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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. 85419 March 9, 1993 DEVELOPMENT BANK OF RIZAL, plaintiff-petitioner, vs. SIMA WEI and/or LEE KIAN HUAT, MARY CHENG UY, SAMSON TUNG, ASIAN INDUSTRIAL PLASTIC CORPORATION and PRODUCERS BANK OF THE PHILIPPINES, defendants-respondents. Yngson & Associates for petitioner. Henry A. Reyes & Associates for Samso Tung & Asian Industrial Plastic Corporation. Eduardo G. Castelo for Sima Wei. Monsod, Tamargo & Associates for Producers Bank. Rafael S. Santayana for Mary Cheng Uy.

CAMPOS, JR., J.: On July 6, 1986, the Development Bank of Rizal (petitioner Bank for brevity) filed a complaint for a sum of money against respondents Sima Wei and/or Lee Kian Huat, Mary Cheng Uy, Samson Tung, Asian Industrial Plastic Corporation (Plastic Corporation for short) and the Producers Bank of the Philippines, on two causes of action: (1) To enforce payment of the balance of P1,032,450.02 on a promissory note executed by respondent Sima Wei on June 9, 1983; and (2) To enforce payment of two checks executed by Sima Wei, payable to petitioner, and drawn against the China Banking Corporation, to pay the balance due on the promissory note. Except for Lee Kian Huat, defendants filed their separate Motions to Dismiss alleging a common ground that the complaint states no cause of action. The trial court granted the defendants' Motions to Dismiss. The Court of Appeals affirmed this decision, * to which the petitioner Bank, represented by its Legal Liquidator, filed this Petition for Review by Certiorari, assigning the following as the alleged errors of the Court of Appeals: 1 (1) THE COURT OF APPEALS ERRED IN HOLDING THAT THE PLAINTIFF-PETITIONER HAS NO CAUSE OF ACTION AGAINST DEFENDANTS-RESPONDENTS HEREIN. (2) THE COURT OF APPEALS ERRED IN HOLDING THAT SECTION 13, RULE 3 OF THE REVISED RULES OF COURT ON ALTERNATIVE DEFENDANTS IS NOT APPLICABLE TO HEREIN DEFENDANTS-RESPONDENTS. The antecedent facts of this case are as follows:

In consideration for a loan extended by petitioner Bank to respondent Sima Wei, the latter executed and delivered to the former a promissory note, engaging to pay the petitioner Bank or order the amount of P1,820,000.00 on or before June 24, 1983 with interest at 32% per annum. Sima Wei made partial payments on the note, leaving a balance of P1,032,450.02. On November 18, 1983, Sima Wei issued two crossed checks payable to petitioner Bank drawn against China Banking Corporation, bearing respectively the serial numbers 384934, for the amount of P550,000.00 and 384935, for the amount of P500,000.00. The said checks were allegedly issued in full settlement of the drawer's account evidenced by the promissory note. These two checks were not delivered to the petitioner-payee or to any of its authorized representatives. For reasons not shown, these checks came into the possession of respondent Lee Kian Huat, who deposited the checks without the petitioner-payee's indorsement (forged or otherwise) to the account of respondent Plastic Corporation, at the Balintawak branch, Caloocan City, of the Producers Bank. Cheng Uy, Branch Manager of the Balintawak branch of Producers Bank, relying on the assurance of respondent Samson Tung, President of Plastic Corporation, that the transaction was legal and regular, instructed the cashier of Producers Bank to accept the checks for deposit and to credit them to the account of said Plastic Corporation, inspite of the fact that the checks were crossed and payable to petitioner Bank and bore no indorsement of the latter. Hence, petitioner filed the complaint as aforestated. The main issue before Us is whether petitioner Bank has a cause of action against any or all of the defendants, in the alternative or otherwise. A cause of action is defined as an act or omission of one party in violation of the legal right or rights of another. The essential elements are: (1) legal right of the plaintiff; (2) correlative obligation of the defendant; and (3) an act or omission of the defendant in violation of said legal right. 2 The normal parties to a check are the drawer, the payee and the drawee bank. Courts have long recognized the business custom of using printed checks where blanks are provided for the date of issuance, the name of the payee, the amount payable and the drawer's signature. All the drawer has to do when he wishes to issue a check is to properly fill up the blanks and sign it. However, the mere fact that he has done these does not give rise to any liability on his part, until and unless the check is delivered to the payee or his representative. A negotiable instrument, of which a check is, is not only a written evidence of a contract right but is also a species of property. Just as a deed to a piece of land must be delivered in order to convey title to the grantee, so must a negotiable instrument be delivered to the payee in order to evidence its existence as a binding contract. Section 16 of the Negotiable Instruments Law, which governs checks, provides in part: Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. . . . Thus, the payee of a negotiable instrument acquires no interest with respect thereto until its delivery to him. 3Delivery of an instrument means transfer of possession, actual or constructive, from one person to another. 4Without the initial delivery of the instrument from the drawer to the payee, there can be no liability on the instrument. Moreover, such delivery must be intended to give effect to the instrument. The allegations of the petitioner in the original complaint show that the two (2) China Bank checks, numbered 384934 and 384935, were not delivered to the payee, the petitioner herein. Without the delivery of said checks to petitioner-payee, the former did not acquire any right or interest therein and cannot therefore assert any cause of action, founded on said checks, whether against the drawer Sima Wei or against the Producers Bank or any of the other respondents. In the original complaint, petitioner Bank, as plaintiff, sued respondent Sima Wei on the promissory note, and the alternative defendants, including Sima Wei, on the two checks. On appeal from the orders of dismissal of the Regional Trial Court, petitioner Bank alleged that its cause of action was not based on collecting the sum of money evidenced by the negotiable instruments stated but on quasi-delict — a claim for damages on the ground of fraudulent acts and evident bad faith of the alternative respondents. This was clearly an attempt by the petitioner Bank to change not only the theory of its case but the basis of his cause of action. It is wellsettled that a party cannot change his theory on appeal, as this would in effect deprive the other party of his day in court. 5

Her allegation that she has paid the balance of her loan with the two checks payable to petitioner Bank has no merit for. petitioner. MALABANAN. We find it unnecessary to discuss the same in view of Our finding that the petitioner Bank did not acquire any right or interest in the checks due to lack of delivery. 74938-39 January 17. petitioners. respondents. Puruganan. 1990 LEONIDA CHY SENOLOS. However. without admitting. anything which the respondents may have done with respect to said checks could not have prejudiced petitioner Bank. in the alternative or otherwise. No. the case is REMANDED to the trial court for a trial on the merits. G. in order to determine whether respondent Sima Wei is liable to the Development Bank of Rizal for any amount under the promissory note allegedly signed by her.R. it never owned them (the checks) nor did it acquire any interest therein. SO ORDERED. the judgment of the Court of Appeals dismissing the petitioner's complaint is AFFIRMED insofar as the second cause of action is concerned. It therefore has no cause of action against the respondents. INTERMEDIATE APPELLATE COURT and GAW CHING. In the light of the foregoing. Petitioner Bank has therefore no cause of action against said respondents. Thus. If at all. L-75524-25 January 17. . Rule 3 of the Rules of Court. Lagman. LEONARD CHAN and LEONSO CHY CHAN. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. With respect to the second assignment of error raised by petitioner Bank regarding the applicability of Section 13. respondents.Notwithstanding the above. who would have a cause of action against her co-respondents. Chato. insofar as the other respondents are concerned. as We have earlier explained. Torres.R. GAW CHING and THE INTERMEDIATE APPELLATE COURT. unless respondent Sima Wei proves that she has been relieved from liability on the promissory note by some other cause. It had no right or interest in the checks which could have been violated by said respondents. Therefore. that there was delivery to petitioner Bank. Arrieta & Evangelista for petitioners in 75524-25. 1990 ANGELINA J. Since petitioner Bank never received the checks on which it based its action against said respondents. No. vs. Chato & Tan and Romero. petitioner Bank has no privity with them. the drawer. consistent with this decision. these checks were never delivered to petitioner Bank. vs. petitioner Bank has a right of action against her for the balance due thereon. it does not necessarily follow that the drawer Sima Wei is freed from liability to petitioner Bank under the loan evidenced by the promissory note agreed to by her. Chato. 6 None of these exceptions were alleged by respondent Sima Wei. On the first cause of action. in the alternative or otherwise. it is Sima Wei. And even granting. if the allegations in the complaint are found to be true. the delivery of checks in payment of an obligation does not constitute payment unless they are cashed or their value is impaired through the fault of the creditor.

going to repair and convert the dwelling into a warehouse.00 per square meter and that if he is not agreeable.00 per square meter and that if he is not agreeable. 05136-05137 dated 31 January 1986. Civil Case No. and also prayed for the award of damages. So. 74938-39 and 75524-25 — assail the decision of the then Intermediate Appellate Court in A. et al. his counsel wrote Malabanan informing her about the deposit (Exh. The following facts found by the trial court. C) requesting Atty. G. R-81-416 and Civil Case No.00 per square meter.00 per square meter. we ordered the consolidation of the two (2) Petitions. 1981 (Exh. Manila. Plaintiff's counsel advised him to deposit the rentals in a bank which he did. in connection with the sale of piece of land located in Binondo.00 per month. Civil Case No. Plaintiff conducted his business (Victoria Blacksmith Shop) on the ground floor and lived on the second floor. Before the increase. Atty. are undisputed: Evidence for plaintiff showed that Gaw Ching has been leasing the house and lot located [in] 697-699 Asuncion Street. Nos.Quiason. paid monthly. Atty.000. she will sell the premises to another person at P4. The first case. CV Nos. Angelina Malabanan told him that she was selling the house and lot for P5. Leonida Senolos. Jabit since 1951. 1980. plaintiff received another letter from defendant Malabanan which he gave to his counsel who told him that said defendant is offering the house and lot at P5. Plaintiff testified that he was willing to buy the subject property at P4. Jabit as to its duration but the rentals were evidently. Atty. Gaw Ching tried to pay the rent for June.R. his daughter. RESOLUTION FELICIANO. plaintiff received a letter from Atty. There was no written contract of lease between plaintiff and Mr. also. After receiving the letter. Upon motion of petitioners. Limqueco & Macaraeg Law Office and Herminio T. Gaw Ching paid P700. defendant Malabanan wrote plaintiff. Binondo.: The two (2) Petitions before us — G. Respondent Gaw Ching instituted two (2) cases against petitioners Angelina Malabanan.000. she will sell it to another person.00 per month. that the price is prohibitive. Subsequently.C. R-82-6789. sought to annul such sale and to enjoin the demolition of a building standing on that piece of land.00 per square meter because it was expensive. Manila from Mr. demanded damages from petitioner Senolos for bringing about the demolition of the building.000. It took a long time before Atty.-G. Jabit died. Techico dated December 5. and adopted and incorporated by the appellate court. as they were more importantly. Sugay for respondent Gaw Ching. On May 13. On November 3. This time. namely: Civil Case No. 82-6798. Sugay sent a reply dated November 24.000. Gaw Ching claims that he is not in a position to buy the property at P5. B). 1980. requesting that the pertinent documents of the sale be sent to them but according to plaintiff. 1980. it was the opinion of his counsel that it was not necessary to reply because the context of the letter was invariably a threat. Barot & Torres for petitioners in 74938-39.00 but hastened to add that it was still expensive and did not ask his counsel to write Malabanan about it. When Mr. 1980. Sugay sent a reply dated February 17. defendant Malabanan continued to lease the premises to plaintiff but at an increased rental of P1. as evidenced by receipts of rentals. reiterating that she was selling the house and lot at P5. On October 2.000. plaintiff received another letter from Defendant Malabanan. but Malabanan refused to accept it. R-81416. On April 27. plaintiff turned over the letter to his counsel.000. 1980.R. informing him that the premises in question had already been sold to defendant Leonida Senolos. The second case. which reversed the decision of the Regional Trial Court in two (2) consolidated cases. J. after which. Plaintiff told her however. Sugay's letter was answered . Techico to furnish them with the Deed of Sale and TCT because he doubted the veracity of the sale. Makalintal.000.R. 1980 demanding that he vacate the premises and to pay the arrearages in rentals from October to December. Sugay. 1980. they were not furnished a copy of said sale. Consequently.

went to the police precinct where the City Hall Official talked with somebody in the precinct. However. on April 27. Plaintiff then immediately called up Atty. Felix Tienzo believes that the City of Manila was correct in ordering the demolition of the building but he intended to hold in abeyance the demolition of the building only in obedience to the order of the MPWH. .m. . I). Sugay and told him that Leonida Senolos called some people to demolish the house. Sugay to file a civil case against defendants. plaintiff had to move out of the premises when it was demolished by the defendant. Sugay came back. i. It was only when they returned to the premises at about 4:00 p.A) which reflected that the date of entry of the Deed of Sale was December 9.m. whereas the Deed of Sale was dated August 23.. however. he testified. He deposited the monthly rentals which Malabanan refused to accept. Roldan claim that they do not usually receive an order from the MPWH stopping the demolitions. both Mr. when there was a sudden brownout. when he was issued a certificate of naturalization (Exh. . climbed the roof with the use of a ladder. Mr. L to L-6). and told plaintiff that he was going to the City Hall. M). After receiving Exhibits "I" and "2.m. . admitted that he was not yet a Filipino Citizen at the time the offer to sell was made. On October 7. . He did not. 2-Senolos) to which he affixed his signature. but Leonida Senolos refused to heed the order. while he was on the ground floor. the MPWH issued an order that the demolition to be stopped. Tienzo and Mr. Atty.. 1980. (Exh. . cut the electric wires and started banging the roof. 1980 and that he became a Filipino citizen only on October 7. City Engineer and Building Officer. and mother-in-law were in the house and about 7 laborers were in the shop when the incident happened. Plaintiff then told Atty. plaintiff finally was able to procure a copy of the Deed of Sale and TCT No. On cross examination. his wife. Plaintiff presented the receipt of rentals he paid (Exhs. Atty.and he was never furnished a copy of the Deed of Sale and Transfer Certificate of Title. who ordered that the demolition be stopped. Actg. As to plaintiffs claim for damages. On redirect.. he was with Roldan (Building Inspector). (Ministry of Public Works and Highways). . inform Malabanan on the matter of his newly acquired citizenship. with a policeman that the demolition was stopped. that this was motivated by the incident on November 16. . he was not notified of the demolition. 1981 (Exh K). 1980 and October 2. . 1981 addressed to Leonida Senolos by Romulo del Rosario. and around 50 people came thereat. 1-Malabanan). Plaintiff together with Atty. he filed a complaint with the Ministry of Public Works and Highways by reason of which. Techico sent a reply to Atty. Plaintiff further testified that . 1979 (Exh. 1981.e. The formal letter was dated November 6. When Atty. At a later period. 1980. Sugay. Sugay's letter of February 17. Gaw Ching admitted that he did not make any counter-offer in writing so as to price the property. . Atty. May 13. with the Pacific Banking Corporation (Exh. plaintiff declared that after receiving the notice of the City Engineer." Gaw Ching still refused to vacate the premises because he was told that the building was still in good condition and he continued paying the monthly rental. 3). At about 3:00 p. and the City Hall official. He also admitted that he was furnished a copy of the Demolition Order (Exh. 1-Senolos) condemning the building. Atty. Sugay arrived at about 10:00 a. Sugay and Roldan went back to the City Hall. Plaintiff. the policeman remained but the demolition continued. 1981 (Exh.. Chief of Enforcement Division. Sugay came back with another person from the City Hall who presented a letter to Leonida Senolos to which defendant affixed her signature. 1981. Likewise. . On that same day. 14789 (Exh. 1980. plaintiff admitted that he received a letter from the Office of the City Engineer dated July 29. After exerting all efforts. . Gaw Ching however. Upon receipt of the letter. xxx xxx xxx Another witness presented by plaintiff was Felix Tienzo.

the order of demolition is unavailing. 1397. or undue influence. that order of demolition was valid only if there are no more tenants residing in the building. deceit and bad faith allegedly causing damage to respondent Gaw Ching. Petitioners were held liable jointly and severally to respondent for moral. the majority ruled that circumstances surrounding the sale of the land to petitioner Senolos had rendered that sale null and void. 1517 in relation to Presidential Proclamation No. except in case where the rights and obligations arising from the contract are not transmissible by their nature. Article 1397 of the Civil Code embodies that rule in the following formulation: Art. 3 In the instant Petitions for Certiorari. The action for the annulment of contracts may be instituted by all who are thereby obliged principally or subsidiarily. that land had already been sold to petitioner Senolos as early as August 1979 for only P1.176. The trial court declared that petitioner Malabanan had not violated Sections 4 and 6 of Presidential Decree No. nor can those who exerted intimidation.000. On the matter of the demolition of the building. By a vote of three (3) to two (2).xxx xxx xxx 1 On 10 August 1984. the majority held that the same was unwarranted and that even if petitioner Senolos had a demolition order.000. violence.00 worth of "moral. We believe that the Petitions must be granted. The majority were here referring to the finding that when petitioner Malabanan offered in October 1980 to sell the land involved to respondent Gaw Ching at P5.000. persons who are capable cannot allege the incapacity of those with whom they contracted. their assigns and heirs. 1893 and Letter of Instruction (LOI) No. Contracts take effect only between the parties. If there are tenants and they refused to vacate. 2 The majority also held that the transaction between petitioners was vitiated by fraud. exemplary and actual damages in the amount of P350. The trial court stressed that respondent Gaw Ching had been given ample opportunity to exercise any right of first refusal he might have had. . 1311. 935 which provide for a preemptive right on the part of a lessee over leased property. Respondent Gaw Ching went on appeal to the then Intermediate Appellate Court. exemplary and actual damages" to respondent Gaw Ching. However. 1981. the appellate court voted to reverse the decision of the trial court and hence to nullify the contract of sale between petitioners Malabanan and Senolos inter se. It could not rise higher than the Civil Code and the Rules of Court. petitioners assail both the annulment of the deed of sale and the grant of P350. 1767 and 1967. I The firmly settled rule is that strangers to a contract cannot sue either or both of the contracting parties to annul and set aside that contract. or caused mistake base their action upon these flaws of the contract.00 per square meter. (Emphasis supplied) Article 1397 itself follows from Article 1311 of the Civil Code which establishes the fundamental rule that: Art. the trial court rendered a decision which upheld the validity of the contract of sale between petitioner Malabanan and petitioner Senolos.48 per square meter.00 — for the indulgence in inequitous conduct to plaintiff-appellant's (respondent Gaw Ching) prejudice and for the unwarranted demolition of the building by defendants-appellees (petitioners herein) after the issuance of the cease-and-desist order on October 30. but he had chosen not to do so. While holding that the land in question was located outside the Urban Land Reform Zone declared by Proclamations Nos.000. or employed fraud.00 and for attorney's fees in the amount of P20.

The heir is not liable beyond the value of the property he received from the decedent. In Santos v. Hongkong & Shanghai Bank. according to the precedents established by the courts. therefore. In the first place. that is the determining reason of the right which lies in favor of the party obligated principally or subsidiarily to enable him to bring an action for the nullity of the contract in which he intervened. 5 Mr. No. this Court in Ibanez v. the person who is not a party to a contract nor has any cause of action or representation from those who intervened therein. 7 Even assuming for purposes of argument merely. a situation where a non-party to a contract could be allowed to bring an action for declaring that contract null: He who is not the party obligated principally or subsidiarily in a contract may perhaps be entitled to exercise an action for nullity. 4 pointed out that it is the existence of an interest in a particular contract that is the basis of one's right to sue for nullification of that contract and that essential interest in a given contract is. pronounced in cases requiring an application of the preinserted article 1302 of the Civil Code. In Ibanez. implementation of which might have no impact at all upon the plaintiff's rights and interests.D. admittedly a stranger to the contract of sale of a piece of land between petitioners Malabanan and Senolos inter se. What is important for present purposes is that respondent Gaw Ching. Court of Appeals. No. (Decisions of the Supreme Court of Spain. and November 23. of April 18. limitation upon the right of a person who is in fact injured by the very operation of a contract between two (2) third parties to sue to nullify that contract: that contract may be nullified only to the extent that such nullification is absolutely necessary to protect the plaintiff's lawful rights. in general. 1517. possessed only by one who is a party to the contract. The majority opinion of the appellate court itself explicitly found that the subject piece of land is locatedoutside the Urban Land Reform Zones declared pursuant to P. Mr. 8 this Court held that the preemptive or redemptive rights of a lessee under P. xxx xxx xxx (Emphasis supplied) As long ago as 1912. that is.D. is manifestly without right of action and personality such as to enable him to assail the validity of the contract. but. 1901. if he is prejudiced in his rights with respect to one of the contracting parties. Gaw Ching had no legal right of preemption in respect of the house and lot here involved. Gaw Ching would still not have been entitled to a right of preemption in respect of the land sold. 1517 exists only in respect of the urban land under lease on which the tenant or lessee had built his home and in which he had resided for ten . Justice Torres went on to indicate a possible qualification to the above general principle. 1903. that the land here involved was in fact embraced in a declared Urban Land Reform Zone (which it was not). and. it is indispensable to show the detriment which positively would result to him from the contract in which he had no intervention xxx xxx xxx (Emphasis supplied) There is an important and clear. does not fall within the possible exception recognized in Ibanez v. for. he who has no right in a contract is not entitled to prosecute an action for nullity. albeit implicit. It may be expected that in most instances. an injunction restraining the carrying out of acts in fact injurious to the plaintiff's rights would be sufficient and that there should be no need to set aside the contract itself which is a res inter alios acta and which may have any number of other provisions. Justice Torres wrote: From these legal provisions it is deduced that it is the interest had in a given contract.or by stipulation or by provision of law. Hongkong and Shanghai Bank. in order that such be the case.

exemplary and actual damages" not only because petitioners had "indulged in inequitous conduct to [respondent Gaw Ching's] prejudice" but also "for the unwarranted demolition of the building by [petitioners] after the issuance of the cease and desist order on October 30. This holding is simply bereft of any legal basis. 1096. In the second place. 10 Moreover. Sec. No fraud was thus worked upon him notwithstanding his insinuation that the sale of the land to petitioner Senolos had preceded the offer of the same piece of land to himself. assuming once again. it could only have been created by contract. This exercise of police power is not only being cordoned sanitaired [sic] by the doctrinal pronouncements.D. cannot attack the title of his lessor over the subject matter of the lease. 5 of the implementing Rules and Regulations of the National Building Code of the Philippines (P. that respondent Gaw Ching did have a preemptive right to purchase the land from petitioner Malabanan (which he did not). A lessee. The relevant conclusions of fact which the trial court arrived at are set out in its decision in the following manner: On the legality of the demolition necessarily raising the question: (3) whether or not plaintiff was notified within a reasonable period of time of the demolition." Here again. the lease contract between petitioner Malabanan and respondent Gaw Ching must in any case be held to have lapsed when the leased house was condemned and the order of demolition issued. it must be stressed that petitioner Malabanan did thrice offer the land to Gaw Ching but the latter had consistently refused to buy. the latter law does not authorize any person other than the . now marked as Exhibit "9" for the defendant Senolos. II We consider next petitioners' claim that the appellate court erred grievously in imposing upon them an award of P350. that preemptive or redemptive right was simply not available under the law. Since Gaw Ching did not in fact accept the offer to sell and did not buy the land. the provisions of Art. the claim of the plaintiff that the demolition of the house rented by him came as a surprise. A copy of the demolition order is attached to the complaint as Annex "L". 1517. In the third place. and contrary to the holding of the majority appellate court opinion. which office had not done anything to immediately forestall the imminent injury to person and damage to property.D. he suffered no prejudice.00 for "moral. the present action before the Court is procedurally and substantially correct in abating a nuisance. is fiercely contradicted by his own evidence. No. 1981. Sections 275 and 276 of the compilation of ordinances of the City of Manila but also by Rule VII. Verily. If such right existed at all. on October 5. Indeed. where both land and building belong to the lessor. Rule XII.000. by the sale of the same piece of land to petitioner Senolos. we are compelled to hold that the appellate court lapsed into reversible error. unmistakably show that plaintiff received a copy of the order of demolition from the City Engineer's Office. 482 in relation to Art. the fact that Gaw Ching had been lessee of the house and lot was simply not enough basis for a right to bring an action to set aside the contract of sale between the petitioners inter se. 9respondent Gaw Ching does not. par. Finally. had acquired a preferred right to purchase that property. for present purposes only. pretend that there had been such a contractual stipulation between him and petitioners. the validity of which was already being determined by the Court could be stopped by a pretenatural [sic] administrative order from the office of the Assistant Secretary for Operation of the MPWH brought about by an appeal by a person other than the owner of the building. and a fortioriwhether this admittedly exercise of police power. it is elementary. 436 of the Civil Code. outside the Urban Land Reform Zone or P. however.D. (Please seeP. We know of no law. 1981. and could not have suffered any prejudice. 5 thereof). In the first place. 1096).(10) years or more and that. in consequence. that grants such a right to a lessee no matter how long the period of the lease has been. approved by the Mayor. we are unable to understand the respondent appellate court's view that respondent Gaw Ching having been a long-time tenant of the property in question.

Understandably. Plaintiff strongly relies on the alleged illegal and indiscriminate destruction of his properties as basis for his claim for damages. rendering him so helpless. for it has defied reason and common sense. This is the position espoused by the City Legal Officer of Manila in defense of the City Engineer and the Mayor.owner. the basis for the claim for damages do not physically nor imaginatively exist. It therefore stands to reason that the order of demolition which is unquestionably legal could not be stopped by an inoperative administrative order. but by the lessee. and prompting him to just sit on the sidewalk and watch the demolition team wreck the building indiscriminately. as it was not as a consequence of an appeal by the owner of the building. causing their loss or destruction: It is readily explained that between October 5. The order was lawful as it was an abatement of a nuisance and the dismantling of the house owned by defendant Senolos could only be conceived as having been carried out in a manner consistent only with utmost care. The claim is almost too good to be true. caused the apprehension of the culprits. is certainly against the natural order of things and the legal presumption that a person takes great care of his concern. It would be sheer folly to assume that the demolition team would have taken a selective method of care for the still serviceable materials of the house and a destructive stance for the properties of the occupants. This is compounded by the failure of the MPWH to act assertively. the unorthodox position taken by plaintiff would not only lose his residence but also his place of business. and prevent the loss of his personal properties. Truth to tell. plaintiff could have avoided the misplaced fear. when it was ordered stopped thru an order inadvertently issued. which in a sense. 1981. and (e) steel box containing jewelries. On the claim for damages predicated on (4) whether or not there was an indscriminate careless handling and pilferage of the properties of the plaintiff. 11 We note that the majority opinion chose to disregard the above conclusions of fact of the trial court and instead quoted extensively from respondent Gaw Ching's brief and. secondly. the demolition. as it was filed only during the finishing touches of a demolition. which plaintiff did not do. Waiting idly by the sidewalk and watching your properties pilfered by persons whom you could have successfully identified at the time and referring the matter to the policeman on duty. could be interpreted as an admission that the issuance of the order was inopportune. The demolition was invariably a valid exercise of police power which may be ordered done by the authorities or caused to be done at the expense of the owner. in opposition to the move of the plaintiff to dismiss the order of demolition as improvidently issued. it has been established that there was a policeman detailed to the demolition scene from the start of the said demolition. presumably relied upon such brief The majority opinion. to whom he could have easily reported the matter. Decidedly. or for profit of the owner. failed to indicate why it preferred Gaw Ching's version of the facts set out in his brief over the trial court's findings. as alleged. was during its last stages. considering first. the move exude physiological features of delay. thirdly. he could have grabbed the steel box containing jewelries if this were the last thing he would have done. thereby causing destruction and loss of his personal properties. Conversely.1981. there was no suddenness or indiscriminate destruction of plaintiffs property nor pilferage thereof. however. to appeal the order of the City Engineer to the Ministry of Public Works and Highways. but assuming without having necessarily to concede that he was not able to guard against an actual demolition on November 6. 1981 to November 6. No indication was offered where the trial court had fallen . assuming that the appeal to the MPWH could validly be filed by the lessee. The exigency is made more demanding especially. By and large. such as: (a) office equipment. (c) machines. (b) assorted tools. its indiscriminate destruction is contrary to the interest of the defendant Senolos as it is a truism that every bit of useful material should be preserved either for use of. that these items were so huge that they could not be spirited away without being noticed and. in the demolition of the house owned by the defendant. (d) finished products.

13 It is worth noting that officials from the Office of the City Engineer. Gaw Ching had ample notice of the demolition order and had adequate time to remove his belongings from the premises if he was minded to obey the order for demolition.. respondent Gaw Ching. CV Nos.into error or what evidence had been misapprehended by it. No pronouncement as to costs. STEPHEN ROXAS. That application for preliminary injunction was denied by the trial court and the order for demolition was implemented only after such denial. 75919 May 7. GRACE LUISON and JOSE DE MAISIP. Ministry of Public Works and Highways. Thus. After some hesitation. In the case at bar. JJ." This letter. testified that it was not "normal practice to receive an order from the Ministry of Public Works and Highways stopping demolitions. in the action that he had filed before the Regional Trial Court of Manila to set aside the contract of sale between petitioners Malabanan and Senolos. Fernan C. Republic of the Philippines SUPREME COURT Manila EN BANC G. 05136-05137. the order of condemnation or demolition had been issued by the proper authorities which order was valid and subsisting at the time the demolition was actually carried out. The Court Resolved to GRANT the Petition and to REVERSE and SET ASIDE the Decision of the then Intermediate Appellate Court dated 31 January 1986 and its Resolution dated 5 June 1986.. What does appear from the record 12 is that Gaw Ching's counsel. R-81-416 and R-82-6798. If he did suffer any losses—the trial court did not believe his claims that he did—he had only himself to blame. COURT OF APPEALS. In the fifth place. Bidin J. Sugay. under Section 5.R. "directing this office to hold the demolition in abeyance. ET AL. CITY LAND DEVELOPMENT CORPORATION. In this situation. was served upon the demolition team on site while the demolition was in progress. took no part. petitioners.. No.J. the demolition was in fact stopped. vs. the Court considers that it must go back to the trial court's findings of fact in line with the time-honored rule that such findings are entitled to great respect from appellate courts since the trial court judge had the opportunity to examine the evidence directly and to listen to the witnesses and observe their demeanor while testifying. is hereby REINSTATED. even though he was not entitled to do so." In the fourth place. it was respondent Gaw Ching.D. City of Manila.3 of Rule VII entitled "Abandonment/Demolition of Buildings" of the Rules and Regulations Implementing the National Building Code of the Philippines (P. It does not even appear from the record whether or not Gaw Ching actually filed a formal appeal to the Secretary. to the Secretary of Public Works and Highways. by the owner of the building or installation to be demolished. there was no subsisting court order restraining the demolition at the time such demolition was carried out. He chose not to obey that order. Jr. which did not purport to set aside the order of demolition. ANDREW LUISON. 1987 MANCHESTER DEVELOPMENT CORPORATION.R. was able to obtain a letter dated 6 November 1981 from the Office of the City Engineer and Building Official. had sought preliminary injunction precisely to restrain the implementation of the order for demolition. Atty. as amended dated 19 February 1977). enclosing a xerox copy of a letter from the Assistant Secretary for Operations. Secondly. It appears therefore that firstly.. Gutierrez. 1096. and Cortés. respondents. No. . in ACG. concur. a lessee merely of the building condemned that sought to block the implementation of the demolition order. an order for demolition may be appealed. The Decision of the trial court dated 10 August 1984 in consolidated Civil Cases Nos. ACCORDINGLY.

When this under-re assessment of the filing fee in this case was brought to the attention of this Court together with similar other cases an investigation was immediately ordered by the Court. the prayer is for the issuance of a writ of preliminary prohibitory injunction during the pendency of the action against the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property in question. Thus. Ramolete. J. 5 3. the motion to refer the case to the Court en banc is granted but the motion to set the case for oral argument is denied. in the present case. 1985 for the . 6 In the present case there can be no such honest difference of opinion.Tanjuatco.00 for the sheriff's fee were paid.00 and P10. exemplary damages and attorney's fees arising therefrom in the amounts specified therein. The Magaspi case was an action for recovery of ownership and possession of a parcel of land with damages. to order defendants to execute a contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff. 1 They contend that the Court of Appeals erred in that the filing fee should be levied by considering the amount of damages sought in the original complaint. Oreta and Tanjuatco for petitioners. Petitioners in support of their contention that the filing fee must be assessed on the basis of the amended complaint cite the case of Magaspi vs. 4.000. RESOLUTION GANCAYCO. compensatory and exemplary damages as well as 25% of said amounts as maybe proved during the trial as attorney's fees and declaring the tender of payment of the purchase price of plaintiff valid and producing the effect of payment and to make the injunction permanent.00 which should be the basis of assessment of the filing fee.750. the prayer in the complaint seeks not only the annulment of title of the defendant to the property. Upon the filing of the complaint there was an honest difference of opinion as to the nature of the action in the Magaspi case. the docket fee of only P60. Although the total amount of damages sought is not stated in the prayer of the complaint yet it is spelled out in the body of the complaint totalling in the amount of P78. and after hearing. The amount of damages sought is not specified in the prayer although the body of the complaint alleges the total amount of over P78 Million as damages suffered by plaintiff. As maybe gleaned from the allegations of the complaint as well as the designation thereof. ordering defendants jointly and severally to pay plaintiff actual. The environmental facts of said case differ from the present in that — 1. In the Magaspi case. to attach such property of defendants that maybe sufficient to satisfy any judgment that maybe rendered. 3 2.: Acting on the motion for reconsideration of the resolution of the Second Division of January 28. 2While the present case is an action for torts and damages and specific performance with prayer for temporary restraining order. 4 However. Meanwhile plaintiff through another counsel with leave of court filed an amended complaint on September 12. it is both an action for damages and specific performance. the declaration of ownership and delivery of possession thereof to plaintiffs but also asks for the payment of actual moral. The complaint was considered as primarily an action for recovery of ownership and possession of a parcel of land.00 by considering the action to be merely one for specific performance where the amount involved is not capable of pecuniary estimation is obviously erroneous. etc. Pecabar Law Offices for private respondents.1987 and another motion to refer the case to and to be heard in oral argument by the Court En Banc filed by petitioners. The docket fee paid upon filing of complaint in the amount only of P410. The damages stated were treated as merely to the main cause of action.

11 In the present case no such honest difference of opinion was possible as the allegations of the complaint.000. the designation and the prayer show clearly that it is an action for damages and specific performance. 7 Still no amount of damages were specified in the prayer. The prayer in the original complaint was maintained. the trial court directed that the amount of damages be specified in the amended complaint. 9 In the Magaspi case. the order admitting the amended complaint and all subsequent proceedings and actions taken by the trial court are null and void. and attorney's fees prayed for to P100. After this Court issued an order on October 15. 8 An amended complaint was filed by plaintiff with leave of court to include the government of the Republic as defendant and reducing the amount of damages. even as this Court had taken cognizance of the anomaly and ordered an investigation.000.000. henceforth all complaints.104. Any pleading that fails to comply with this requirement shall not bib accepted nor admitted. the action was considered not only one for recovery of ownership but also for damages. nevertheless. 1985 the trial court directed plaintiffs to rectify the amended complaint by stating the amounts which they are asking for.00 as filing fee covering the damages alleged in the original complaint as it did not consider the damages to be merely an or incidental to the action for recovery of ownership and possession of real property. On the other hand. deleting all mention of the amount of damages being asked for in the body of the complaint. the allegations of damages in the amended complaint should be the basis of the computation of the filing fee. The design to avoid payment of the required docket fee is obvious. the trial court ordered the plaintiffs to pay the amount of P3." 10 Hence.assessment of the docket fee in the present case and other cases that were investigated. The Court serves warning that it will take drastic action upon a repetition of this unethical practice. The Court of Appeals therefore. petitioner through another counsel filed an amended complaint. . it was held that since the payment was the result of an "honest difference of opinion as to the correct amount to be paid as docket fee" the court "had acquired jurisdiction over the case and the proceedings thereafter had were proper and regular.inclusion of Philips Wire and Cable Corporation as co-plaintiff and by emanating any mention of the amount of damages in the body of the complaint. Said amended complaint was admitted. 13 For an legal purposes there is no such original complaint that was duly filed which could be amended.00 as docket fee. and said damages shall be considered in the assessment of the filing fees in any case. in the present case the trial court did not acquire jurisdiction over the case by the payment of only P410.000. Although the payment of the docketing fee of P60. It was only then that plaintiffs specified the amount of damages in the body of the complaint in the reduced amount of P10. answers and other similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer. To put a stop to this irregularity. so that the filing fee for the damages should be the basis of assessment. 12 Thus. This is clearly intended for no other purpose than to evade the payment of the correct filing fees if not to mislead the docket clerk in the assessment of the filing fee. that petitioners' counsel wrote the damages sought in the much reduced amount of P10. Neither can the amendment of the complaint thereby vest jurisdiction upon the Court. It was only when in obedience to the order of this Court of October 18. aptly ruled in the present case that the basis of assessment of the docket fee should be the amount of damages sought in the original complaint and not in the amended complaint.00. 1985 ordering the re. As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in court . This fraudulent practice was compounded when.000.00 was found to be insufficient.00. petitions. Consequently. 1985. in the Magaspi case. The docketing fee should be assessed by considering the amount of damages as alleged in the original complaint. Said amended complaint was also admitted.00 in the body of the complaint but not in the prayer thereof. or shall otherwise be expunged from the record. on November 12. as the amended complaint superseded the original complaint. The Court cannot close this case without making the observation that it frowns at the practice of counsel who filed the original complaint in this case of omitting any specification of the amount of damages in the prayer although the amount of over P78 million is alleged in the body of the complaint.

to the exclusion of Judge Castro. petitioner Sun Insurance Office. PHILIPPS and D. Presiding Judge. 79937-38 February 13. on March 28.J. Tanjuatco.B. the records of said case together with twenty-two other cases assigned to different branches of the Regional Trial Court of Quezon City which were under investigation for under-assessment of docket fees were transmitted to this Court. Quezon City and MANUEL CHUA UY PO TIONG. Metro Manila for the consignation of a premium refund on a fire insurance policy with a prayer for the judicial declaration of its nullity against private respondent Manuel Uy Po Tiong. Although the prayer in the complaint did not quantify the amount of damages sought said amount may be inferred from the body of the complaint to be about Fifty Million Pesos (P50. among others. a sala which was then vacant. Q-41177. attorney's fees. Branch 104. the motion for reconsideration is denied for lack of merit. J. much less the payment of the docket fee based on the amounts sought in the amended pleading. Romulo. Berenguer & Sanvicente Law Offices for private respondent. (SIOL for brevity) filed a complaint with the Regional Trial Court of Makati. 1984. Warby as additional defendants. the Court en banc issued a Resolution in Administrative Case No. (SIOL). Upon the order of this Court. Said objection was disregarded by respondent Judge Jose P. and thereafter including E. 1984. Republic of the Philippines SUPREME COURT Manila EN BANC G. the payment of actual. moral. Oreta. Nos. exemplary and liquidated damages. WARBY. Castro who was then presiding over said case. Mabanta.: Again the Court is asked to resolve the issue of whether or not a court acquires jurisdiction over a case when the correct and proper docket fee has not been paid. Tanjuatco. The complaint sought. 1985.B. Regional Trial Court. On October 15. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court.00). Q-41177 was re-raffled to Branch 104. SO ORDERED. HON. The ruling in the Magaspi case 14 in so far as it is inconsistent with this pronouncement is overturned and reversed. On February 28.The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. E. ASUNCION. Civil Case No. 1989 SUN INSURANCE OFFICE. respondents. private respondent filed a complaint in the Regional Trial Court of Quezon City for the refund of premiums and the issuance of a writ of preliminary attachment which was docketed as Civil Case No. LTD. 85-10-8752-RTC directing the judges in said cases to reassess the docket fees and that in case of deficiency. expenses of litigation and costs of the suit. Philipps and D. initially against petitioner SIOL.000. vs. to order its . Ltd.00 was paid by private respondent as docket fee which prompted petitioners' counsel to raise his objection.000. On the other hand. GANCAYCO. The Court thereafter returned the said records to the trial court with the directive that they be re-raffled to the other judges in Quezon City.R.J.. Private respondent as declared in default for failure to file the required answer within the reglementary period. Sayoc & De los Angeles Law Offices for petitioners. petitioners. compensatory. Only the amount of P210. MAXIMIANO C. Buenaventura. WHEREFORE.

On January 23. Judge Antonio P. 1986. Judge Maximiano C. 1988. On April 24. 1985. after his assumption into office on January 16.000.000. Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judie Asuncion dated January 24. to whom Civil Case No. to include the same in said certificate.70. an amended complaint was filed by private respondent including the two additional defendants aforestated. Solano.396. Judge Asuncion issued another Order admitting the second amended complaint and stating therein that the same constituted proper compliance with the Resolution of this Court and that a copy thereof should be furnished the Clerk of Court for the reassessment of the docket fees. On December 16. 1986. This was subsequently paid by private respondent. The Resolution also requires all clerks of court to issue certificates of re-assessment of docket fees. On August 30. 2 Hence.000.payment. to whose sala Civil Case No. Denying due course to the petition in CA-G. SP No. Q41177 was thereafter assigned. private respondent filed a supplemental complaint alleging an additional claim of P20. in case of deficiency.00 as d. but giving due course to the portion thereof questioning the reassessment of the docketing fee. 1985 since the pleadings filed by private respondent did not indicate the exact amount sought to be recovered. private respondent alleges actual and compensatory damages and attorney's fees in the total amount of about P44. 00 as actual compensatory damages" in the prayer. 1.000. On January 7.70. as follows: WHEREFORE. the instant petition. among others. Asuncion.432.000. the Court of Appeals rendered a decision ruling.90 on April 28. Q-41177 was temporarily assigned. 1986.601. On January 24. 1986.623.00.00 as actual and compensatory damages" amounted to P39. 1986.623. as amended. The reassessment by the Clerk of Court based on private respondent's claim of "not less than P10. 3 . In the body of the said second amended complaint however. or some seven months after filing the supplemental complaint. the private respondent paid the additional docket fee of P80.601. and requiring the Honorable respondent Court to reassess the docketing fee to be paid by private respondent on the basis of the amount of P25.00.786.qmages so the total claim amounts to about P64.707. On October 16.R. issuedan order to the Clerk of Court instructing him to issue a certificate of assessment of the docket fee paid by private respondent and.00 as docket fee.000. issued a Supplemental Order requiring the parties in the case to comment on the Clerk of Court's letter-report signifying her difficulty in complying with the Resolution of this Court of October 15. and (b) granting the writ of preliminary attachment.401. a cautionary answer was filed by petitioners. 1987. 1984. to forestall a default. During the pendency of this petition and in conformity with the said judgment of respondent court.1984. 1 On August 13. All litigants were likewise required to specify in their pleadings the amount sought to be recovered in their complaints. judgment is hereby rendered: 1. 09715 insofar as it seeks annulment of the order (a) denying petitioners' motion to dismiss the complaint. 1986. private respondent paid the additional docket fee of P62. private respondent filed a "Compliance" and a "Re-Amended Complaint" stating therein a claim of "not less than Pl0.

Pangasinan.00 for the docket fee. This Court ruled that the declaration was not filed in accordance with the legal requirement that such declaration should be filed at least one year before the filing of the petition for citizenship. 12 this Court reiterated the ruling in Malimit and Lee that a case is deemed filed only upon payment of the docket fee regardless of the actual date of its filing in court. It was an original petition for quo warranto contesting the right to office of proclaimed candidates which was mailed. Vasquez. On the basis of these facts.90 as docket fee as herein-above related. In support of their theory. However.00 to complete the amount of the docket fee only fourteen (14) days later. much less the payment of the docket fee based on the amounts sought in the amended pleading. Ramolete. Statutes regulating the procedure of the courts will be construed as applicable to actions pending and undetermined at the time of their passage. The contention that Manchester cannot apply retroactively to this case is untenable. Q-41177 on the ground of nonpayment of the correct and proper docket fee. Again. The ruling in the Magaspi Case in so far as it is inconsistent with this pronouncement is overturned and reversed. private respondent avers that what is applicable is the ruling of this Court in Magaspi v. within the reglementary period of appeal of five (5) days after receiving notice of judgment.601. addressed to the clerk of the Court of First Instance. the required docket fees were paid only after the expiration of said period. Citing Lazaro. Then in Magaspi. Endencia and Andres. Degamo. Q41177 for at the time said civil case was filed in court there was no such Manchester ruling as yet.49. we also held that said rule is not applicable when petitioner seeks the probate of several wills of the same decedent as he is not required to file a separate action for each will but instead he may have other wills probated in the same special proceeding then pending before the same court. petitioners cite the latest ruling of the Court in Manchester Development Corporation vs. more or less. Not having paid the same. 9 the same principles enunciated in Lazaro and Lee were applied. barely 5V2 months prior to the filing of the petition for citizenship. instead of P16. Procedural laws are retrospective in that sense and to that extent. Plaintiff deposited the additional P8. 1956. the plaintiff filed a notice of appeal with said court but he deposited only P8. after notice of a judgment dismissing the case.824. this Court held that the date of such payment must be deemed to be the real date of filing of aforesaid petition and not the date when it was mailed. Republic.623. 11 this Court reiterated the rule that the docket fee must be paid before a court will act on a petition or complaint. 5 wherein this Court held that the trial court acquired jurisdiction over the case even if the docket fee paid was insufficient. and considering that the total amount sought to be recovered in the amended and supplemental complaint is P64. On the other hand. Further. 6 In Lazaro vs. 1953 produced no legal effect until the required filing fee was paid on May 23. In Malimit vs. petitioners contend that the complaint should be dismissed and all incidents arising therefrom should be annulled. within the one-week period after the proclamation as provided therefor by law. Petitioners allege that while it may be true that private respondent had paid the amount of P182. 10However.810. 7 this Court held that the payment of the full amount of the docket fee is an indispensable step for the perfection of an appeal. this court held that the Court of First Instance did notacquire jurisdiction to hear and determine the appeal as the appeal was not thereby perfected. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court. In a forcible entry and detainer case before the justice of the peace court of Manaoag. in Garica vs.The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did not acquire jurisdiction over Civil Case No. Consequently. 8 the petitioner filed a verified declaration of intention to become a Filipino citizen by sending it through registered mail to the Office of the Solicitor General in 1953 but the required filing fee was paid only in 1956. private respondent claims that the ruling in Manchester cannot apply retroactively to Civil Case No. 4 as follows: The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. Said case involved a complaint for . In Lee vs.00 as required.70 the docket fee that should be paid by private respondent is P257. this Court concluded that the filing of petitioner's declaration of intention on October 23. CA.

It was also prayed that plaintiff be declared as owner thereof to whom the proper title should be issued.00 was correct. for damages. The plaintiff then filed a motion to admit the amended complaint to include the Republic as the defendant. plaintiff through another counsel. the attachment of such property of defendants that may be sufficient to satisfy any judgment that may be rendered. Upon the payment of P60.00 for the docket fee based on the nature of the action for specific performance where the amount involved is not capable of pecuniary estimation. However. The plaintiff also asked the trial court to declare the tender of payment of the purchase price of plaintiff valid and sufficient for purposes of payment. although the same was not spelled out in the prayer of the complaint. the costs of the action and exemplary damages in the amount of P500.00 and the costs of the action.104. the complaint was docketed as Civil Case No. etc.00 as moral damages. The amended prayer merely sought moral damages as the court may determine. It was also prayed that the defendants be made to pay the plaintiff jointly and severally. the plaintiff paid the amount of only P410.00 for the docket fee and P10. 1985 by the inclusion of another co-plaintiff and eliminating any mention of the amount of damages in the body of the complaint. the amended complaint was admitted by the trial court. In Magaspi.000. We upheld the assessment of the additional docket fee based on the damages alleged in the amended complaint as against the assessment of the trial court which was based on the damages alleged in the original complaint. The amount of damages sought is not specified in the prayer although the body of the complaint alleges the total amount of over P78 Millon allegedly suffered by plaintiff. and that as the action is also one. Manchester involves an action for torts and damages and specific performance with a prayer for the issuance of a temporary restraining order.00. In the prayer of the amended complaint the exemplary damages earlier sought was eliminated. The question posed.00 as filing fee. Plaintiff alleged that he paid the total docket fee in the amount of P60. was whether or not the plaintiff may be considered to have filed the case even if the docketing fee paid was not sufficient.00 and that if he has to pay the additional fee it must be based on the amended complaint. and. Meanwhile. The prayer in said case is for the issuance of a writ of preliminary prohibitory injunction during the pendency of the action against the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property in question.00 for the sheriffs fee. R-11882. 1948 up to the time the property is delivered to plaintiff. However. actual. and that defendant be made to pay monthly rentals of P3.00 was the correct docketing fee. attorney's fees of P100. The defendant filed an opposition to the amended complaint. The opposition notwithstanding. P500. after hearing. and to make the injunction permanent. Upon the filing of the complaint.000. filed an amended complaint on September 12. . The trial court ordered the plaintiff to pay P3. Thus. therefore. compensatory and exemplary damages as well as 25% of said amounts as may be proved during the trial for attorney's fees. this Court overturned Magaspi in Manchester. the issuance of an order requiring defendants to execute a contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff.000. The prayer of the complaint sought that the Transfer Certificate of Title issued in the name of the defendant be declared as null and void.500.00 from June 2. it was obvious from the allegations of the complaint as well as its designation that the action was one for damages and specific performance. The prayer in the original complaint was maintained. as aforecited. with leave of court.00. this court held the plaintiff must be assessed the correct docket fee computed against the amount of damages of about P78 Million. attorney's fees in the amount of P250. The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket fee to which an opposition was filed by the plaintiff alleging that the action was for the recovery of a parcel of land so the docket fee must be based on its assessed value and that the amount of P60.recovery of ownership and possession of a parcel of land with damages filed in the Court of First Instance of Cebu.000. We reiterated the rule that the case was deemed filed only upon the payment of the correct amount for the docket fee regardless of the actual date of the filing of the complaint. that there was an honest difference of opinion as to the correct amount to be paid as docket fee in that as the action appears to be one for the recovery of property the docket fee of P60. The trial court reiterated its order for the payment of the additional docket fee which plaintiff assailed and then challenged before this Court.

the amount of damages asked for was not stated.On October 15. on April 28. as above discussed.00 in damages so that his total claim is approximately P64. Consequently. Thus.70. Applying the principle in Magaspi that "the case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in court.00 but still no amount of damages was specified in the prayer. After the promulgation of the decision of the respondent court on August 31. On November 12.620. The principle in Manchester could very well be applied in the present case." this Court held that the trial court did not acquire jurisdiction over the case by payment of only P410.00 for the docket fee. 1986. 1985.000. The promulgation of the decision in Manchester must have had that sobering influence on private respondent who thus paid the additional docket fee as ordered by the respondent court.601. petitioner did not pay any additional docket fee until] the case was decided by this Court on May 7. and after the promulgation of Manchester. 1987.49.620. if any amount is found due. in Manchester. unlike Manchester.000.00 as actual and exemplary damages but in the body of the complaint the amount of his pecuniary claim is approximately P44.000. he must require the private respondent to pay the same. In the prayer. and during the pendency of this petition. On January 23. For all legal purposes there was no such original complaint duly filed which could be amended. petitioners contend that the docket fee that was paid is still insufficient considering the total amount of the claim. thereafter. the total amount of damages sought amounted to about P50 Million.396.601. In the body of the complaint the amount of damages alleged was reduced to P10.810.000.70. Nevertheless.00 was paid for the docket fee. a more liberal interpretation of the rules is called for considering that. 1985. is among the several cases of under-assessment of docket fee which were investigated by this Court together with Manchester.824.601. this Court ordered the re-assessment of the docket fee in the said case and other cases that were investigated. in Manchester. 13 The present case. petitioner insists that private respondent must pay a docket fee of P257.000. the Court rules as follows: .623. private respondent filed an amended complaint wherein in the prayer it is asked that he be awarded no less than P10. 1986. Said amended complaint was admitted and the private respondent was reassessed the additional docket fee of P39. 1988. Said amended complaint was admitted.00 in damages. The amount of only P210. the order admitting the amended complaint and all subsequent proceedings and actions taken by the trial court were declared null and void. private respondent filed a supplemental complaint alleging an additional claim of P20.000. The pattern and the intent to defraud the government of the docket fee due it is obvious not only in the filing of the original complaint but also in the filing of the second amended complaint. 1986.132. the trial court directed the plaintiff to rectify the amended complaint by stating the amounts which they were asking for. This plaintiff did as instructed.00.90 for the docket fee considering the total amount of his claim in the amended and supplemental complaint amounting to about P64. 1987 wherein private respondent was ordered to be reassessed for additional docket fee. Although private respondent appears to have paid a total amount of P182. private respondent demonstrated his willingness to abide by the rules by paying the additional docket fees as required. In the present case. On April 24. Thus. The action was for the refund of the premium and the issuance of the writ of preliminary attachment with damages.92. In the body of the original complaint. However. private respondent paid an additional docket fee of P62.00 based on his prayer of not less than P10. This is a matter which the clerk of court of the lower court and/or his duly authorized docket clerk or clerk in-charge should determine and. due to the fraud committed on the government. On October 16. Neither can the amendment of the complaint thereby vest jurisdiction upon the Court.786. It triggered his change of stance by manifesting his willingness to pay such additional docket fee as may be ordered.000.000. which he paid. this Court held that the court a quo did not acquire jurisdiction over the case and that the amended complaint could not have been admitted inasmuch as the original complaint was null and void.70. The facts and circumstances of this case are similar toManchester. private respondent paid an additional docket fee of P80.

WHEREFORE. 1994 Decision1 and June 30.. Quezon City. As a result. The dispositive portion of the CA decision reads: IN VIEW OF ALL THE FOREGOING. but the payment of the prescribed docket fee. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but. COURT OF APPEALS.: Before the Court is a petition for review assailing the May 20. The Clerk of Court of the court a quo is hereby instructed to reassess and determine the additional filing fee that should be paid by private respondent considering the total amount of the claim sought in the original complaint and the supplemental complaint as may be gleaned from the allegations and the prayer thereof and to require private respondent to pay the deficiency. 116121 July 18. the decision appealed from is SET ASIDE and REVERSED and the complaint in this case is ordered DISMISSED. The complaint for damages arose from the collision of a passenger jeepney and a truck at around 7:00 o’clock in the evening of June 14. represented by Ruben Reinoso Jr. third party claims and similar pleadings.R. 2011 THE HEIRS OF THE LATE RUBEN REINOSO. SR. Rodriguez Avenue. 1994 Resolution2 of the Court of Appeals (CA). vs. in CA-G.R. 1979 along E. 19395. Manila (RTC) for non-payment of docket fees. the judgment awards a claim not specified in the pleading. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee. The same rule applies to permissive counterclaims. without pronouncement as to costs. J. No costs pronouncement.** Respondent. CV No. and FILWRITERS GUARANTY ASSURANCE CORPORATION. 2. JOSE GUBALLA.1. which shall not be considered filed until and unless the filing fee prescribed therefor is paid. the additional filing fee therefor shall constitute a lien on the judgment. that vests a trial court with jurisdiction over the subject matter or nature of the action. It is not simply the filing of the complaint or appropriate initiatory pleading. 1988 Decision of the Regional Trial Court. No. a passenger of . the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. SO ORDERED. Petitioners. SO ORDERED. PONCIANO TAPALES. which set aside the March 22. 3. DECISION MENDOZA. subsequently. or if specified the same has been left for determination by the court. Branch 8. if any. the petition is DISMISSED for lack of merit. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee..

00 per day) and for two (2) months jeepney stayed at the repair shop……………………………………….00 only per year) & victim then being 55 at death had ten (10) years life expectancy……………………………………………… 120. Exemplary damages …………………. hence. Exemplary damages ………………………………… 6.000. was killed. Ruben Reinoso. Attorney’s fees………………………… or a total of 15.00 25. On November 7.000. Mortuary. Attorney’s fees ……………………………………… Or a total of For damages to property: In favor of defendant Ponciano Tapales and against defendant Jose Guballa: 1.the jeepney. ……………… P 30. reads: In favor of herein plaintiffs and against defendant Jose Guballa: 1.. Moral damages ……………………………………. Moral damages ……………………….000. 5. Litigation expenses …………………………………. (Reinoso). 4. The decision in part. The passenger jeepney was owned by Ponciano Tapales (Tapales) and driven by Alejandro Santos (Santos).000.000. Compensatory damages (earnings at P 150. 1-GTapales).00 10. while the truck was owned by Jose Guballa (Guballa) and driven by Mariano Geronimo (Geronimo).000. 3.00 25. 5. 7. cannot recover twice. 2. Loss of earnings (monthly income at the time of death (P 2..000.00 Court used P 1. Bulacan (Vide: Exh. 9. Medical & funeral expenses and all incidental expenses in the wake in serving those who condoled ………… 4.000. 1988.000.00 10. 1979. the heirs of Reinoso (petitioners) filed a complaint for damages against Tapales and Guballa.00 15.00 P 250. For the death of Ruben Reinoso.000. RTC-Malolos.000.00 .00 P 44.00 15.000. the RTC rendered a decision in favor of the petitioners and against Guballa.000.000. Sr.000.000. Sr. In turn. Actual damages for repair is already awarded to defendant-cross-claimant Ponciano Tapales by Br..00 P 9. Guballa filed a third party complaint against Filwriters Guaranty Assurance Corporation (FGAC) under Policy Number OV-09527.00 only per month (or P 12.00 50.00 3.00 2. On March 22.

anchored on the following GROUNDS: A.000. In favor of defendant Ponciano Tapales due to damage of his passenger jeepney ………….00. it is the well considered view of the Court that plaintiffs.P250. JUDGMENT WHEREFORE. set aside and reversed the RTC decision and dismissed the complaint on the ground of non-payment of docket fees pursuant to the doctrine laid down in Manchester v. 1994. They plead that though this Court stated that failure to state the correct amount of damages would lead to the dismissal of the complaint.4 In addition. Moreover. 1994. Court of Appeals to this case. Tomol. The issues of the case revolve around the more substantial issue as to the negligence of the private respondents and their culpability to petitioners. because the amount of the lost income would still be finally determined in the course of the trial of the case. The issue on the specification of the damages appearing in the prayer of the Complaint was NEVER PLACED IN ISSUE BY ANY OF THE PARTIES IN THE COURT OF ORIGIN (REGIONAL TRIAL COURT) NOR IN THE COURT OF APPEALS. said doctrine should be applied prospectively.3 On appeal."7 The petitioners argue that the ruling in Manchester should not have been applied retroactively in this case. Costs of suit. the petitioners assert that at the time of the filing of the complaint in 1979. The Court of Appeals MISAPPLIED THE RULING of the Supreme Court in the case of Manchester Corporation vs. 139 SCRA 260. C. In favor of defendant Jose Guballa under Policy No. in its Decision dated May 20. Totality of evidence preponderance in their favor.00 undertaking plus P 10. OV-09527………………………………… P60.000. the Court hereby renders judgment in favor of said 3rd party plaintiff by way of 3rd party liability under policy No. petitioners could no longer pay the required docket fees. B. Sr………………………………………….000. the CA ruled that since prescription had set in. judgment is hereby rendered as follows: In favor of plaintiffs for the death of Ruben Reinoso. the CA. P44. For all the foregoing.6 Hence.Under the 3rd party complaint against 3rd party defendant Filwriters Guaranty Assurance Corporation.00. in view of the foregoing. and finally.000. they were not certain of the amount of damages they were entitled to.000. CA. They claim that the jurisdiction of the trial court remains even if there was failure to pay the correct filing fee as long as the correct amount would be paid subsequently. since it was filed prior to the promulgation of the Manchester decision in 1987.00 as and for attorney’s fees. SO ORDERED. defendant Ponciano Tapales and 3rd Party plaintiff Jose Guballa established their claims as specified above. respectively. this appeal. All the specified accounts with 6% legal rate of interest per annum from date of complaint until fully paid (Reformina vs. . OV-09527 in the amount of P 50.00.5 Petitioners filed a motion for reconsideration of the CA decision but it was denied in a resolution dated June 30.

Even if said ruling could be applied retroactively. In the case of La Salette College v.19 it was stated that the "intent of the Court is clear to afford litigants full opportunity to comply with the new rules and to temper enforcement of sanctions in view of the recencyof the changes introduced by the new rules. Ltd. such power should be used by the court in conjunction with its exercise of sound discretion in accordance with the tenets of justice and fair play. and not the strict regulations set in Manchester. the court may allow payment of the fee within a reasonable period of time. a greater demand for resolving genuine disputes fairly and equitably. the liberal doctrine enunciated in Sun Insurance Office. While it was at that level. Court of Appeals17 and Spouses Jimmy and Patri Chan v. conscientiously guided by the norm that. on the balance. there is. shorn of judicial discretion. It was only the CA which motu propio dismissed the case for said reason.14 While there is a crying need to unclog court dockets on the one hand. will apply. v. The strict application of this rule was. Courts are not slaves to or robots of technical rules.16 The Court also takes into account the fact that the case was filed before the Manchester ruling came out.15 for it is far better to dispose of a case on the merit which is a primordial end. We held in another case: x x x It bears stressing that the rules of procedure are merely tools designed to facilitate the attainment of justice. Mangubat (Mactan). second. Court of Appeals. in the more recent case of United Overseas Bank v. it cannot be denied that the case was litigated before the RTC and said trial court had already rendered a decision. there is a need to suspend the strict application of the rules so that the petitioners would be able to fully and finally prosecute their claim on the merits at the appellate level rather than fail to secure justice on a technicality.10 wherein the Court decreed that where the initiatory pleading is not accompanied by the payment of the docket fee. allowed the relaxation of the rule on non-payment of docket fees in order to afford the parties the opportunity to fully ventilate their cases on the merits. liberality should be accorded to the petitioners in view of the recency then of the ruling. This ruling was made on the premise that the plaintiff had demonstrated his willingness to abide by the rules by paying the additional docket fees required." In Mactan. the Office of the Solicitor General (OSG) also failed to pay the correct docket fees on time. Ltd. as they ought to be.. rather than on a technicality that may result in injustice.11 Thus. on the other. dismissal. They were conceived and promulgated to effectively aid the court in the dispensation of justice.13the Court stated: Notwithstanding the mandatory nature of the requirement of payment of appellate docket fees. The Court finds merit in the petition. bearing always in mind that procedure is not to hinder but to promote the administration of justice. courts have always been. however. Leniency because of recency was applied to the cases of Far Eastern Shipping Company v. but in no case beyond the applicable prescriptive or reglementary period. Thus. the general objective of procedure is to facilitate the application of justice to the rival claims of contending parties. if the application of the Rules would . In this case.12 the Court explained that where the party does not deliberately intend to defraud the court in payment of docket fees. for. 8 In Manchester v. Ros. It has been on record that the Court. we also recognize that its strict application is qualified by the following: first. Asuncion.9 it was held that a court acquires jurisdiction over any case only upon the payment of the prescribed docket fee.Finally. Pilotin. and manifests its willingness to abide by the rules by paying additional docket fees when required by the court.18 In the case of Mactan Cebu International Airport Authority v. technicalities take a backseat against substantive rights. and not the other way around. indeed. In rendering justice. the matter of non-payment of docket fees was never an issue. relaxed two (2) years after in the case ofSun Insurance Office. failure to pay those fees within the reglementary period allows only discretionary. RTC of Zamboanga. as well as with a great deal of circumspection in consideration of all attendant circumstances. Considering the foregoing. The rule is that payment in full of the docket fees within the prescribed period is mandatory. not automatic. in several instances. the petitioners stress that the alleged defect was never put in issue either in the RTC or in the CA.

every vehicle shall be conducted to the right of the center of the intersection of the highway. 2. the left side portion of the road in an attempt to avoid a wooden barricade. As the Court has taken the position that it would be grossly unjust if petitioners’ claim would be dismissed on a strict application of the Manchester doctrine. or because of unreasonable difficulty of operation in compliance therewith. 4 westward bound towards Ortigas Avenue at between 30-40 kms. The Land Transportation and Traffic Rule (R. 37. the appropriate action.tend to frustrate rather than promote justice. 6. – Where the court in its final judgment awards a claim not alleged. Rodriguez Avenue. it is always within the power of the Court to suspend the Rules. . that the case at bench has been pending for more than 30 years and the records thereof are already before this Court. however.20 The petitioners. the Court will resolve the case on the merits.A. the headlights of which the former had seen while still at a distance of about 30-40 meters from the wooden barricade astride lanes 1 and 2. and when turning to the left in going from one highway to another. are liable for the difference between the actual fees paid and the correct payable docket fees to be assessed by the clerk of court which shall constitute a lien on the judgment pursuant to Section 2 of Rule 141 which provides: SEC. reads as follows: "Sec. Sept. 1984) the "sand & gravel" truck from the opposite direction driven by Mariano Geronimo. however. died as a result of the collision of a jeepney and a truck on June 14. and to the left when overtaking persons or vehicles going the same direction. the jeepney passenger. and encroached on. (plaintiffs’ and Tapales’ witness) that while running on lane No. Based on the sketch and spot report of the police authorities and the narration of thejeepney driver and his passengers. 4 & 5-Tapales. Driving on right side of highway. The passengers of the jeepney and its driver were injured including two passengers who died. upon reaching said wooden block suddenly swerved to the left into lanes 3 and 4 at high speed "napakabilis po ng dating ng truck. 26. In the higher interest of substantial justice and to spare the parties from further delay. the party concerned shall pay the additional fees which shall constitute a lien on the judgment in satisfaction of said lien. The analysis of the RTC appears in its decision as follows: Perusal and careful analysis of evidence adduced as well as proper consideration of all the circumstances and factors bearing on the issue as to who is responsible for the instant vehicular mishap convince and persuade this Court that preponderance of proof is in favor of plaintiffs and defendant Ponciano Tapales." Having in mind the foregoing provision of law. The facts are beyond dispute. records) taken while at the repair shop. The clerk of court shall assess and collect the corresponding fees. Sept. would be for the Court to remand the case to the CA. 1979 at around 7:00 o’clock in the evening along E. a remand of the case to the CA would only unnecessarily prolong its resolution. pages 331-332. The greater mass of evidence spread on the records and its influence support plaintiffs’ plaint including that of defendant Tapales. hitting the passenger jeepney as a consequence. or except a particular case from its operation. every person operating a motor vehicle or an animal drawn vehicle on highway shall pass to the right when meeting persons or vehicles coming toward him. The left side of the jeepney suffered considerable damage as seen in the picture (Exhs. 4136). Fees in lien. 1985)." (29 tsn. the collision was brought about because the truck driver suddenly swerved to. Reinoso. Jan. Quezon City. 26. per hour (63-64 tsn. this Court is convinced of the veracity of the version of the passenger jeepney driver Alejandro Santos. person or property. No. or more than that claimed in the pleading. – Unless a different course of action is required in the interest of the safety and the security of life. Considering. 1985) in the process hitting them (Jeepney passenger) at the left side up to where the reserve tire was in an oblique manner "pahilis" (57 tsn. under ordinary circumstances. It was established that the primary cause of the injury or damage was the negligence of the truck driver who was driving it at a very fast pace. or a relief different from. The jeepney after it was bumped by the truck due to the strong impact was thrown "resting on its right side while the left side was on top of the Bangketa (side walk)".

the Certified Copy found on pages 598-600. 2176 is demandable not only for one’s own acts or omissions but also for those of persons for whom one is responsible. R-a30. xxxx The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. J9-450. Amaba. Traffic Division. provides: Art. Rev.21 1awphi1 While ending up on the opposite lane is not conclusive proof of fault in automobile collisions. at that time. the front portion of the truck hit the left middle side portion of the passenger jeepney. When the truck reached a certain point near the Meralco Post No. there instantly arises a presumptionjuris tantum that the employer failed to exercise diligentissimi patris families in the selection or . 4 and showing how the ‘gavel & sand’ truck is positioned in relation to the jeepney. The rule that official duty had been performed (Sec. R-131. Whoever by act or omission causes damage to another.The Court is convinced of the narration of Santos to the effect that the "gravel & sand" truck was running in high speed on the good portion of E. 7-B-Tapales. Rodriguez Avenue was under repair and a wooden barricade was placed in the middle thereof. Rodriguez. in relation to Article 2180 of the Civil Code. and also Sec. as depicted in the sketch of the police officers. certified copy of which is on page 594. 7-A. 2180.22 the position of the two vehicles. xxxx Employers shall be liable for the damage caused by their employees and household helpers acting within the scope of their assigned tasks even though the former are not engaged in any business or industry. Rules of Court) – there being no evidence adduced and made of record to the contrary – is that said circumstance involving the two vehicles had been the result of an official investigation and must be taken as true by this Court. 38. Article 2176. 4 and even during the moments before said bumping. heading towards Santolan Street. clearly shows that it was the truck that hit the jeepney. NPD. Rodriguez Avenue (lane 1 & 2) before the wooden barricade and (having in mind that it had just delivered its load at the Corinthian Gardens) so that when suddenly confronted with the wooden obstacle before it had to avoid the same in a manner of a reflex reaction or knee-jerk response by forthwith swerving to his left into the right lanes (lanes 3 & 4). xxxx Art. Such fault or negligence. F. The evidentiary records disclosed that the truck was speeding along E. because. 166-168. The narration of Santos and Mondalia are convincing and consistent in depicting the true facts of the case untainted by vacillation and therefore. 7. The said police sketch having been made right after the accident is a piece of evidence worthy to be relied upon showing the true facts of the bumping-occurrence. is called a quasi-delict and is governed by the provisions of this Chapter. Reyes marked as Exhs. moving at moderate speed thereon since lane No. there being fault or negligence is obliged to pay for the damage done. 8-Tapales on page 169. Guballa. if there is no pre-existing contractual relation between the parties. ibid) indicating the fact that the bumping indeed occurred at lane No. Quezon City who rushed to the scene of the mishap (Vide: Resolution of Asst fiscal Elizabeth B.5(m). ibid. worthy to be relied upon. 2176. the jeepney was running on its right lane No. records. Their story is forfeited and confirmed by the sketch drawn by the investigating officer Pfc. a portion of E. Amaba. Whenever an employee’s negligence causes damage or injury to another. The obligation imposed by Art. marked as Exh. 3 was then somewhat rough because being repaired also according to Mondalia who has no reason to prevaricate being herself one of those seriously injured. The Court likewise sustains the finding of the RTC that the truck owner. pp. ibid. with the attached police sketch of Pfc. At the time of the bumping. causing damage to both vehicles and injuries to the driver and passengers of the jeepney. failed to rebut the presumption of negligence in the hiring and supervision of his employee. while the passenger jeepney was coming from the opposite direction. The truck driver should have been more careful.

Branch 8. and impose disciplinary measures for breaches thereof. water. 1994 Decision and June 30. July 17.24 Thus. 1994 Resolution of the Court of Appeals are REVERSED and SET ASIDE and the March 22. the petition is GRANTED. that whenever his trucks gets out of the compound to make deliveries. This was all which he considered as selection and supervision in compliance with the law to free himself from any responsibility. The May 20. employers must formulate standard operating procedures. brakes. With respect to the supervision of employees. As expected. in the selection of prospective employees. 1986). These facts must be shown by concrete proof.supervision of his employee. This Court then cannot consider the foregoing as equivalent to an exercise of all the care of a good father of a family in the selection and supervision of his driver Mariano Geronimo. horn (9 tsn. is REINSTATED. including documentary evidence. experience and service record. ibid). It ruled: x x x. and that Geronimo had been driving for him sometime in 1976 until the collision in litigation came about (5-6 tsn. . the RTC committed no error in finding that the evidence presented by respondent Guballa was wanting. gasoline.23 Thus. 1988 Decision of the Regional Trial Court. SO ORDERED. attempted to overthrow this presumption of negligence by showing that he had exercised the due diligence required of him by seeing to it that the driver must check the vital parts of the vehicle he is assigned to before he leaves the compound like the oil. monitor their implementation. employers are required to examine them as to their qualification. defendant Jose Guballa. it is always accompanied with two (2) helpers (16-17 tsn."25 WHEREFORE. Manila. ibid).