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Heirs of Reinoso Sr.

v CA
G.R. No. 116121 July 18 2011

4. Moral damages ..


5. Exemplary damages


The complaint for damages arose from the collision of a

passenger jeepney and a truck at around 7:00 oclock in the
evening of June 14, 1979 along E. Rodriguez Avenue,
Quezon City. As a result, a passenger of the jeepney, Ruben
Reinoso, Sr. (Reinoso), was killed. The
passenger jeepney was owned by Ponciano
Tapales (Tapales)and driven by Alejandro Santos (Santos),
while the truck was owned by Jose Guballa (Guballa) and
driven by Mariano Geronimo (Geronimo).

6. Litigation expenses .


7. Attorneys fees


Or a total of

P 250,000.

On November 7, 1979, the heirs of

Reinoso (petitioners) filed a complaint for damages against
Tapales and Guballa. In turn, Guballa filed a third party
complaint against Filwriters Guaranty Assurance Corporation
(FGAC) under Policy Number OV-09527.
On March 22, 1988, the RTC rendered a decision in favor of
the petitioners and against Guballa. The decision in part,
In favor of herein plaintiffs and against defendant Jose

1. For the death of Ruben Reinoso, Sr.

2. Loss of earnings (monthly income at the time of
death (P 2,000.00 Court used P 1,000.00 only per
month (or P 12,000.00 only per year) & victim
then being 55 at death had ten (10) years life
3. Mortuary, Medical & funeral expenses and all
incidental expenses in the wake in serving those
who condoled

P 30,000.0

For damages to property:

In favor of defendant Ponciano Tapales and against
defendant Jose Guballa:
1. Actual damages for repair is already awarded to
defendant-cross-claimant Ponciano Tapales by Br.
9, RTC-Malolos, Bulacan (Vide: Exh. 1-G-Tapales);
hence, cannot recover twice.
2. Compensatory damages (earnings at P 150.00 per
day) and for two (2) months jeepney stayed at the
repair shop.



P 9,000.0

Moral damages ...


Exemplary damages .


Attorneys fees


or a total of

P 44,000.

Under the 3rd party complaint against 3rd party defendant

Filwriters Guaranty Assurance Corporation, the Court hereby
renders judgment in favor of said 3rd party plaintiff by way
of 3rd party liability under policy No. OV-09527 in the
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amount of P 50,000.00 undertaking plus P 10,000.00 as and

for attorneys fees.
For all the foregoing, it is the well considered view of the
Court that plaintiffs, defendant Ponciano Tapales and 3rd
Party plaintiff Jose Guballa established their claims as
specified above, respectively. Totality of evidence
preponderance in their favor.

Petitioners filed a motion for reconsideration of the CA

decision but it was denied in a resolution dated June 30,
1994.6 Hence, this appeal, anchored on the following
A. The Court of Appeals MISAPPLIED THE RULING of
the Supreme Court in the case of Manchester
Corporation vs. Court of Appeals to this case.

WHEREFORE, in view of the foregoing, judgment is hereby
rendered as follows:
In favor of plaintiffs for the death of Ruben Reinoso,
In favor of defendant Ponciano Tapales due to damage of his
passenger jeepney . P44,000.00;
In favor of defendant Jose Guballa under Policy No. OV09527 P60,000.00;
All the specified accounts with 6% legal rate of interest per
annum from date of complaint until fully paid (Reformina vs.
Tomol, 139 SCRA 260; and finally;
Costs of suit.
On appeal, the CA, in its Decision dated May 20, 1994, 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. CA.4 In
addition, the CA ruled that since prescription had set in,
petitioners could no longer pay the required docket fees.5

B. The issue on the specification of the damages

appearing in the prayer of the Complaint was NEVER
C. The issues of the case revolve around the more
substantial issue as to the negligence of the private
respondents and their culpability to petitioners."7
The petitioners argue that the ruling in Manchester should
not have been applied retroactively in this case, since it was
filed prior to the promulgation of the Manchester decision in
1987. They plead that though this Court stated that failure
to state the correct amount of damages would lead to the
dismissal of the complaint, said doctrine should be applied
Moreover, the petitioners assert that at the time of the filing
of the complaint in 1979, they were not certain of the
amount of damages they were entitled to, because the
amount of the lost income would still be finally determined
in the course of the trial of the case. 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.

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Finally, the petitioners stress that the alleged defect was

never put in issue either in the RTC or in the CA.

and fair play, as well as with a great deal of circumspection

in consideration of all attendant circumstances.14

The Court finds merit in the petition.

While there is a crying need to unclog court dockets on the

one hand, there is, on the other, a greater demand for
resolving genuine disputes fairly and equitably, 15 for it is far
better to dispose of a case on the merit which is a primordial
end, rather than on a technicality that may result in

The rule is that payment in full of the docket fees within the
prescribed period is mandatory.8 In Manchester v. Court of
Appeals,9 it was held that a court acquires jurisdiction over
any case only upon the payment of the prescribed docket
fee. The strict application of this rule was, however, relaxed
two (2) years after in the case ofSun Insurance Office, Ltd. v.
Asuncion,10 wherein the Court decreed that where the
initiatory pleading is not accompanied by the payment of
the docket fee, the court may allow payment of the fee
within a reasonable period of time, but in no case beyond
the applicable prescriptive or reglementary period. 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. 11 Thus, in the more
recent case of United Overseas Bank v. Ros,12 the Court
explained that where the party does not deliberately intend
to defraud the court in payment of docket fees, and
manifests its willingness to abide by the rules by paying
additional docket fees when required by the court, the
liberal doctrine enunciated in Sun Insurance Office, Ltd., and
not the strict regulations set in Manchester, will apply. It has
been on record that the Court, in several instances, 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. In the case of La Salette College v.
Pilotin,13 the Court stated:
Notwithstanding the mandatory nature of the requirement of
payment of appellate docket fees, we also recognize that its
strict application is qualified by the following: first, failure to
pay those fees within the reglementary period allows only
discretionary, not automatic, dismissal; second, such power
should be used by the court in conjunction with its exercise
of sound discretion in accordance with the tenets of justice

In this case, it cannot be denied that the case was litigated

before the RTC and said trial court had already rendered a
decision. While it was at that level, the matter of nonpayment of docket fees was never an issue. It was only the
CA which motu propio dismissed the case for said reason.
Considering the foregoing, 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, for, indeed, the general objective of
procedure is to facilitate the application of justice to the
rival claims of contending parties, bearing always in mind
that procedure is not to hinder but to promote the
administration of justice.16
The Court also takes into account the fact that the case was
filed before the Manchester ruling came out. Even if said
ruling could be applied retroactively, liberality should be
accorded to the petitioners in view of the recency then of
the ruling. Leniency because of recency was applied to the
cases of Far Eastern Shipping Company v. Court of
Appeals17 and Spouses Jimmy and Patri Chan v. RTC of
Zamboanga.18 In the case of Mactan Cebu International
Airport Authority v. Mangubat (Mactan),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 therecency of the
changes introduced by the new rules." In Mactan, the Office
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of the Solicitor General (OSG) also failed to pay the correct

docket fees on time.

prolong its resolution. In the higher interest of substantial

justice and to spare the parties from further delay, the Court
will resolve the case on the merits.

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.
They were conceived and promulgated to effectively aid the
court in the dispensation of justice. Courts are not slaves to
or robots of technical rules, shorn of judicial discretion. In
rendering justice, courts have always been, as they ought to
be, conscientiously guided by the norm that, on the balance,
technicalities take a backseat against substantive rights,
and not the other way around. Thus, if the application of the
Rules would tend to frustrate rather than promote justice, it
is always within the power of the Court to suspend the
Rules, or except a particular case from its operation. 20
The petitioners, however, 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. 2. Fees in lien. Where the court in its final judgment
awards a claim not alleged, or a relief different from, or
more than that claimed in the pleading, the party concerned
shall pay the additional fees which shall constitute a lien on
the judgment in satisfaction of said lien. The clerk of court
shall assess and collect the corresponding fees.
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, the appropriate
action, under ordinary circumstances, would be for the Court
to remand the case to the CA. Considering, however, that
the case at bench has been pending for more than 30 years
and the records thereof are already before this Court, a
remand of the case to the CA would only unnecessarily

The facts are beyond dispute. Reinoso,

the jeepney passenger, died as a result of the collision of
a jeepney and a truck on June 14, 1979 at around 7:00
oclock in the evening along E. Rodriguez Avenue, Quezon
City. 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. Based on the sketch and spot
report of the police authorities and the narration of
thejeepney driver and his passengers, the collision was
brought about because the truck driver suddenly swerved
to, and encroached on, the left side portion of the road in an
attempt to avoid a wooden barricade, hitting the
passenger jeepney as a consequence. 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. The greater mass of evidence spread on
the records and its influence support plaintiffs plaint
including that of defendant Tapales.
The Land Transportation and Traffic Rule (R.A. No. 4136),
reads as follows:
"Sec. 37. Driving on right side of highway. Unless a
different course of action is required in the interest of the
safety and the security of life, person or property, or
because of unreasonable difficulty of operation in
compliance therewith, 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, and to the left when overtaking persons or vehicles
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going the same direction, and when turning to the left in

going from one highway to another, every vehicle shall be
conducted to the right of the center of the intersection of
the highway."
Having in mind the foregoing provision of law, this Court is
convinced of the veracity of the version of the passenger
jeepney driver Alejandro Santos, (plaintiffs and Tapales
witness) that while running on lane No. 4 westward bound
towards Ortigas Avenue at between 30-40 kms. per hour
(63-64 tsn, Jan. 6, 1984) the "sand & gravel" truck from the
opposite direction driven by Mariano Geronimo, 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, upon reaching said wooden block
suddenly swerved to the left into lanes 3 and 4 at high
speed "napakabilis po ng dating ng truck." (29 tsn, Sept. 26,
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, Sept. 26, 1985). 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 passengers of the
jeepney and its driver were injured including two passengers
who died. The left side of the jeepney suffered considerable
damage as seen in the picture (Exhs. 4 & 5-Tapales, pages
331-332, records) taken while at the repair shop.
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. 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). At the time of the bumping, the
jeepney was running on its right lane No. 4 and even during
the moments before said bumping, moving at moderate

speed thereon since lane No. 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 narration of Santos and Mondalia are convincing
and consistent in depicting the true facts of the case
untainted by vacillation and therefore, worthy to be relied
upon. Their story is forfeited and confirmed by the sketch
drawn by the investigating officer Pfc. F. Amaba, Traffic
Division, NPD, Quezon City who rushed to the scene of the
mishap (Vide: Resolution of Asst fiscal Elizabeth B. Reyes
marked as Exhs. 7, 7-A, 7-B-Tapales, pp. 166-168, records;
the Certified Copy found on pages 598-600, ibid, with the
attached police sketch of Pfc. Amaba, marked as Exh. 8Tapales on page 169, ibid; certified copy of which is on page
594, ibid) indicating the fact that the bumping indeed
occurred at lane No. 4 and showing how the gavel & sand
truck is positioned in relation to the jeepney. 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. The rule that official duty had
been performed (Sec.5(m), R-131, and also Sec. 38, R-a30,
Rev. 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
While ending up on the opposite lane is not conclusive proof
of fault in automobile collisions,22 the position of the two
vehicles, as depicted in the sketch of the police officers,
clearly shows that it was the truck that hit thejeepney. The
evidentiary records disclosed that the truck was speeding
along E. Rodriguez, heading towards Santolan Street, while
the passenger jeepney was coming from the opposite
direction. When the truck reached a certain point near the
Meralco Post No. J9-450, the front portion of the truck hit
the left middle side portion of the passenger jeepney,
causing damage to both vehicles and injuries to the driver
and passengers of the jeepney. The truck driver should have
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been more careful, because, at that time, a portion of E.

Rodriguez Avenue was under repair and a wooden barricade
was placed in the middle thereof.
The Court likewise sustains the finding of the RTC that the
truck owner, Guballa, failed to rebut the presumption of
negligence in the hiring and supervision of his employee.
Article 2176, in relation to Article 2180 of the Civil Code,
Art. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence is obliged to pay for
the damage done. Such fault or negligence, if there is no
pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of
this Chapter.
Art. 2180. The obligation imposed by Art. 2176 is
demandable not only for ones own acts or omissions but
also for those of persons for whom one is responsible.
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.
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

Whenever an employees negligence causes damage or

injury to another, there instantly arises a presumptionjuris
tantum that the employer failed to exercise diligentissimi
patris families in the selection or supervision of his
employee.23 Thus, in the selection of prospective employees,
employers are required to examine them as to their
qualification, experience and service record. With respect to
the supervision of employees, employers must formulate
standard operating procedures, monitor their
implementation, and impose disciplinary measures for
breaches thereof. These facts must be shown by concrete
proof, including documentary evidence.24 Thus, the RTC
committed no error in finding that the evidence presented
by respondent Guballa was wanting. It ruled:
x x x. As expected, defendant Jose Guballa, 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, water, brakes, gasoline, horn (9 tsn, July 17, 1986);
and that Geronimo had been driving for him sometime in
1976 until the collision in litigation came about (5-6 tsn,
ibid); that whenever his trucks gets out of the compound to
make deliveries, it is always accompanied with two (2)
helpers (16-17 tsn, ibid). This was all which he considered as
selection and supervision in compliance with the law to free
himself from any responsibility. 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."25
WHEREFORE, the petition is GRANTED. The May 20, 1994
Decision and June 30, 1994 Resolution of the Court of
Appeals are REVERSED and SET ASIDE and the March 22,
1988 Decision of the Regional Trial Court, Branch 8, Manila,

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Do-All Metals Industries Inc. v Security Bank

G.R. No. 176339 January 10, 2011
From 1996 to 1997, Dragon Lady Industries, Inc., owned by
petitioner spouses Domingo Lim and Lely Kung Lim (the
Lims) took out loans from respondent Security Bank
Corporation (the Bank) that totaled P92,454,776.45. Unable
to pay the loans on time, the Lims assigned some of their
real properties to the Bank to secure the same, including a
building and the lot on which it stands (the property),
located at M. de Leon St., Santolan, Pasig City. 1
In 1998 the Bank offered to lease the property to the Lims
through petitioner Do-All Metals Industries, Inc. (DMI)
primarily for business although the Lims were to use part of
the property as their residence. DMI and the Bank executed
a two-year lease contract from October 1, 1998 to
September 30, 2000 but the Bank retained the right to preterminate the lease. The contract also provided that, should
the Bank decide to sell the property, DMI shall have the
right of first refusal.
On December 3, 1999, before the lease was up, the Bank
gave notice to DMI that it was pre-terminating the lease on
December 31, 1999. Wanting to exercise its right of first
refusal, DMI tried to negotiate with the Bank the terms of its
purchase. DMI offered to pay the Bank P8 million for the
property but the latter rejected the offer, suggestingP15
million instead. DMI made a second offer of P10 million but
the Bank declined the same.
While the negotiations were on going, the Lims claimed that
they continued to use the property in their business. But the
Bank posted at the place private security guards from
Philippine Industrial Security Agency (PISA). The Lims also
claimed that on several occasions in 2000, the guards, on
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instructions of the Bank representatives Titolaido

Payongayong and Evylene Sison, padlocked the entrances to
the place and barred the Lims as well as DMIs employees
from entering the property. One of the guards even pointed
his gun at one employee and shots were fired. Because of
this, DMI was unable to close several projects and contracts
with prospective clients. Further, the Lims alleged that they
were unable to retrieve assorted furniture, equipment, and
personal items left at the property.
The Lims eventually filed a complaint with the Regional Trial
Court (RTC) of Pasig City for damages with prayer for the
issuance of a temporary restraining order (TRO) or
preliminary injunction against the Bank and its codefendants Payongayong, Sison, PISA, and Gil
Silos.2 Answering the complaint, the Bank pointed out that
the lease contract allowed it to sell the property at any time
provided only that it gave DMI the right of first refusal. DMI
had seven days from notice to exercise its option. On
September 10, 1999 the Bank gave notice to DMI that it
intended to sell the property to a third party. DMI asked for
an extension of its option to buy and the Bank granted it.
But the parties could not agree on a purchase price. The
Bank required DMI to vacate and turnover the property but it
failed to do so. As a result, the Banks buyer backed-out of
the sale. Despite what happened, the Bank and DMI
continued negotiations for the purchase of the leased
premises but they came to no agreement.
The Bank denied, on the other hand, that its guards
harassed DMI and the Lims. To protect its property, the Bank
began posting guards at the building even before it leased
the same to DMI. Indeed, this arrangement benefited both
parties. The Bank alleged that in October of 2000, when the
parties could not come to an agreement regarding the
purchase of the property, DMI vacated the same and
peacefully turned over possession to the Bank.

The Bank offered no objection to the issuance of a TRO since

it claimed that it never prevented DMI or its employees from
entering or leaving the building. For this reason, the RTC
directed the Bank to allow DMI and the Lims to enter the
building and get the things they left there. The latter
claimed, however, that on entering the building, they were
unable to find the movable properties they left there. In a
supplemental complaint, DMI and the Lims alleged that the
Bank surreptitiously took such properties, resulting in
additional actual damages to them of over P27 million.
The RTC set the pre-trial in the case for December 4, 2001.
On that date, however, counsel for the Bank moved to reset
the proceeding. The court denied the motion and allowed
DMI and the Lims to present their evidence ex parte. The
court eventually reconsidered its order but only after the
plaintiffs had already presented their evidence and were
about to rest their case. The RTC declined to recall the
plaintiffs witnesses for cross- examination but allowed the
Bank to present its evidence.3 This prompted the Bank to
seek relief from the Court of Appeals (CA) and eventually
from this Court but to no avail.4
During its turn at the trial, the Bank got to present only
defendant Payongayong, a bank officer. For repeatedly
canceling the hearings and incurring delays, the RTC
declared the Bank to have forfeited its right to present
additional evidence and deemed the case submitted for
On September 30, 2004 the RTC rendered a decision in favor
of DMI and the Lims. It ordered the Bank to pay the
plaintiffs P27,974,564.00 as actual damages, P500,000.00
as moral damages, P500,000 as exemplary damages,
and P100,000.00 as attorneys fees. But the court absolved
defendants Payongayong, Sison, Silos and PISA of any

Page 8 of 16

The Bank moved for reconsideration of the decision,

questioning among other things the RTCs authority to grant
damages considering plaintiffs failure to pay the filing fees
on their supplemental complaint. The RTC denied the
motion. On appeal to the CA, the latter found for the Bank,
reversed the RTC decision, and dismissed the complaint as
well as the counterclaims.5 DMI and the Lims filed a motion
for reconsideration but the CA denied the same, hence this
The Issues Presented
The issues presented in this case are:
1. Whether or not the RTC acquired jurisdiction to
hear and adjudicate plaintiffs supplemental
complaint against the Bank considering their failure
to pay the filing fees on the amounts of damages
they claim in it;
2. Whether or not the Bank is liable for the
intimidation and harassment committed against DMI
and its representatives; and
3. Whether or not the Bank is liable to DMI and the
Lims for the machineries, equipment, and other
properties they allegedly lost after they were barred
from the property.
The Courts Rulings
One. On the issue of jurisdiction, respondent Bank argues
that plaintiffs failure to pay the filing fees on their
supplemental complaint is fatal to their action.
But what the plaintiffs failed to pay was merely the filing
fees for their Supplemental Complaint. The RTC acquired
jurisdiction over plaintiffs action from the moment they filed

their original complaint accompanied by the payment of the

filing fees due on the same. The plaintiffs non-payment of
the additional filing fees due on their additional claims did
not divest the RTC of the jurisdiction it already had over the
Two. As to the claim that Banks representatives and
retained guards harassed and intimidated DMIs employees
and the Lims, the RTC found ample proof of such
wrongdoings and accordingly awarded damages to the
plaintiffs. But the CA disagreed, discounting the testimony of
the police officers regarding their investigations of the
incidents since such officers were not present when they
happened. The CA may be correct in a way but the plaintiffs
presented eyewitnesses who testified out of personal
knowledge. The police officers testified merely to point out
that there had been trouble at the place and their
investigations yielded their findings.
The Bank belittles the testimonies of the petitioners
witnesses for having been presented ex parte before the
clerk of court. But the ex parte hearing, having been
properly authorized, cannot be assailed as less credible. It
was the Banks fault that it was unable to attend the
hearing. It cannot profit from its lack of diligence.
Domingo Lim and some employees of DMI testified
regarding the Bank guards unmitigated use of their superior
strength and firepower. Their testimonies were never
refuted. Police Inspector Priscillo dela Paz testified that he
responded to several complaints regarding shooting
incidents at the leased premises and on one occasion, he
found Domingo Lim was locked in the building. When he
asked why Lim had been locked in, a Bank representative
told him that they had instructions to prevent anyone from
taking any property out of the premises. It was only after
Dela Paz talked to the Bank representative that they let Lim
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Payongayong, the Banks sole witness, denied charges of

harassment against the Banks representatives and the
guards. But his denial came merely from reports relayed to
him. They were not based on personal knowledge.1avvphil
While the lease may have already lapsed, the Bank had no
business harassing and intimidating the Lims and their
employees. The RTC was therefore correct in adjudging
moral damages, exemplary damages, and attorneys fees
against the Bank for the acts of their representatives and
building guards.
Three. As to the damages that plaintiffs claim under their
supplemental complaint, their stand is that the RTC
committed no error in admitting the complaint even if they
had not paid the filing fees due on it since such fees
constituted a lien anyway on the judgment award. But this
after-judgment lien, which implies that payment depends on
a successful execution of the judgment, applies to cases
where the filing fees were incorrectly assessed or paid or
where the court has discretion to fix the amount of the
award.8 None of these circumstances obtain in this case.
Here, the supplemental complaint specified from the
beginning the actual damages that the plaintiffs sought
against the Bank. Still plaintiffs paid no filing fees on the
same. And, while petitioners claim that they were willing to
pay the additional fees, they gave no reason for their
omission nor offered to pay the same. They merely said that
they did not yet pay the fees because the RTC had not
assessed them for it. But a supplemental complaint is like
any complaint and the rule is that the filing fees due on a
complaint need to be paid upon its filing. 9 The rules do not
require the court to make special assessments in cases of
supplemental complaints.

make at least a late payment before the case could be

submitted for decision, assuming of course that the
prescription of their action had not then set it in. Clearly,
plaintiffs have no excuse for their continuous failure to pay
the fees they owed the court. Consequently, the trial court
should have treated their Supplemental Complaint as not
Plaintiffs of course point out that the Bank itself raised the
issue of non-payment of additional filing fees only after the
RTC had rendered its decision in the case. The implication is
that the Bank should be deemed to have waived its
objection to such omission. But it is not for a party to the
case or even for the trial court to waive the payment of the
additional filing fees due on the supplemental complaint.
Only the Supreme Court can grant exemptions to the
payment of the fees due the courts and these exemptions
are embodied in its rules.
Besides, as correctly pointed out by the CA, plaintiffs had
the burden of proving that the movable properties in
question had remained in the premises and that the bank
was responsible for their loss. The only evidence offered to
prove the loss was Domingo Lims testimony and some
undated and unsigned inventories. These were self-serving
and uncorroborated.
WHEREFORE, the Court PARTIALLY GRANTS the petition and
REINSTATES with modification the decision of the Regional
Trial Court of Pasig City in Civil Case 68184. The Court
DIRECTS respondent Security Bank Corporation to pay
petitioners DMI and spouses Domingo and Lely Kung Lim
damages in the following amounts: P500,000.00 as moral
damages, P500,000.00 as exemplary damages,
and P100,000.00 for attorneys fees. The Court DELETES the
award of actual damages of P27,974,564.00.

To aggravate plaintiffs omission, although the Bank brought

up the question of their failure to pay additional filing fees in
its motion for reconsideration, plaintiffs made no effort to
Page 10 of 16

Julian v DBP
G.R. No. 174193 December 7, 2011
This case stemmed from a Real Estate Mortgage 6 executed
by Thelma Julian (Thelma), mother of herein petitioner
Samuel Julian, over a property situated in Fuentes
Subdivision, Roxas City covered by Transfer Certificate of
Title (TCT) No. T-16705.7
On December 23, 1980,8 Thelma obtained a housing loan
from respondent Development Bank of the Philippines (DBP)
Page 11 of 16

in the amount of P99,400.00.9 To secure payment of the

loan, she executed in favor of the respondent a Real Estate
Mortgage on the aforementioned parcel of land registered
under her name. A Special Power of Attorney (SPA)
appointing the respondent and its personnel to sell the
property in the event of extrajudicial foreclosure was
inserted and made an integral part of the mortgage

He contended that the SPA which was used to sell the

mortgaged property at public auction in 1983 was no longer
effective in view of Thelmas death in 1982. Consequently,
the public auction, the resulting Deed of Sale,22 Affidavit of
Consolidation and TCT No. T-19303 are null and void.

Subsequently, Thelma died on January 8, 1982.11

made at the instance of both parties due to an impending

amicable settlement. Eventually, the parties were able to
reach a settlement. Thus, in an Order24 dated October 28,
1998, the RTC directed both parties to submit a joint motion
to dismiss the case. However, almost two years passed
without the parties complying with the said Order.

Because of arrearages in the monthly amortizations,

respondent foreclosed
the mortgaged property. Same was sold at public auction on
September 15, 198312 with respondent as the highest
bidder.13 No redemption having been made, title to the
property was consolidated in favor of the respondent on
September 21, 198414 and TCT No. T-1930315 was thereafter
issued in its name.
Thereafter, the actual occupants of the mortgaged property,
spouses Ramon de la Cruz and his wife, who is likewise
petitioners sibling, Ruth Julian de la Cruz (spouses De la
Cruz), offered to purchase the property. Respondent
accepted the offer and executed a Deed of Conditional
Sale16 on October 31, 1985. However, spouses De la Cruz
failed to pay17 72 monthly amortizations resulting in the
rescission of the said deed on February 28, 1992.
Notwithstanding, spouses De la Cruz refused to vacate the
premises compelling respondent to file an "Unlawful
Detainer" case against them on February 23, 1993.
Judgment was rendered in favor of respondent on July 29,
However, before the Writ of Execution could be carried
out,19 petitioner filed Civil Case No. 638720 before the
Regional Trial Court (RTC) of Roxas City on October 27,
1993,21 for the cancellation of respondents TCT No. T-19303.

During the course of the proceedings, a series of

postponements23 were

Consequently, in an Order25 dated October 11, 2000, the

RTC dismissed the case for failure of the parties to comply
for an unreasonable length of time. The dismissal, however,
was set aside in an Order26 dated February 12, 2003 in
consideration of petitioners payment of ten percent (10%)
of respondents claim. The parties were then given 15 days
from notice within which to submit their compromise
agreement,27 which was subsequently extended for 30 days
from notice.28 Despite the extensions, however, no
compromise agreement was filed in court. As a result, in an
Order29 dated July 24, 2003, the trial court directed the
parties to show cause within 15 days from notice why the
case should not be dismissed for failure to prosecute.
Meanwhile, with petitioners conformity, his counsel
withdrew her appearance on August 13, 2003.30
Ruling of the Regional Trial Court
On January 28, 2004 or six months from the issuance of the
show cause Order, the trial court dismissed the case in an
Order31 which states:

Page 12 of 16

For failure of the parties thru counsel to comply with the

Order dated July 24, 2003, the instant case is hereby
Petitioner, through his new counsel, timely filed a Notice of
Appeal32 on April 26, 2004 but failed to pay the docket and
other lawful fees.
Ruling of the Court of Appeals
As earlier mentioned, the CA dismissed the appeal for nonpayment of the required docket and other lawful fees
pursuant to Section 1(c), Rule 50 of the Rules of Court.33
Seeking reconsideration, 34 petitioner attached to his motion
Postal Money Order Nos. A-0620000276, B-0610000283 and
J-065000566 in the aggregate amount of P3,020.0035 as
payment for the docket fees. He explained that his failure to
pay the required fees was due to oversight and noncognizance of the necessity to pay the said fees since his
counsel did not inform him of such requirement to pay.
Petitioner prayed for liberal application of the Rules as
according to him, a strict enforcement would be tantamount
to imposing a penalty not commensurate to his
thoughtlessness or oversight in not adhering to the
procedural requisite.36
Petitioners submission did not move the CA, which disposed
of his motion for reconsideration through its second assailed
Resolution37 thus:
In the case of Meatmaster International Corporation vs. Lelis
Integrated Development Corporation, it was held "that the
payment of docket fees within the prescribed period is
mandatory for the perfection of an appeal." This is so
because a court acquires jurisdiction over the subject matter

of the action only upon the payment of the correct amount

of docket fees regardless of the actual date of filing of the
case in court. The payment of the full amount of the docket
fee is sine qua non for the perfection of an appeal. The court
acquires jurisdiction over the case only upon the payment of
the prescribed docket fees.
Verily, the requirement of an appeal fee is not a mere
technicality of law or procedure but an essential
requirement without which the decision appealed from
would become final and executory as if no appeal was filed
at all. Thus, if We allow belated payment as prayed for and
reinstate the instant appeal, it will have the effect of
withholding the finality of the judgment or order appealed
Procedural rules are not to be belittled or dismissed simply
because their non-observance may have resulted in
prejudice to a partys substantive rights. Like all rules, they
are required to be followed except only for the most
persuasive of reasons when they may be relaxed to relieve a
litigant of an injustice not proportionate with the degree of
his thoughtlessness in not complying with the procedure
In his Motion for Reconsideration, appellant has not shown
weighty and persuasive reasons to compel Us to exercise
Our discretion of suspending the strict adherence to the
Rules. Other than his flimsy excuse that the ground in the
Courts Resolution is merely technical, appellant has
miserably failed to proffer a convincing justification for [his]
procedural error. Thus, appellant failed to justify why the
Rules should be relaxed and [why] the equitable
consideration of the Court should be exercised in his
situation as an exception to the strict implementation of the

Page 13 of 16

IN VIEW THEREOF, the Motion for Reconsideration is hereby

DENIED and the Resolution dated April 12, 2005

Reconsideration shows his intention and willingness to

comply with the rules.
Our Ruling

Petitioner comes before this Court by way of Petition for
Review on Certiorari raising the following issues:
The pivotal issue is whether the CA was correct in strictly
applying the rules on the payment of docket fees.
Petitioner acknowledges the mandatory nature of the rule
that docket and other lawful fees must be paid in full within
the prescribed period for an appeal to be perfected.
However, he asserts that the broader interest of justice and
the desired objective of deciding the case on the merits call
for leniency in the application of the rules. Hence, he must
be given an opportunity to air his cause without the
constraints of technicalities. Petitioner contends that the CA
should apply the pronouncement of this Court in Yambao v.
Court of Appeals40 relaxing the policy of strict adherence to
the rule regarding appeal fees if justifiable reason for the
non-payment of the correct amount of docket fees within
the prescribed period is shown. He further contends that his
act of attaching the payment for the fees to his Motion for

The petition lacks merit.

Payment of full docket fees within the prescribed period for
taking an appeal is mandatory.
It is well-established that "[t]he right to appeal is a statutory
privilege and must be exercised only in the manner and in
accordance with the provisions of the law."41 "Thus, one who
seeks to avail of the right to appeal must strictly comply
with the requirements of the rules, and failure to do so leads
to the loss of the right to appeal."42
The applicable rule for appeals from judgments issued by
the RTC in the exercise of its original jurisdiction is Rule 41
of the Rules of Court, Section 4 of which provides:
Section 4. Appellate court docket and other lawful fees. Within the period for taking an appeal, the appellant shall
pay to the clerk of the court which rendered the judgment or
final order appealed from, the full amount of the appellate
court docket and other lawful fees. Proof of payment of said
fees shall be transmitted to the appellate court together
with the original record or the record on appeal.
The Rules also provide that failure of the appellant to pay
the docket and other lawful fees is a ground for dismissal of
the appeal.43
The Court has consistently ruled in a number of cases that
the payment of the full amount of docket fees within the
prescribed period is both mandatory and jurisdictional. 44 It is
a condition sine qua non for the appeal to be perfected and
only then can a court acquire jurisdiction over the
Page 14 of 16

case.45 The requirement of an appeal fee is not a mere

technicality of law or procedure and should not be
undermined except for the most persuasive of reasons. Nonobservance would be tantamount to no appeal being filed
thereby rendering the challenged decision, resolution or
order final and executory.
Admittedly, this rule is not without recognized qualifications.
The Court has declared that in appealed cases, failure to pay
the appellate court docket fee within the prescribed period
warrants only discretionary as opposed to automatic
dismissal of the appeal and that the court shall exercise its
power to dismiss in accordance with the tenets of justice
and fair play and with great deal of circumspection
considering all attendant circumstances.46
In the case at bench, the justifications presented by
petitioner for the non-payment of the docket fees are
oversight and the lack of advice from his counsel.
Unfortunately, the reasons presented are neither convincing
nor adequate to merit leniency. Petitioner submits that he
only found out about the requirement to pay the docket fees
when he received the CA Resolution denying his appeal on
April 22, 2005 or three days short of one year from filing of
the said appeal. This Court finds this not to be logically true
to human experience. It is unusual for petitioners counsel
not to advice him of the required docket fees. More often
than not, counsels are aware of the docket fees required to
be paid to the courts, and will ask clients for the said
amount prior to filing pleadings in court. This is so because
counsels are not expected to shoulder or advance payment
for their clients. Assuming arguendo that petitioners
counsel did not inform him of the requirement to pay the
docket fees to perfect the appeal, what we find incredible is
that petitioner apparently failed to communicate with his
counsel after the filing of said appeal. This Court has
repeatedly held that "litigants, represented by counsel,
should not expect that all they need to do is sit back, relax
and await the outcome of their case.47 "It is the duty of a

party-litigant to be in contact with his counsel from time to

time in order to be informed of the progress of his
case.48 Moreover, the counsels negligence binds petitioner
and, for that reason alone the loss of his remedy was caused
by his own negligence.49 Consequently, a relaxation of the
rule cannot be granted.50 The bitter consequence of such
grave inadvertence is to render the trial courts order final
and executory.51
Further, the Court notes that petitioner only attempted to
perfect his appeal on May 6, 2005 by appending the postal
money orders to his Motion for Reconsideration, or one year
and nine days too late.52 By that time, the challenged
Order has long become final and no longer open to an
Petitioners reliance on the policy espoused in the case of
Yambao54 is likewise unavailing. The pertinent portion relied
on by petitioner reads:
Thus, the appellate court may extend the time for the
payment of the docket fees if appellant is able to show that
there is a justifiable reason for his failure to pay
the correct amount of docket fees within the prescribed
period, like fraud, accident, mistake, excusable negligence,
or a similar supervening casualty, without fault on the part
of the appellant. x x x55 (Emphasis supplied.)
Clearly, the case applies to a situation where payment of the
docket fees was made albeit incomplete. In the instant case,
no payment was made by petitioner at all. Even assuming
arguendo that Yambao is applicable to petitioners case, still,
the Court sees no justifiable reason to allow this Court to
relax the strict application of the Rules.
Likewise assuming for the sake of argument that
consideration be given to petitioners willingness to comply
Page 15 of 16

with the rules since he attached postal money orders to his

motion for reconsideration, the broader interest of justice
will still not be served if petitioners appeal is reinstated. On
one hand, petitioner calls for leniency to enable him to
establish his case. On the other hand is respondent, which
has been embroiled in a decades-long waiting game. The
long-running dispute could be recapped thus: (1) petitioners
predecessor-in-interest, Thelma, obtained a loan from
respondent secured by a Real Estate Mortgage on the
subject property; (2) Thelma was unable to pay the loan
thereby causing foreclosure of the Real Estate Mortgage; (3)
petitioner filed his civil action to question the validity of the
public auction sale only on October 27, 1993 or 10 years
after the sale was conducted; and, (4) from the time of the
consolidation of title in the name of respondent in 1984 until
the present, spouses De la Cruz have been in possession of
the foreclosed property.1avvphi1

on the part of the respondent which has long been deprived

of its right to possess the property it owns.
WHEREFORE, the petition is DENIED. The Resolutions of the
Court of Appeals in CA-G.R. CV No. 00240 dated April 12,
2005 and July 27, 2006 are AFFIRMED.

Petitioner and his sister Ruth Julian de la Cruz (Ruth) know

that their mother Thelma has already lost ownership rights
to the property in question when the latter defaulted in her
payment to respondent and none of her successors-ininterest redeemed the property within the prescribed period.
This is the reason why Ruth and her husband offered to
purchase the property from respondent. However, when the
said spouses De la Cruz defaulted in their payment, they
refused to surrender the property to respondent. For his
part, petitioner reinforces such refusal to surrender by
questioning the validity of the public auction sale.
Now petitioner comes before this Court praying for leniency
in the interest of justice. It must be stressed, however, that
it is only when persuasive reasons exist that the Rules may
be relaxed to spare a litigant of an injustice not
commensurate with his failure to comply with the prescribed
procedure.56 Here, the Court finds that petitioner is under no
threat of suffering an injustice. On the contrary, it will be the
height of injustice if the Court accords petitioner leniency
and reinstates his appeal as this would mean further waiting
Page 16 of 16