal vigor

to cases where the court is similarly bereft of jurisdiction over the

nature of the action. LibLex In summary, it is our considered view, as we now so hereby express, that (1) Jurisdiction over the person must be seasonably raised, i.e.,

that it is pleaded in a motion to dismiss or by way of an affirmative

defense in an answer. Voluntary appearance shall be deemed a

waiver of this defense. The assertion, however, of affirmative

defenses shall not be construed as an estoppel or as a waiver of

such defense. (2) Where the court itself clearly has no jurisdiction over the

subject matter or the nature of the action, the invocation of this

defense may be done at any time. It is neither for the courts nor the

parties to violate or disregard that rule, let alone to confer that

jurisdiction, this matter being legislative in character. Barring highly

meritorious and exceptional circumstances, such as hereinbefore

exemplified, neither estoppel nor waiver shall apply. In the case at bench, the want of jurisdiction by the court is

indisputable, given the nature of the controversy. The arbitration

law explicitly confines the court's authority only to pass upon the

issue of whether there is or there is no agreement in writing

providing for arbitration. In the affirmative, the statute ordains that

the court shall issue an order "summarily directing the parties to

proceed with the arbitration in accordance with the terms thereof."

If the court, upon the other hand, finds that no such agreement

exists, "the proceeding shall be dismissed." The proceedings are

summary in nature. All considered, the court a quo must then refrain from taking up the claims of the contending parties for damages, which, upon the other hand, may be ventilated in separate regular proceedings at an

opportune time and venue. The circumstances obtaining in this case are far, we hold, from justifying the application of estoppel against either party. cdll WHEREFORE, the decision of the Court of Appeals and the orders

of the trial court in question are SET ASIDE. The court a quo, in

the instant proceedings, is ordered to DESIST from further hearing

private respondent's claim, as well as petitioner's counterclaim, for

damages. No costs. SO ORDERED. FIRST DIVISION [G.R. No. 47517. June 27, 1941.] IDONAH SLADE PERKINS, petitioner, vs. MAMERTO ROXAS, ET AL., respondents. Alva J. Hill for petitioner. DeWitt, Perkins & Ponce Enrile for respondent Judge and respondent Perkins. Ross, Lawrence, Selph & Carrascoso, Jr., for respondent Benguet Consolidated Mining Co. SYLLABUS 1. COURTS; MEANING OF JURISDICTION OVER SUBJECT

MATTER; ADJUDICATION OF TITLE TO CERTAIN SHARES OF

STOCK. By jurisdiction over the subject matter is meant the

nature of the cause of action and of the relief sought, and this is

conferred by the sovereign authority which organizes the court, and

is to be sought for in the general nature of its power, or in authority

specially conferred. The respondent's action calls for the

adjudication of title to certain shares of stock of the Benguet

Consolidated Mining Company, and the granting of affirmative

reliefs, which fall within the general jurisdiction of the Court of First

Instance of Manila. (Vide sec. 146, et seq., Adm. Code, as amended

by Comm. Act No. 145; sec 56, Act No. 136, as amended by Act No.

400.) 2. ID.; ID.; CROSS-COMPLAINT. I. S. P. in her cross-complaint

brought suit against E. A. P. and the Benguet Consolidated Mining

Company upon the alleged judgment of the Supreme Court of the

State of New York and asked the court below to render judgment

enforcing that New York judgment, and to issue execution thereon.

This is a form of action recognized by section 309 of the Code of Civil

Procedure (now section 47, Rule 39, Rules of Court) and which falls

within the general jurisdiction of the Court of First Instance of

Manila, to adjudicate, settle and determine. 3. ID.; ID.; ID.; Whether or not the respondent judge in the

course of the proceedings will give validity and efficacy to the New

York judgment set up by the petitioner in her cross-complaint is a

question that goes to the merits of the controversy and relates to the

rights of the parties as between each other, and not to the

jurisdiction or power of the court. The test of jurisdiction is whether

or not the tribunal has power to enter upon the inquiry, no whether

its conclusion in the course of it is right or wrong. If its decision is

erroneous, its judgment can be reversed on appeal; but its

determination of the

question, which the petitioner here anticipates and seeks to prevent, is the exercise by the court and the rightful exercise of its jurisdiction. D E C I S I O N LAUREL, J p: On July 5, 1938, the respondent, Eugene Arthur Perkins, filed a

complaint in the Court of First Instance of Manila against the

Benguet Consolidated Mining Company for the recovery of the sum

of P71,379.90, consisting of dividends which have been declared and

made payable on 52,874 shares of stock registered in his name,

payment of which was being withheld by the company, and for the

recognition of his right to the control and disposal of said shares, to

the exclusion of all others. To the complaint, the company filed its

answer, alleging, by way of defense, that the withholding of plaintiff's

right to the disposal and control of the shares was due to certain

demands made with respect to said shares by the petitioner herein,

Idonah Slade Perkins, and by one George H. Engelhard. The answer

prays that the adverse claimants be made parties to the action and

served with notice thereof by publication, and that thereafter all such

parties be required to interplead and settle the rights among

themselves. On September 5, 1938, the trial court ordered the respondent,

Eugene Arthur Perkins, to include in his complaint as parties

defendants petitioner, Idonah Slade Perkins, and George H.

Engelhard. The complaint was accordingly amended and in addition

to the relief prayed for in the original complaint, respondent Perkins

prayed that petitioner Idonah Slade Perkins and George H.

Engelhard be adjudged without interest in the shares of stock in

question and excluded from any claim they assert thereon.

Thereafter, summons by publication were served upon the non-

resident defendants, Idonah Slade Perkins and George H. Engelhard,

pursuant to the order of the trial court. On December 9, 1938,

Engelhard filed his answer to the amended complaint, and on

January 8, 1940, petitioner's objection to the court's jurisdiction over

her person having been overruled by the trial court and by this court

in G. R. No. 46831, petitioner filed her answer with a cross-complaint

in which she sets up a judgment allegedly obtained by her against

respondent, Eugene Arthur Perkins, from the Supreme Court of the

State of the New York, wherein it is declared that she is the sole legal

owner and entitled to the possession and control of the shares of

stock in question together with all the cash dividends declared

thereon by the Benguet Consolidated Mining Company, and prays

for various affirmative reliefs against the respondent. To the answer

and cross-complaint thus filed, the respondent, Eugene Arthur

Perkins, filed a reply and an answer in which he sets up several

defenses to the enforcement in this jurisdiction of the judgment of

the Supreme Court of the State of New York above alluded to. Instead

of demurring to the reply on either of the two grounds specified in

section 100 of the Code of Civil Procedure, petitioner, Idonah Slade

Perkins, on June 5, 1940, filed a demurrer thereto on the ground

that "the court has no jurisdiction of the subject of the action,"

because the alleged judgment of the Supreme Court of the State of

New York is res judicata. Petitioner's demurrer having been overruled, she now filed in this

court a petition entitled "Certiorari, Prohibition and Mandamus,"

alleging that "the respondent judge is about to and will render

judgment in the above-mentioned case disregarding the

constitutional rights of this petitioner; contrary to and

annulling the final, subsisting, valid judgment rendered and entered

in this petitioner's favor by the courts of the State of New York, . . .

which decision is res judicata on all the questions constituting the

subject matter of civil case No. 53317, of the Court of First Instance

of Manila; and which New York judgment the Court of First Instance

of Manila is without jurisdiction of annul, amend, reverse, or modify

in any respect whatsoever"; and praying that the order of the

respondent judge overruling the demurrer be annulled, and that he

and his successors be permanently prohibited from taking any

action on the case, except to dismiss the same. The only question here to be determined, therefore, is whether or not,

in view of the alleged judgment entered in favor of the petitioner by

the Supreme Court of New York, and which is claimed by her to be

res judicata on all questions raised by the respondent, Eugene Arthur

Perkins, in civil case No. 53317 of the Court of First Instance of

Manila, the local court has jurisdiction over the subject matter of the

action in the said case. By jurisdiction over the subject matter is

meant the nature of the cause of action and of the relief sought, and

this is conferred by the sovereign authority which organizes the

court, and is to be sought for in general nature of its powers, or in

authority specially conferred. In the present case, the amended

complaint filed by the respondent, Eugene Arthur Perkins, in the

court below alleged the ownership in himself of the shares of stock

involved in this action as manager of the conjugal partnership

between him and his wife, Idonah Slade Perkins; that the petitioner,

Idonah Slade Perkins; that such claims are invalid, unfounded, and

made only for the purpose of vexing, hindering and delaying Eugene

Arthur Perkins in the exercise of the lawful control over and use of

said amended complaint prays, inter alia, "that defendant Benguet

Consolidated Mining Company be required and ordered to recognize

the right of the plaintiff to the control and disposal of said shares so

standing in his name to the exclusion of all others; that the additional

defendants, Idonah Slade Perkins and George H. Engelhard, be each

held to have no interest or claim in the subject matter of the

controversy between plaintiff and defendant Benguet Consolidated

Mining Company, or in or under the judgment to be rendered herein

and that by the said judgment they, and each of them be excluded

therefrom; and that the plaintiff be awarded the costs of this suit and

general relief." The respondent's action, therefore, calls for the

adjudication of title to certain shares of stock of the Benguet

Consolidated Mining Company, and the granting of affirmative

reliefs, which fall within the general jurisdiction of the Court of First

Instance of Manila. (Vide: sec. 146, et seq., Adm. Code, as amended

by Commonwealth Act No. 145; sec. 56, Act No. 136, as amended by

Act No. 400.) Similarly, the Court of First Instance of Manila is empowered to

adjudicate the several demands contained in petitioner's cross-

complaint. The cross-complaint sets up a judgment allegedly

recovered by Idonah Slade Perkins against Eugene Arthur Perkins

in the Supreme Court of New York and by way of relief prays: "(1) Judgment against the plaintiff Eugene Arthur Perkins in the sum of one hundred eighty-five thousand and four hundred dollars ($185,400), representing cash dividend of March 30, 1937. "(2) That plaintiff Eugene Arthur Perkins be required to deliver to

this defendant the certificates representing the 48,000 shares of

capital stock of Benguet Consolidated Mining Co. issued as a stock

dividend on the 24,000 shares owned by this defendant as

described in the judgment Exhibit 1-A.

"(3) That this defendant recover under that judgment Exhibit

1-A interest upon the amount of each cash dividend referred

to in that judgment received by plaintiff Eugene Arthur Perkins

from February, 1930, to and including the dividend of March

30, 1937, from the date of payment of each of such dividends

at the rate of 7 per cent per annum until paid. "(4) That this defendant recover of plaintiff her costs and

disbursements in that New York action amounting to the sum

of one thousand five hundred eighty-four and 20/000 dollars

($1,584.00), and the further sum of two thousand dollars

($2,000) granted her in that judgment Exhibit 1-A as an extra

allowance, together with interest. "(5) For an order directing an execution to be issued in favor of

this defendant and against the plaintiff for amounts sufficient

to satisfy the New York judgment Exhibit 1-A in its entirety,

and against the plaintiff and the defendant Benguet

Consolidated Mining Co. for such other amounts prayed for

herein as this court may find to be due and payable by each of

them; and ordering them to comply with all other orders which

this court may issue in favor of the defendant in this case. "(6) For the costs of this action, and "(7) For such other relief as may be appropriate and proper in the premises." In other words, Idonah Slade Perkins in her cross-complaint

brought suit against Eugene Arthur perkins and the Benguet

Consolidated Mining Company upon the alleged judgment of

the Supreme Court of the State of New York and asked the court

below to render judgment enforcing that New York judgment,

and to issue execution thereon. This is a form of action

recognized by section 309 of the Code of Civil Procedure (now

section 47, Rule 39, Rules of Court) and which falls within the

general jurisdiction of the Court of First Instance of Manila, to

adjudicate, settle and determine. The petitioner expresses the fear that the respondent judge may

render judgment "annulling the final, subsisting, valid

judgment rendered and entered in this petitioner's favor by the

courts of the State of New York, . . . which decision is res

judicata on all the questions constituting the subject matter of

civil case No. 53317," and argues on the assumption that the

respondent judge is without jurisdiction to take cognizance of

the cause. Whether or not the respondent judge in the course

of the proceedings will give validity and efficacy to the New York

judgment set up by the petitioner in her cross-complaint is a

question that goes to the merits of the controversy and relates

to the rights of the parties as between each other, and not to the

jurisdiction or power of the court. The test of jurisdiction is

whether or not the tribunal has power to enter upon the inquiry,

not whether its conclusion in the course of it is right or wrong.

If its decision is erroneous, its judgment can be reversed on

appeal; but its determination of the question, which the

petitioner here anticipates and seeks to prevent, is the exercise

by that court and the rightful exercise of its jurisdiction. The petition is, therefore, hereby denied, with costs against the petitioner. So ordered. Avancea, C. J., Diaz, Moran and Horrilleno, JJ., concur.

73 Phil 484 Emilio Reyes vs Apolonio Diaz

This case is certified to this Court by the Court of Appeals upon the ground that the jurisdiction of the trial court is in issue. The supposed questions of jurisdiction are, first, whether or not there is sufficient evidence to show that the protestant has duly filed his certificate of candidacy, and second, whether the trial court has or has no authority to pass upon the validity of the ballots adjudicated to the protestant which have not been challenged by the protestee in his counter-protest. Article VIII, section 2, No. 3, of the Constitution confers upon the Supreme Court jurisdiction over all cases in which the jurisdiction of any trial court is in issue. Section 138, No. 3, of the Revised Administrative Code as amended by Commonwealth Acts Nos. 3 and 259, provides that the Supreme Court shall have appellate jurisdiction over all cases in which the jurisdiction of any inferior court is in issue. It has been held that the word jurisdiction as used in the constitutions and in the statutes means jurisdiction as to the subject-matter only, unless an exception arises by reason of its employment in a broader sense. (15 C. J. 735; Johnson vs. Wells, 91 Fed. 1; U. S. vs. Lee, 84 Fed. 626; Vinal vs. Continental Constr., etc. Co., 34 Fed. 228; Starnes vs. Mutual Loan etc., Co., 102 Ga. 597; 29 SE 452.) There is in our Constitution or in the law aforecited nothing which may lend the word jurisdiction therein used a broader meaning than jurisdiction over the subject-matter. On the contrary, having due regard to the manifest purpose of the law, which is to confine the appellate jurisdiction of this Court to cases of vital importance involving questions of fundamental character, such, for instance, as the question of validity of statute, treaty or ordinance, or the legality of any tax, import or assessment which may affect the very existence of the government, or criminal cases wherein life imprisonment or death penalty is imposed, we are of the opinion, and so hold, that the issue of jurisdiction which confers appellate powers

upon this Court in a given case is not such question as is dependent exclusively upon minor matters of fact or upon a mere construction of the pleadings, but that which has reference to the more important question of jurisdiction of the trial court over the subject-matter as determined by law Jurisdiction over the subject-matter is the power to hear and determine cases of the general class to which the proceedings in question belong (C. J. S., p. 36) and is conferred by the sovereign authority which organizes the court and defines its powers (Banco Espaol Filipino vs. Palanca, 37 Phil. 921; Perkins vs. Dizon, 40 Off. Gaz. No. 7, 3d Sup. p. 216; Ng Si Chok vs. Vera, G. R. No. 45674). The question, therefore, of whether a court has jurisdiction over the subject-matter, calls for interpretation and application of the law of jurisdiction which distributes the judicial power among the different courts in the Philippines, and since the ruling on the matter is of far-reaching consequences, affecting, as it may, the very life and structure of our judicial system, the law has deemed it wise to place the power and authority to act thereon in the highest court of the land. In the instant case, there is no such question of jurisdiction as above described. Both parties agree that if the due filing of the protestants certificate of candidacy is proven, the trial court has jurisdiction, but that if such fact is not proven the trial court has no jurisdiction except to dismiss the case. There is, therefore, no question between the parties as to what the jurisdiction of the trial court is according to law in either case. The real question between them is one of fact whether or not the protestants certificate of candidacy has been duly filed. And not until this fact is proved can the question of jurisdiction be determined.

Neither is the second question one of jurisdiction within the purview of the legal provisions above quoted. Whether certain ballots are or are not pertinent to the issue raised in the pleadings, is merely a question of relevancy of evidence. It may be true that the court by an erroneous ruling on such question may encroach upon issues completely foreign to those defined in the pleadings, but in such case the question of jurisdiction that may arise would not be one of jurisdiction over the subject-matter but of jurisdiction over the issue. In order that a court may validly try and decide a case, it must have jurisdiction over the subject-matter and jurisdiction over the persons of the parties. (Banco Espaol Filipino vs. Palanca, 37 Phil. 921; Perkins vs. Dizon, 40 Off. Gaz. No. 7, 3d Sup. p. 216.) But in some instances it is said that the court should also have jurisdiction over the issue (15 C. J. 734; Hutts vs. Martin, 134 Ind. 587, 33 N.E. 676), meaning thereby that the issue being tried and decided by the court be within the issues raised in the pleadings. But this kind of jurisdiction should be distinguished from jurisdiction over the subject-matter, the latter being conferred by law and the former by the pleadings. Jurisdiction over the issue, unlike jurisdiction over the subject-matter, may be conferred by consent either express or implied of the parties. (Rule 17, sec. 4, Rules of Court.) Although an issue is not duly pleaded it may validly be tried and decided if no timely objection is made thereto by the parties. This cannot be done when jurisdiction over the subject-matter is involved. In truth, jurisdiction over the issue is an expression of a principle that is involved in jurisdiction over the persons of the parties. Where, for instance, an issue is not duly pleaded in the complaint, the defendant cannot be said to have been served with process as to that issue. (Cf. Atkins etc. Co. vs. Domingo, 44 Phil. 680). At any rate, whether or not the court has jurisdiction over a specific issue is a question that requires nothing except an examination of the pleadings, and this function is without such importance as to call for the intervention of this Court.

Furthermore, this question of jurisdiction is unsubstantial. It is a well-settled rule that the institution of suffrage is of public, not private, interest, and the court may examine all the ballots after the ballot boxes are opened in order to determine which are legal and which are illegal, even though neither of the parties raised any question as to their illegality. (Yalung vs. Atienza, 52 Phil. 781; Cecilio vs. Tomacruz, 62 Phil. 689; Cosculluela vs. Gaston, 63 Phil. 41). WHEREFORE, this case is hereby remanded to the Court of Appeals for further proceedings. Avancea, C.J., Abad Santos, Diaz, Horrilleno and Ozaeta, JJ., concur. Laurel, J., concurs in the result.