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G.R. No. 180394 September 29, 2008 MARJORIE B. CADIMAS, by er Attor!ey"I!"#$%t, &ENANCIO '. ROSA(ES, vs. MARI)ES CARRION $!* GEMMA + GO, Respondents. D E C I S I O N )INGA, J.: This is a petition for review on certiorar i 1 under Rule 45 of the 1! Rules of Civil "rocedure# assailin$ the Decision % and Resolution & of the Court of 'ppeals in C'().R. S" No. *5!%. The appellate court set aside two orders 4 of the Re$ional Trial Court +RTC,# -ranch *5# ue/on Cit0 issued in Civil Case No. ( 4(5&5*1 on the $round that the trial court had no 2urisdiction over the case. The instant petition ste33ed fro3 the co3plaint 5 for accion reivindicatoria and da3a$es filed 0 petitioner ar2orie -. Cadi3as# throu$h h attorne0(in(fact# 6enancio 7. Rosales# a$ainst respondents arites Carrion and )e33a 8u$o. The co3plaint was doc9eted as Civil Ca No. ( 4(5&5*1 and raffled to -ranch *5 of the RTC of ue/on Cit0. In the co3plaint# petitioner averred that she and respondent Carrion were parties to a Contract To Sell dated 4 'u$ust % &# whe petitioner sold to respondent Carrion a town house located at :ot 4(;(1(1% No. %& 'ster Street# <est ;airview "ar9 Su division# for the su3 of "&& # . to e paid in install3ents. 'ccordin$ to petitioner# Carrion had violated para$raph * of said contract when she transferred ownership of the propert0 to respondent 8u$o under the $uise of a special power of attorne0# which authori/ed the lat 3ana$e and ad3inister the propert0 for and in ehalf of respondent Carrion. 'lle$edl0# petitioner as9ed respondent Carrion in wr e=plain the alle$ed violation ut the latter i$nored petitioner>s letter# pro3ptin$ petitioner to de3and in writin$ that Carrion the propert0 and to cancel the contract. ? On %* Octo er % 4# petitioner filed a otion To Declare Defendant arites Carrion In Default# ! alle$in$ that despite the service of su33ons and a cop0 of the co3plaint# respondent Carrion failed to file a responsive pleadin$ within the re$le3entar0 period. Respondent 8u$o filed a otion To Dis3iss * on her ehalf and on ehalf of respondent Carrion on 1* Nove3 er % 4# citin$ the $rounds lac9 of 2urisdiction to hear the case on the part of the RTC and estoppel and@or laches on the part of petitioner. Respondent 8u$ the 8ousin$ and :and Ase Re$ulator0 -oard +8:AR-, has 2urisdiction over the co3plaint ecause ulti3atel0# the sole issue to e r was whether petitioner# as the owner and developer of the su division on which the su 2ect propert0 stood# was $uilt0 of co33itt real estate usiness practices. In the sa3e 3otion# respondent 8u$o averred that the RTC had not acBuired 2urisdiction over the person of respondent Carrion for co3pl0in$ with Section 1?# Rule 14 of the Rules of Court on the proper service of su33ons on a non(resident defendant. 8owever# a to the 3otion was a special power of attorne0# where 0 respondent Carrion had authori/ed respondent 8u$o# a3on$ others# to 3ana$ ad3inister the su 2ect propert0 and to prosecute and defend all suits to protect her ri$hts and interest in said propert0. 'fter petitioner filed a co33ent on the 3otion to dis3iss# the RTC issued an O3ni us Order 1 on %1 arch % 5# which denied the 3otion to dis3iss. The RTC held that the court>s 2urisdiction is not deter3ined 0 the defenses set up in the answer or the 3otion to dis3 In the sa3e o3ni us order# the R)C r- e* that su33ons was served properl0# thus# the court had acBuired 2urisdiction over respon Carrion. The RTC noted that respondent 8u$o>s failure to disclose at the outset that she was eBuipped with a special power of att an act constitutive of 3isleadin$ the court. Thus# the RTC declared respondent Carrion in default# directed petitioner to present parte a$ainst respondent Carrion# and respondent 8u$o to file an answer. On 1* 'pril % 5# respondent 8u$o filed an answer on her ehalf and as the attorne0(in(fact of respondent Carrion. 11 The answer pleaded a co3pulsor0 counterclai3 for da3a$es. The followin$ da0# petitioner presented evidence ex-parte a$ainst respondent Carrion. Thus# 'pril % 5# respondent 8u$o sou$ht a reconsideration of the o3ni us order# pra0in$ for the dis3issal of the co3plaint# the canc presentation of evidenceex-parte# the liftin$ of the order of default a$ainst respondent Carrion and the issuance of an order dir e=traterritorial service of su33ons on respondent Carrion. 1% On 1! anuar0 % !# the RTC issued an order# upholdin$ its 2urisdiction over petitioner>s co3plaint. Citin$ the interest of su the RTC lifted the order of default a$ainst respondent Carrion and set the pre(trial conference of the case. 1& 8owever# respondents elevated the 3atter to the Court of 'ppeals via a special civil action for certiorari# pra0in$ that the O3ni dated %1 arch % 5 and Order dated 1! anuar0 % ! issued 0 ud$e Teodoro T. Riel e reversed and set aside and that the co Civil Case No. ( 4(5&5*1 e dis3issed for lac9 of 2urisdiction. On %! Septe3 er % !# the Co-rt o/ Appe$ re!*ere* te $ $ e* De% o! $rantin$ respondents> petition for certiorari. The court set aside the assailed orders of the RTC and ordered the dis3issal of petitioner>s co3plaint for lac9 of 2urisdiction. In i dated Nove3 er % !# the Court of 'ppeals denied petitioner>s 3otion for reconsideration.

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G.R. No. 180394 September 29, 2008MARJORIE B. CADIMAS, by her Attorney-In-Fact, VENANCIO Z. ROSALES,vs.MARITES CARRION and GEMMA HUGO,Respondents.

D E C I S I O N

TINGA,J.:This is a petition for review on certiorari1under Rule 45 of the 1997 Rules of Civil Procedure, assailing the Decision2and Resolution3of the Court of Appeals in CA-G.R. SP No. 98572. The appellate court set aside two orders4of the Regional Trial Court (RTC), Branch 85, Quezon City issued in Civil Case No. Q-04-53581 on the ground that the trial court had no jurisdiction over the case.

The instant petition stemmed from the complaint5foraccion reivindicatoriaand damages filed by petitioner Marjorie B. Cadimas, through her attorney-in-fact, Venancio Z. Rosales, against respondents Marites Carrion and Gemma Hugo. The complaint was docketed as Civil Case No. Q-04-53581 and raffled to Branch 85 of the RTC of Quezon City.

In the complaint, petitioner averred that she and respondent Carrion were parties to a Contract To Sell dated 4 August 2003, wherein petitioner sold to respondent Carrion a town house located at Lot 4-F-1-12 No. 23 Aster Street, West Fairview Park Subdivision, Quezon City for the sum ofP330,000.00 to be paid in installments. According to petitioner, Carrion had violated paragraph 8 of said contract when she transferred ownership of the property to respondent Hugo under the guise of a special power of attorney, which authorized the latter to manage and administer the property for and in behalf of respondent Carrion. Allegedly, petitioner asked respondent Carrion in writing to explain the alleged violation but the latter ignored petitioners letter, prompting petitioner to demand in writing that Carrion and Hugo vacate the property and to cancel the contract.6On 28 October 2004, petitioner filed a Motion To Declare Defendant Marites Carrion In Default,7alleging that despite the service of summons and a copy of the complaint, respondent Carrion failed to file a responsive pleading within the reglementary period.Respondent Hugo filed a Motion To Dismiss8on her behalf and on behalf of respondent Carrion on 18 November 2004, citing the grounds of lack of jurisdiction to hear the case on the part of the RTC and estoppel and/or laches on the part of petitioner. Respondent Hugo argued that the Housing and Land Use Regulatory Board (HLURB) has jurisdiction over the complaint because ultimately, the sole issue to be resolved was whether petitioner, as the owner and developer of the subdivision on which the subject property stood, was guilty of committing unsound real estate business practices.In the same motion, respondent Hugo averred that the RTC had not acquired jurisdiction over the person of respondent Carrion for not complying with Section 16, Rule 14 of the Rules of Court on the proper service of summons on a non-resident defendant. However, attached to the motion was a special power of attorney, whereby respondent Carrion had authorized respondent Hugo, among others, to manage and administer the subject property and to prosecute and defend all suits to protect her rights and interest in said property.9After petitioner filed a comment on the motion to dismiss, the RTC issued an Omnibus Order10on 21 March 2005, which denied the motion to dismiss. The RTC held that the courts jurisdiction is not determined by the defenses set up in the answer or the motion to dismiss.

In the same omnibus order, the RTC ruled that summons was served properly, thus, the court had acquired jurisdiction over respondent Carrion. The RTC noted that respondent Hugos failure to disclose at the outset that she was equipped with a special power of attorney was an act constitutive of misleading the court. Thus, the RTC declared respondent Carrion in default, directed petitioner to present evidenceex-parteagainst respondent Carrion, and respondent Hugo to file an answer.

On 18 April 2005, respondent Hugo filed an answer on her behalf and as the attorney-in-fact of respondent Carrion.11The answer pleaded a compulsory counterclaim for damages. The following day, petitioner presented evidenceex-parteagainst respondent Carrion. Thus, on 22 April 2005, respondent Hugo sought a reconsideration of the omnibus order, praying for the dismissal of the complaint, the cancellation of the presentation of evidenceex-parte, the lifting of the order of default against respondent Carrion and the issuance of an order directing the extraterritorial service of summons on respondent Carrion.12On 17 January 2007, the RTC issued an order, upholding its jurisdiction over petitioners complaint. Citing the interest of substantial justice, the RTC lifted the order of default against respondent Carrion and set the pre-trial conference of the case.13However, respondents elevated the matter to the Court of Appeals via a special civil action for certiorari, praying that the Omnibus Order dated 21 March 2005 and Order dated 17 January 2007 issued by Judge Teodoro T. Riel be reversed and set aside and that the complaint in Civil Case No. Q-04-53581 be dismissed for lack of jurisdiction.

On 27 September 2007, the Court of Appeals rendered the assailed Decision granting respondents petition for certiorari. The appellate court set aside the assailed orders of the RTC and ordered the dismissal of petitioners complaint for lack of jurisdiction. In its Resolution dated 9 November 2007, the Court of Appeals denied petitioners motion for reconsideration.

Hence, the instant petition, raising the following arguments: (1) based on the allegations in the complaint, the RTC has jurisdiction over Civil Case No. Q-04-53581; (2) in any case, respondents have expressly submitted to or recognized the jurisdiction of the RTC by filing an answer with counterclaim; and (3) respondents erroneously availed of a Rule 65 petition instead of filing a timely appeal from the order denying their motion to dismiss.14Principal issue: WON RTC has jurisdiction of the case. Essentially, petitioner argues that based on the allegations in the complaint and the reliefs sought, the RTC has jurisdiction over the matter. In any case, the compulsory counterclaim pleaded in the answer of respondents was an express recognition on their part of the jurisdiction of the RTC over the complaint foraccion reivindicatoria, petitioner adds.

Ruling: The petition is meritorious.

The NATURE OF AN ACTION AND THE JURISDICTION of a tribunal are determined by the material allegations of the complaint and the law at the time the action was commenced. Jurisdiction of the tribunal over the subject matter or nature of an action is conferred only by law and not by the consent or waiver upon a court which, otherwise, would have no jurisdiction over the subject matter or nature of an action.15An examination of Section 1 of Presidential Decree (P.D.) No. 1344,16which enumerates the regulatory functions of the HLURB,17readily shows that its quasi-judicial function is limited to hearing only the following specific cases:

SECTION 1. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature:

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker, or salesman; and

C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the owner, developer, dealer or salesman.

The aforequoted provision must be read in the light of the statutes preamble or the introductory or preparatory clause that explains the reasons for its enactment or the contextual basis for its interpretation. The scope of the regulatory authority thus lodged in the National Housing Authority (NHA) [now HLURB] is indicated in the second and third preambular paragraphs of the statute which provide:

"WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators, and/or sellers have reneged on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage, water systems, lighting systems and other similar basic requirements, thus endangering the health and safety of home and lot buyers;

WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to deliver titles to the buyers or titles free from liens and encumbrances, and to pay real estate taxes, and fraudulent sales of the same subdivision lots to different innocent purchasers for value."18The boom in the real estate business all over the country resulted in more litigation between subdivision owners/developers and lot buyers with the issue of the jurisdiction of the NHA or the HLURB over such controversies as against that of regular courts. In the cases that reached this Court, the ruling has consistently been that the NHA or the HLURB has jurisdiction over complaints arising from contracts between the subdivision developer and the lot buyer or those aimed at compelling the subdivision developer to comply with its contractual and statutory obligations to make the subdivision a better place to live in.19Basis of SCs decision: We agree with the ruling of the RTC that it has jurisdiction over the case based on the allegations of the complaint. Nothing in the complaint or in the contract to sell suggests that petitioner is the proper party to invoke the jurisdiction of the HLURB. There is nothing in the allegations in the complaint or in the terms and conditions of the contract to sell that would suggest that the nature of the controversy calls for the application of either P.D. No. 957 or P.D. No. 1344 insofar as the extent of the powers and duties of the HLURB is concerned.Note particularly paragraphs (b) and (c) of Sec. 1, P.D. No. 1344 as worded, where the HLURBs jurisdiction concerns cases commencedbysubdivision lot or condominium unit buyers. As to paragraph (a), concerning "unsound real estate practices," the logical complainants would be the buyers and customers against the sellers (subdivision owners and developers or condominium builders and realtors), and notvice versa.20The complaint does not allege that petitioner is a subdivision lot buyer. The contract to sell does not contain clauses which would indicate that petitioner has obligations in the capacity of a subdivision lot developer, owner or broker or salesman or a person engaged in real estate business. From the face of the complaint and the contract to sell, petitioner is an ordinary seller of an interest in the subject property who is seeking redress for the alleged violation of the terms of the contract to sell. Petitioners complaint alleged that a contract to sell over a townhouse was entered into by and between petitioner and respondent Carrion and that the latter breached the contract when Carrion transferred the same to respondent Hugo without petitioners consent.21Thus, petitioner sought cancellation of the contract and the recovery of possession and ownership of the town house. Clearly, the complaint is well within the jurisdiction of the RTC.InJavellana v. Hon. Presiding Judge,RTC, Branch 30, Manila,22the Court affirmed the jurisdiction of the RTC over the complaint foraccion publicianaand sum of money on the ground that the complaint did not allege that the subject lot was part of a subdivision project but that the sale was an ordinary sale on an installment basis. Even the mere assertion that the defendant is a subdivision developer or that the subject lot is a subdivision lot does not automatically vest jurisdiction on the HLURB. On its face, the complaint must sufficiently describe the lot as a subdivision lot and sold by the defendant in his capacity as a subdivision developer to fall within the purview of P.D. No. 957 and P.D. No. 1344 and thus within the exclusive jurisdiction of the HLURB.23In their comment, respondents citeAntipolo Realty Corp. v. National Housing Authority,24to bolster the argument that the HLURB has jurisdiction over controversies involving the determination of the rights of the parties under a contract to sell a subdivision lot.Antipolo Realtyis not squarely applicable to the instant controversy. The issue in said case called for the determination of whether the developer complied with its obligations to complete certain specified improvements in the subdivision within the specified period of time, a case that clearly falls under Section 1, paragraph (c) of P.D. No. 1344.

In the instances where the jurisdiction of the HLURB was upheld, the allegations in the complaint clearly showed that the case involved the determination of the rights and obligations of the parties in a sale of real estate under P.D. No. 957,25or the complaint for specific performance sought to compel the subdivision developer to comply with its undertaking under the contract to sell,26or the claim by the subdivision developer would have been properly pleaded as a counterclaim in the HLURB case filed by the buyer against the developer to avoid splitting causes of action.27The statement inSuntay v. Gocolay28to the effect that P.D. No. 957 encompasses all questions regarding subdivisions and condominiums, which was cited by the Court of Appeals in the assailed decision, is a mereobiter dictum. As a matter of fact, the Court inSuntaynullified the orders issued by the HLURB over the action for the annulment of an auction sale, cancellation of notice of levy and damages on the ground of lack of jurisdiction. P.D. No. 957 and P.D. No. 1344 were not the applicable laws because the action was brought against a condominium buyer and not against the developer, seller, or broker contemplated under P.D. No. 1344. The action likewise involved the determination of ownership over the disputed condominium unit, which by its nature does not fall under the classes of disputes cognizable by the HLURB under Section 1 of P.D. No. 1344.

The Court of Appeals held that the provision in the contract to sell mandating membership of the buyer of the housing unit in a housing corporation was a strong indication that the property purchased by respondent Carrion from petitioner was part of a tract of land subdivided primarily for residential purposes. Thus, the appellate court concluded that the HLURB has jurisdiction over the controversy because the property subject thereof was part of a subdivision project.

Not every controversy involving a subdivision or condominium unit falls under the competence of the HLURB29in the same way that the mere allegation of relationship between the parties,i.e., that of being subdivision owner/developer and subdivision lot buyer, does not automatically vest jurisdiction in the HLURB. For an action to fall within the exclusive jurisdiction of the HLURB, the decisive element is the nature of the action as enumerated in Section 1 of P.D. No. 1344.30Notably, inSpouses Dela Cruz v. Court of Appeals,31the Court upheld the jurisdiction of the RTC over the complaint for cancellation of the contract to sell of a subdivision house and lot because the case did not fall under any of the cases mentioned in Section 1, P.D. No. 1344. In interpreting said provision, the Court explained, thus:

On this matter, we have consistently held that the concerned administrative agency, the National Housing Authority (NHA) before and now the HLURB, has jurisdiction over complaints aimed at compelling the subdivision developer to comply with its contractual and statutory obligations.

For their part, respondents claim that the resolution of the case ultimately calls for the interpretation of the contract to sell and the determination of whether petitioner is guilty of committing unsound real estate business practices, thus, the proper forum to hear and decide the matter is the HLURB. The argument does not impress.

It is an elementary rule of procedural law that jurisdiction of the court over the subject matter is determined by the allegations of the complaint irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. As a necessary consequence, the jurisdiction of the court cannot be made to depend upon the defenses set up in the answer or upon the motion to dismiss, for otherwise, the question of jurisdiction would almost entirely depend upon the defendant. What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint. The averments in the complaint and the character of the relief sought are the matters to be consulted.32Thus, the allegations in respondents motion to dismiss on the unsound real estate business practices allegedly committed by petitioner, even if proved to be true, cannot serve to oust the RTC of its jurisdiction over actions for breach of contract and damages which has been conferred to it by law.WHEREFORE, the instant petition for review on certiorari is GRANTED and the Decision dated 27 September 2007 and Resolution dated 9 November 2007 of the Court of Appeals in CA-G.R. SP No. 98572 are REVERSED and SET ASIDE. The orders dated 21 March 2005 and 17 January 2007 of the Regional Trial Court, Branch 85, Quezon City in Civil Case No. Q-04-53581 are REINSTATED. The Regional Trial Court is ORDERED to resume the proceedings in and decide Civil Case No. Q-04-53581 with deliberate speed. Costs against respondents.

SO ORDERED.

GMA vs. ABS-CBNPetitioner GMA Network, Inc. (GMA) filed onMay 6, 2003before the Regional Trial Court of Quezon City a complaint for damages[1]against respondents ABS-CBN Broadcasting Corporation (ABS-CBN), Central CATV, Inc. (SkyCable), Philippine Home Cable Holdings, Inc. (Home Cable) and Pilipino Cable Corporation (Sun Cable), which was raffled to Branch 97[2]and docketed as Civil Case No. Q03-49500.

In its complaint, GMA alleged that respondents engaged in unfair competition when the cable companies arbitrarily re-channeled petitioners cable television broadcast onFebruary 1, 2003, in order to arrest and destroy its upswing performance in the television industry.

GMA argued that respondents were able to perpetrate such unfair business practice through a common ownership and interlocking businesses. SkyCable and Sun Cable are wholly-owned subsidiaries of Sky Vision Corporation (Sky Vision) which is allegedly controlled by Lopez, Inc. On the other hand, Home Cable is a wholly-owned subsidiary of Unilink Communications Corporation (Unilink), which is owned by Mediaquest Holdings, Inc., a company controlled by the Pension Trust Fund of the PLDT Employees (PLDT Group).

Pursuant to aMaster Consolidation Agreement, the ownership, rights and interests in Sky Vision and Unilink were purportedly placed under a holding company known as Beyond Cable, 66.5 % of which is owned by the Benpres Group, composed of Lopez Inc., Benpres Holdings and ABS-CBN, while 33.5% thereof is owned by the PLDT Group. As a result of this business combination, respondents have cornered at least 71% of the total cable television market in Mega Manila. They are thus able to dictate the signal transmission, channel position, and the airing of shows, programs, and broadcast of non-cable companies like ABS-CBN and GMA, which the law requires them to carry.

GMA alleged that the re-channeling of its cable television broadcast resulted in damage to its business operations, thus:

...

17. Following their arbitrary act of re-channeling the cable position of plaintiff GMA from Channel 12 to Channel 14, the defendants SkyCable and Pilipino Cable (or Sun Cable) deliberately failed to transmit the signal of plaintiff GMA to their channels in clear audio transmission resulting in noticeable dropouts and spillover of extraneous sound and in clear visual transmission resulting in distorted and/or degraded visual presentation;

18. Soon thereafter, numerous complaints of distortions, degradations and disorders of GMAs shows on the cable channels were received by plaintiff GMA from subscribers of the defendant cable companies SkyCable, Home Cable and Sun Cable, such as snowy reception, no signal, and no audio. These complaints escalated to alarming proportions when plaintiff GMA made public the audio and visual distortions of its TV shows on the cable channels;

19. The audio disorder and the visual distortion and/or degradation of plaintiff GMAs signal transmission happened mostly during the showing of plaintiff GMAs top rating programs;

19.1. These distortions did not occur in the cable TV shows of defendant ABS-CBN on the channels of the co-defendant cable companies;

20. It is a matter of common knowledge, and defendants are fully aware, that the quality of signal and audio transmission and established channel position in cable TV of a non-cable television network, like plaintiff GMA, are crucial factors in arriving at the ratings of the network and its programs and which ratings are, in turn, determinative of the business judgment of commercial advertisers, producers and blocktimers to sign broadcast contracts with the network, which contracts are the lifeblood of TV networks and stations like plaintiff GMA;

20.1. Defendants are also aware that 50% of so-called people meter which is a device used by the ratings suppliers (AGB Philippines and AC Nielsen) to determine the ratings and audience shares of TV programs are placed in cable TV.

20.2. These unjust, high-handed and unlawful acts of the defendants adversely affected the viewership, quality of the programs, and ratings of plaintiff GMA for which defendants are liable;

...

22. As a result of defendants acts of unfair competition, corporate combinations and manipulations as well as unjust, oppressive, high-handed and unlawful business practices, plaintiff suffered business interruptions and injury in its operations for which it should be compensated in the amount of P10Million by way of actual and compensatory damages[.][3]

OnJuly 15, 2003, SkyCable and Sun Cable moved for dismissal of the complaint on the grounds oflitis pendentiaand forum-shopping since there was a similar case pending before the National Telecommunications Commission (NTC) entitled GMA Network, Inc. v. Central CATV, Inc., Philippine Home Cable Holdings, Inc., and Pilipino Cable Corporation. The case, docketed as NTC ADM Case No. 2003-085, allegedly involved the same cause of action and the same parties, except for ABS-CBN. SkyCable and Sun Cable also asserted that it is the NTC that has primary jurisdiction over the issues raised in the complaint. Moreover, GMA had no cause of action against the two entities and failed to exhaust administrative remedies.[4]

OnJuly 17, 2003, Home Cable filed anAnswer with Compulsory Counterclaims[5]pleading, as affirmative defenses, the same matters alleged in the motion to dismiss of SkyCable and Sun Cable. ABS-CBN also filed anAnswer with Compulsory Counterclaims[6]contending that GMA had no cause of action against it and that the complaint failed to state any.

GMA opposed the motion to dismiss[7]and filed aReplyto the answer of Home Cable[8]and ABS-CBN.[9] A preliminary hearing was held on the motion to dismiss as well as the affirmative defenses.

RTCs decision: In due course, the trial court issued the assailed resolution[10]dismissing the complaint. The trial court held that the resolution of the legal issues raised in the complaint required the determination of highly technical, factual issues over which the NTC had primary jurisdiction. Additionally, it held that GMA had no cause of action against ABS-CBN because:

... It is evident that plaintiffs cause of action is against the cable companies and not against ABS-CBN since it does not establish that defendant ABS-CBN had a hand in the re-channeling of plaintiffs cable transmission because essentially defendant ABS-CBN is similarly situated as plaintiff. The mere fact that the people behind ABS-CBN is allegedly the same people who are at the helm of these cable companies, and thus were engaged in unfair competition and/or unfair trade practices is a conclusion of law and does not satisfy the requirement that the plaintiff state ultimate facts in asserting its cause of action. [11]

Hence, this petition filed by GMA under Section 2(c), Rule 41 in relation to Rule 45 of the Rules of Court, asserting that:

Issues:

A

THE TRIAL COURT ERRED IN RULING THAT THE NTC HAS PRIMARY JURISDICTION OVER PETITIONERS COMPLAINT FOR DAMAGES AND IN DISMISSING THE CASE FOR LACK OF JURISDICTION.

B

THE TRIAL COURT ERRED IN RULING THAT PETITIONERS COMPLAINT STATES NO CAUSE OF ACTION AGAINST RESPONDENT ABS-CBN.[12]

GMA asserts that the resolution of the issues raised in the complaint does not entail highly technical matters requiring the expertise of the NTC. Petitioner insists that the subject matter of the complaint merely involves respondents wrongful acts of unfair competition and/or unfair trade practices resulting to damages, jurisdiction over which lies with the regular courts and not the NTC.

Ruling: We disagree.

GMAs complaint for damages is based on the alleged arbitrary re-channeling of its broadcast over the cable companies television systems, thereby resulting in the distortion and degradation of its video and audio signals. The re-channeling was allegedly made possible through the common ownership and interlocking businesses of respondent corporations and was designed to thwart petitioners upswing performance in the television ratings game. In other words, the wrongful acts complained of and upon which the damages prayed for are based, have to do with the operations and ownership of the cable companies. These factual matters undoubtedly pertain to the NTC and not the regular courts.

That the matters complained of by GMA are within the NTCs exclusive domain can be discerned from the statutes governing the broadcasting and cable television industry. Section 15 of Executive Order No. 546,[13]by which the NTC was created, provides for its general functions as follows:

a. Issue Certificate of Public Convenience for the operation of communications utilities and services, radio communications systems, wire or wireless telephone or telegraph system, radio and television broadcasting system and other similar public utilities;

b. Establish, prescribe and regulate areas of operation of particular operators of public service communications; and determine and prescribe charges or rates pertinent to the operation of such public utility facilities and services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies recognized by the Philippine Government as the proper arbiter of such charges or rates;

...

g. Promulgate such rules and regulations, as public safety and interest may require, to encourage a larger and more effective use of communications, radio and television broadcasting facilities, and to maintain effective competition among private entities in these activities whenever the Commission finds it reasonably feasible[.]

In 1987, Executive Order No. 205[14]was issued which empowers the NTC to grant certificates of authority for the operation of cable antenna television system subject to the limitation that the authority to operate shall not infringe on the television and broadcast markets. Executive Order No. 436[15]issued in 1997, specifically vests the NTC with thesolepower of regulation and supervision over the cable television industry.

InBatangas CATV, Inc. v. Court of Appeals,[16]we held that the NTCs regulatory power over the broadcasting and cable television industry extends to matters which are peculiarly within its competence. These include the: (1) determination of rates, (2) issuance of certificates of authority, (3) establishment of areas of operation, (4) examination and assessment of the legal, technical and financial qualifications of applicant operators, (5) granting of permits for the use of frequencies, (6)regulation of ownership and operation, (7) adjudication of issues arising from its functions, and (8) other similar matters.[17] With respect to the foregoing, therefore, the NTC exercises exclusive, original and primary jurisdiction to the exclusion of the regular courts.

In the case at bar, before the trial court can resolve the issue of whether GMA is entitled to an award of damages, it would have to initially ascertain whether there was arbitrary re-channeling which distorted and downgraded GMAs signal. The ascertainment of these facts, which relate to the operations of the cable companies, would require the application of technical standards imposed by the NTC as well as determination of signal quality within the limitations imposed by the technical state of the art.[18]These factual questions would necessarily entail specialized knowledge in the fields of communications technology and engineering which the courts do not possess. It is the NTC which has the expertise and skills to deal with such matters.

The regulation of ownership of television and cable television companies is likewise within the exclusive concern of the NTC, pursuant to its broader regulatory power of ensuring and promoting a larger and more effective use of communications, radio and television broadcasting facilities in order that the public interest may well be served. The NTC is mandated to maintain effective competition among private entities engaged in the operation of public service communications. It is also the agency tasked to grant certificates of authority to cable television operators, provided that the same does not infringe on the television and broadcast markets.

As such, GMAs allegations of unlawful business combination and unjust business practices also properly pertain to the NTC. It is in the best position to judge matters relating to the broadcasting industry as it is presumed to have an unparalleled understanding of its market and commercial conditions. Moreover, it is the NTC that has the information, statistics and data peculiar to the television broadcasting industry. It is thus the body that is ideally suited to act on petitioners allegations of market control and manipulation.

InIndustrial Enterprises, Inc. v. Court of Appeals,[19]the Court held that:

It may occur that the Court has jurisdiction to take cognizance of a particular case, which means that the matter involved is also judicial in character. However, if the case is such that its determination requires the expertise, specialized skills and knowledge of the proper administrative bodies because technical matters or intricate questions of facts are involved, then relief must first be obtained in an administrative proceeding before a remedy will be supplied by the courts even though the matter is within the proper jurisdiction of a court. This is the doctrine of primary jurisdiction. It applies where a claim isoriginally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such casethe judicial process is suspended pending referral of such issues to the administrative body for its view[.][20]

Consequently, while it is true that the regular courts are possessed of general jurisdiction over actions for damages, it would nonetheless be proper for the courts to yield its jurisdiction in favor of an administrative body when the determination of underlying factual issues requires the special competence or knowledge of the latter. In this era of clogged court dockets, administrative boards or commissions with special knowledge, experience and capability to promptly hear and determine disputes on technical matters or intricate questions of facts, subject to judicial review in case of grave abuse of discretion, are well nigh indispensable. Between the power lodged in an administrative body and a court, therefore, the unmistakable trend is to refer it to the former.[21]

In this regard, we note that there is a pending case before the NTC in which the factual issues raised in petitioners complaint have also been pleaded. Although petitioner prays in the NTC case for the administrative remedy of cancellation of the cable companies certificates of authority, licenses and permits, it is inevitable that, in granting or denying this prayer, the NTC would have to pass upon the same factual issues posed in petitioners complaint before the trial court. The latter was thus correct in applying the doctrine of primary jurisdiction if only to avoid conflicting factual findings between the court and the NTC.

Finally, the complaint failed to state a cause of action against ABS-CBN and the other respondents, considering that the ultimate facts upon which the complaint for damages depends fall within the technical competence of an administrative body. Otherwise stated, pending determination by the NTC of the factual questions involved in the case, petitioners complaint, which is founded upon such factual issues, would be premature.

WHEREFORE, the petition isDENIED. The assailed resolution datedOctober 30, 2003of the Regional Trial Court of Quezon City, Branch 97, isAFFIRMED.

SO ORDERED.