6-SPS PAJARES v. REMARKABLE LAUNDRY

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2/4/2020 LegRes Lounge: SPS PAJARES v.

REMARKABLE LAUNDRY

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SPS PAJARES v. REMARKABLE LAUNDRY Search Cases

SPOUSES ROMEO PAJARES and IDA T. PAJARES vs. REMARKABLE LAUNDRY AND DRY CLEANING, Search
represented by ARCHEMEDES G. SOLIS
G.R. No. 212690
February 20, 2017
Public Cases
“Breach of contract may give rise to an action for specific performance or rescission of contract.1 It may also be
April
the cause of action in a complaint for damages filed pursuant to Art. 1170 of the Civil Code.2 In the specific
performance and rescission of contract cases, the subject matter is incapable of pecuniary estimation; hence February
jurisdiction belongs to the Regional Trial Court (RTC). In the case for damages, however, the court that has
jurisdiction depends upon the total amount of the damages claimed.” January

June
Facts:
March
Remarkable Laundry and Dry Cleaning filed a Complaint denominated as "Breach of Contract and Damages"
against spouses Romeo and Ida Pajares before the RTC of Cebu City. Respondent alleged that it entered into a
Remarkable Dealer Outlet Contract with petitioners whereby the latter, acting as a dealer outlet, shall accept and
receive items or materials for laundry which are then picked up and processed by the former in its main plant or
laundry outlet; that petitioners violated Article IV (Standard Required Quota & Penalties) of said contract, which
required them to produce at least 200 kilos of laundry items each week, when they ceased dealer outlet
operations on account of lack of personnel; that respondent made written demands upon petitioners for the
payment of penalties imposed and provided for in the contract, but the latter failed to pay; and, that petitioners'
violation constitutes breach of contract. The RTC dismissed the case for lack of jurisdiction.

Respondent filed its Motion for Reconsideration to Court of Appeals. And the CA rendered the assailed Decision
setting aside the Order of the RTC and remanding the case to the court a quo for further proceedings.
Petitioners sought to reconsider, but were denied. Hence, appealed the Petition.

Issue:
Whether or not the CA erred in declaring that the RTC had jurisdiction over respondent's Complaint which,
although denominated as one for breach of contract, is essentially one for simple payment of damages.

Ruling:

The Court grants the Petition. The RTC was correct in categorizing Civil Case as an action for damages seeking
to recover an amount below its jurisdictional limit.

In ruling that respondent's Complaint is incapable of pecuniary estimation and that the RTC has jurisdiction, the
CA comported itself with the following ratiocination: A case for breach of contract [sic] is a cause of action either
for specific performance or rescission of contracts. An action for rescission of contract, as a counterpart of an
action for specific performance, is incapable of pecuniary estimation, and therefore falls under the jurisdiction of
the RTC.

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2/4/2020 LegRes Lounge: SPS PAJARES v. REMARKABLE LAUNDRY
Then in Administrative Circular No. 09-94 this Court declared that "where the claim for damages is the main cause
of action, or one of the causes of action, the amount of such claim shall be considered in determining the
jurisdiction of the court." In other words, where the complaint primarily seeks to recover damages, all claims for
damages should be considered in determining which court has jurisdiction over the subject matter of the case
regardless of whether they arose from a single cause of action or several causes of action.

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