In determining the jurisdiction of an action whose subject is incapable of pecuniary estimation, the nature of the principal action or remedy sought must first be ascertained. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation and the jurisdiction of the court depends on the amount of the claim. But, where the primary issue is something other than the right to recover a sum of money, where the money claim is purely incidental to, or a consequence of, the principal relief sought, such are actions whose subjects are incapable of pecuniary estimation, hence cognizable by the RTCs.

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 Facts: 

Payoyo and Novaline, Inc., through its president, Villena, entered into a contract for the delivery and installation of kitchen cabinets in Payoyo's residence. The cabinets were to be delivered within 90 days from downpayment of 50% of the purchase price. Payoyo paid the downpayment. Another contract was entered into for the delivery of home appliances and Villena also paid the 50% downpayment. Despite demand, Villena failed to install the kitchen cabinets and deliver the appliances.

Payoyo filed a complaint for recovery of a sum of money and damages against Villena. Villena posits that the RTC has no jurisdiction over the complaint since it is mainly for recovery of a sum of money in the amount of P184,821.50 which is below the jurisdictional amount set for RTCs.

Payoyo, on the other hand, contends that the RTC has jurisdiction over the complaint as the allegations therein show that it is actually a case for rescission of the contracts. The recovery of a sum of money is merely a necessary consequence of the cancellation of the contracts.


Issue:

 Whether or not the RTC has jurisdiction over the case.


Held:

Yes. In determining the jurisdiction of an action whose subject is incapable of pecuniary estimation, the nature of the principal action or remedy sought must first be ascertained. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation and the jurisdiction of the court depends on the amount of the claim. But, where the primary issue is something other than the right to recover a sum of money, where the money claim is purely incidental to, or a consequence of, the principal relief sought, such are actions whose subjects are incapable of pecuniary estimation, hence cognizable by the RTCs.

Verily, what determines the nature of the action and which court has jurisdiction over it are the allegations of the complaint and the character of the relief sought.

The complaint, albeit entitled as one for collection of a sum of money with damages, is one incapable of pecuniary estimation; thus, one within the RTC's jurisdiction. The allegations therein show that it is actually for breach of contract.  A case for breach of contract 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.  The averments in the complaint show that Payoyo sought the cancellation of the contracts and refund of the downpayments since Villena failed to comply with the obligation to deliver the appliances and install the kitchen cabinets subject of the contracts. While the respondent prayed for the refund, this is just incidental to the main action, which is the rescission or cancellation of the contracts. (Villena vs. Payoyo, G.R. No. 163021, April 27, 2007)