PWCTUI vs.

Yangco

Facts:
1. Respondent Teodoro R. Yangco Foundation, Inc. (TRY Foundation) filed before the RTC of Quezon
City acting as a Land Registration Court, a Petition for the issuance of New Title in Lieu of TCT No.
20970 T-22702. TRY Foundation alleged that it is composed of the 2 nd and 3rd generation heirs and
successors-in-interest to the first generation testamentary heirs of the late philanthropist Teodoro R.
Yangco who donated a 14, 073-square meter parcel of land to be used as a site for an institution to be
known as the Abiertas House of Friendship with a stipulation that should the property herein be used for
any other purpose or purposes not herein specified, the present gift shall become ipso facto null and void
and property given shall automatically revert to the donor.
2. The property was registered in the name of PWCTUI by virtue of TCT No. 20970.
3. PWCTUI’s corporate term expired. Five years thereafter, using the same corporate name, PWCTUI
obtained a new SEC Registration NO. 122088 and forthwith applied for the issuance of a new owner’s
duplicate copy of TCT No. 20970 over the subject property. Granted.
4. TRY Foundation claimed that the expiration of PWCTUI’s corporate term effectively rescinded the
donation pursuant to the “unwritten resolutory condition” deemed written by Art. 1315 of the Civil Code
prescribing that Corporation Code mandating that dissolved corporation to wind up their affairs and
dispose of their assets within 3 years from the expiration of their term. TRY Foundation prayed for the
issuance of a new title in its name after the cancellation of PWCTUI’s TCT No. 20970 T-22702.
5. PWCTUI opposed the petition. Denied. RTC ruled that PWCTUI, with SEC Registration No. PW-959 is
separate and distinct from oppositor PWCTUI with SEC Registration No. 122088, and thus has no claim
to the property.
6. PWCTUI appealed to the CA. Denied.
7. PWTCUI sought recourse with the Court thru a petition for review on certiorari. Denied.
8. PWCTUI filed the herein captioned as one for Prohibition & Certiorari and to Re-open the Case with
Prayer for Issuance of Temporary Restraining Order &/or Writ of Preliminary Injunction.
Issue:
Whether or not the RTC acquired jurisdiction over the petition of TRY Foundation?
Held: no.
Observably, TRY Foundation is actually seeking to recover the possession and ownership of the subject
property from PWCTUI and not merely the cancellation of PWCTUI’s TCT no. 20970 t-22702. No judgment
proclaiming TRY Foundation as the absolute owner of the property can be arrived at without declaring the deed
of donation revoked.
The issues embroiled in revocation of donation are litigable in an ordinary civil proceeding which demands
stricter jurisdictional requirements than that imposed in a land registration case.
Foremost of which is the requirement on the service of summons for the court to acquire jurisdiction over the
person of the defendants. Without valid service of summons, the court cannot acquire jurisdiction over the
defendant, unless the defendant voluntarily submits to it. Service of summons is a guarantee of one’s right to
due process in that he is properly apprised of a pending action against him and assured of the opportunity to
present his defenses to the suit.
In contrast, jurisdiction in a land registration cases being a proceeding in rem, is acquired by constructive
seizure of the land through publication, mailing and posting of the notice and hearing. Persons named in the
application are not summoned but merely notified of the date of initial hearing on the petition.
The payment of docket fees is another jurisdictional requirement for an action for revocation which was absent
in the suit filed by TRY Foundation. On the other hand, Sec. 111 of PD No. 1529 merely requires the payment
of filing fees and not docket fees.
Filing fees are intended to take care of court expenses in the handling of cases in terms of supplies, use of
equipment, salaries and fringe benefits of personnel, etc., computed as to man hours used in handling of each
case. Docket fees, on the other hand, vest the trial court jurisdiction over the subject matter or nature of action.
The absence of the above jurisdictional requirements for ordinary action thus prevented the RTC, acting as a
land registration court, from acquiring the power to hear and decide the underlying issue of revocation of
donation. Any determination made involving such issue had no force and effect; it cannot also bind PWCTUI
over whom the RTC acquired no jurisdiction for lack of service of summons.

Manchester Dev. Corp vs. CA

Facts:
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. Ramolete.

1. The Magaspi case was an action for recovery of ownership and possession of a parcel of land with
damages. While the present case is an action for torts and damages and specific performance with prayer
for temporary restraining order, etc. 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
the plaintiff.
2. MAGASPI CASE: Upon the filing of the complaint there was an honest difference of opinion as to the
nature of the action. The complaint was considered an action for recovery of ownership and possession
of parcel of land. The damages stated were treated as merely incidental to the main cause of action.
Thus, the docket fee of only P60.00 and P10.00 for the sheriff’s fee were paid.
3. In the Magaspi case, the trial court ordered the plaintiffs to pay the amount of P3, 104.00 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. 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 to P100,000.00 Said amendment was also admitted.
Herein, the action was considered not only one for recovery of ownership but also for damages, so that
the filing fee for the damages should be the basis of assessment. Although the payment of the docketing
fee of P60.00 was found to be insufficient, nevertheless, 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 were proper and regular.” Hence
as the amended complaint superseded the original complaint, the allegations of damages in the amended
complaint should be the basis of the computation of the filing fee.
4. IN THE PRESENT CASE, there can be no such honest difference of opinion. As maybe gleaned from
the allegations of the complaint as the designation thereof, it is both an action for damages and specific
performance. The docket fee paid upon filing of complaint in the amount of only P410.00 by
considering the action to be merely one for specific performance where the amount involved is not
capable of pecuniary estimation is obviously erroneous. Although the total damages sought is not stated
in the prayer of the complaint yet it is spelled out in the body of the complaint in the amount of P78,
750, 000.00 which should be the basis of assessment of filing fee.
5. An investigation was immediately ordered by the court. Meanwhile plaintiff, through another counsel
with leave of court, filed an amended complaint for the inclusion of Philip Wire and Cable Corporation
as co-plaintiff and emanating any mention of the amount of damages in the body of the complaint. The
original complaint was maintained.
6. The court ruled that there is an under assessment of docket fees hence it ordered Manchester to amend
its complaint. Manchester complied but what it did was to lower the amount of claim for damages to
P10, 000, 000. Said amount was however again not stated in the PRAYER.
Issue:
Whether or not the amended complaint should be admitted.
HELD: No.
In the present case, no such honest difference of opinion was possible as the allegations of the complaint, the
designation and the prayer show clearly that it is an action for damages and specific performance. The
docketing fee should be assessed by considering the amount of damages as alleged in the original complaint.
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.” Thus in the present case the trial court did not acquire
jurisdiction over the case by the payment of only P410.00 as docket fee. Neither can the amendment of the
complaint thereby vest jurisdiction upon the Court. For any legal purposes there is no such original complaint
that was duly filed which could be amended. Consequently, the order admitting the amended complaint and all
subsequent proceedings and actions taken by the trial court are null and void.
The Court of Appeals therefore, 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.
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. 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. This fraudulent practice was compounded when, even as this Court had taken
cognizance of the anomaly and ordered an investigation, petitioner through another counsel filed an amended
complaint, deleting all mention of the amount of damages being asked for in the body of the complaint. It was
only when in obedience to the order of this Court of October 18, 1985, the trial court directed that the amount of
damages be specified in the amended complaint, that petitioners' counsel wrote the damages sought in the much
reduced amount of P10,000,000.00 in the body of the complaint but not in the prayer thereof. The design to
avoid payment of the required docket fee is obvious.
The Court serves warning that it will take drastic action upon a repetition of this unethical practice.
To put a stop to this irregularity, henceforth all complaints, petitions, 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, and said damages shall be considered in the assessment of the filing fees in any case.
Any pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall
otherwise be expunged from the record.
The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An
amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the
payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the Magaspi
case in so far as it is inconsistent with this pronouncement is overturned and reversed.

Nestle Philippines Inc. vs FY Sons Inc. gr no. 150780 May 5, 2006

Facts:
Petitioner ( nestle) is a corporation engaged in the manufacture and distribution of all Nestle products
nationwide. Respondent (FY Sons), is a corporation engaged in trading, marketing, selling, and distributing
food items to restaurants and food service outlets.
On Dec. 23, 1998, petitioners and the respondent entered into a distributorship agreement whereby
petitioner would supply its products, for respondent to distribute to its food service outlets.
A deed of assignment was also executed by respondent in favour of petitioner on Dec. 13, 1988, assigning the
rime deposit of a certain Calixto Laureano in the amount of P500,000.00 to secure respondents credit
purchases from petitioner. A special power of attorney was likewise executed by Laureano authorizing the
respondent to use the time deposit as collateral.
At the end of 1989, the agreement expired and both parties renewed on January 22, 1990.
On Oct. 19, 1990, respondent through counsel, wrote petitioner to complain about the breach of the
agreement and the various act of bad faith committed by petitioner against respondent.

Issue:
WON the invoices and delivery orders corresponding to the alleged overdue accounts turned over the
reflected details of the deliveries made.
Held:
No
Rayos testified on a statement of account she prepared on the basis of invoices and delivery orders which she,
however, knew nothing about. She had no personal knowledge... of the facts on which the accounts were
based since, admittedly, she was not involved in the delivery of goods and was merely in charge of the records
and documents of all accounts receivable as part of her duties as credit and collection manager. She... thus
knew nothing of the truth or falsity of the facts stated in the invoices and delivery orders, i.e., whether such
deliveries were in fact made in the amounts and on the dates stated, or whether they were actually received
by respondent. She was not even the... credit and collection manager during the period the agreement was in
effect. This can only mean that she merely obtained these documents from another without any personal
knowledge of their contents.
The foregoing shows that Rayos was incompetent to testify on whether or not the invoices and delivery orders
turned over to her correctly reflected the details of the deliveries made.

Sun Insurance v Asuncion Digest gr no. 79937-38 February 13, 1989

Facts:

Petitioner Sun Insurance (or SIOL) files a complaint for the annulment of a decision on the consignation of fire
insurance policy. Subsequently, the Private Respondent (PR) files a complaint for the refund of premiums and
the issuance of a writ of preliminary attachment in a civil case against SIOL. In addition, PR also claims for
damages, attorney’s fees, litigation costs, etc., however, the prayer did not state the amount of damages
sought although from the body of the complaint it can be inferred to be in amount of P 50 million. Hence, PR
originally paid only PhP 210.00 in docket fees.The complaint underwent a number of amendments to make
way for subsequent re-assessments of the amount of damages sought as well as the corresponding docket
fees. The respondent demonstrated his willingness to abide by the rules by paying the additional docket fees
as required.

Issue: Did the Court acquire jurisdiction over the case even if private respondent did not pay the correct or
sufficient docket fees?

Held:
YES.
It was held that it is not simply the filing of the complaint or appropriate initiatory pleading, but the payment
of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the
action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court
may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or
reglamentary period. Same rule goes for permissive counterclaims, third party claims and similar pleadings.
In herein case, obviously, there was the intent on the part of PR to defraud the government of the docket fee
due not only in the filing of the original complaint but also in the filing of the second amended complaint.
However, a more liberal interpretation of the rules is called for considering that, unlike in Manchester, the
private respondent demonstrated his willingness to abide by the rules by paying the additional docket fees as
required.
Where a trial court acquires jurisdiction in like manner, but subsequently, the judgment awards a claim not
specified in the pleading, or if specified the same has been left for determination by the court, the additional
filing fee shall constitute a lien on the judgment. 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.

PHILIPPINE FIRST INSURANCE AND PARAMOUNT GENERAL

VS. PYRAMID LOGISTICS AND TRUCKING
 (

FACTS:
Pyramid sought to recover the proceeds of two insurance policies by petitioner Paramount, and
Philippine First. Despite demands, petitioners allegedly failed to settle them, hence, it filed the complaint
subject of the present petition.
In its complaint, Pyramid alleged that its delivery van was loaded with goods valued at PESOS NINE
HUNDRED SEVEN THOUSAND ONE HUNDRED FORTY NINE AND SEVEN/100 (P907,149.07) left the
CMC Bicutan Warehouse but the van, together with the goods, failed to reach its destination and its driver and
helper were nowhere to be found, to its damage and prejudice; that it filed a criminal complaint against the
driver and the helper for qualified theft, and a claim with herein petitioners as co-insurers of the lost goods
but, in violation of petitioners undertaking under the insurance policies, they refused without just and valid
reasons to compensate it for the loss; and that as a direct consequence of petitioners failure, despite repeated
demands, to comply with their respective undertakings under the Insurance Policies by compensating for the
value of the lost goods, it suffered damages and was constrained to engage the services of counsel to enforce
and protect its right to recover compensation under said policies, for which services it obligated itself to pay
the sum equivalent to twenty-five (25%) of any amount recovered as and for attorneys fees and legal
expenses.
Pyramid was assessed P610 docket fee, apparently on the basis of the amount of P50,000 specified in
the prayer representing attorneys fees, which it duly paid.

Pyramid later filed a 1st Amended Complaint containing minor changes in its body but bearing the same
prayer. Branch 148 of the Makati RTC to which the complaint was raffled admitted the Amended Complaint.
 
Petitioners filed a Motion to Dismiss on the ground of, inter alia, lack of jurisdiction, Pyramid not
having paid the docket fees in full.
Petitioners Motion for Reconsideration of the denial of their Motion to Dismiss having been denied,
they filed their Answer with Compulsory Counterclaim ad Cautelam, alleging that they intended to file a
Petition for Certiorari with the Court of Appeals.

 Petitioners did indeed eventually file before the Court of Appeals a Petition for Certiorari (With
Preliminary Injunction and Urgent Prayer for Restraining Order.
 By Decision of June 3, 2004, the Court of Appeals partially granted petitioners petition for certiorari by
setting aside the trial judges assailed orders and ordering Pyramid to file the correct docket fees within a
reasonable time, it holding that while the complaint was denominated as one for specific performance, it
sought to recover from petitioners Pyramids claims arising from the subject losses.   

Petitioners filed a Motion for Reconsideration of the appellate courts decision. Pyramid filed its
Comment and Opposition to the Motion for Reconsideration.

ISSUE:
Whether or not Pyramid Logistics paid the correct docket fee; if the negative, whether or not the
complaint should be dismissed or Pyramid can still be ordered to pay the fee.

RULING:
In Tacay v. Regional Trial Court of Tagum, Davao del Norte, the Court clarified the effect of
the Sun Insurance ruling on the Manchester ruling as follows:
 
As will be noted, the requirement in Circular No. 7 [of this Court which was issued based
on the Manchester ruling that complaints, petitions, answers, and similar pleadings should
specify the amount of damages being prayed for not only in the body of the pleading but also in
the prayer, has not been altered. What has been revised is the rule that subsequent
amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court,
much less the payment of the docket fee based on the amount sought in the amended
pleading, the trial court now being authorized to allow payment of the fee within a reasonable
time but in no case beyond the applicable prescriptive period or reglementary
period. Moreover, a new rule has been added, governing the awards of claims not specified in
the pleading i.e., damages arising after the filing of the complaint or similar pleading as to
which the additional filing fee therefore shall constitute a lien on the judgment.
 
Now, under the Rules of Court, docket or filing fees are assessed on the basis of the sum
claimed, on the one hand, or the value of the property in litigation or the value of the estate, on
the other. . .
 
 Where the action is purely for the recovery of money or damages, the docket fees are
assessed on the basis of the aggregate amount claimed, exclusive only of interests and costs.  In
this case, the complaint or similar pleading should, according to Circular No. 7 of this Court,
specify the amount of damages being prayed for not only in the body of the pleading but also in
the prayer, and said damages shall be considered in the assessment of filing fees in any case.
 
Two situations may arise. One is where the complaint or similar pleading sets out a
claim purely for money and damages and there is no statement of the amounts being
claimed. In this event the rule is that the pleading will not be accepted nor admitted, or shall
otherwise be expunged from the record. In other words, the complaint or pleading may be
dismissed, or the claims as to which amounts are unspecified may be expunged, although
as aforestated the Court may, on motion, permit amendment of the complaint and payment of
the fees provided the claim has not in the meantime become time-barred. The other is where
the pleading does specify the amount of every claim, but the fees paid are insufficient; and here
again, the rule now is that the court may allow a reasonable time for the payment of the
prescribed fees, or the balance thereof, and upon such payment, the defect is cured and the
court may properly take cognizance of the action, unless in the meantime prescription has set
in and consequently barred the right of action. 
  
While respondent knew its losses and alleged them in the body of the Complaint, it
was not aware of the extent of petitioners respective liability under the two insurance
policies. The allegation of respondents losses, albeit, without repeating them in its prayer for
relief was not motivated by an intention to mislead, cheat or defraud the Court. It just left the
matter of liability arising from two separate and distinct Insurance Policies covering the same
insurable risk for the trial courts determination, hence, respondent came up with an action for
specific performance.

WHEREFORE, in light of the foregoing discussions, the petition is DENIED.

 
SO ORDERED.

HOME GUARANTY CORPORATION VS. R-II BUILDERS AND NHA

(Payment of filing/docking fees is jurisdictional)
FACTS:

On 19 March 1993, a Joint Venture Agreement (JVA) was entered into between respondents National
Housing Authority (NHA) and R-II Builders, Inc. (R-II Builders) for the implementation of the Smokey Mountain
Development and Reclamation Project (SMDRP). Amended and restated on 21 February 1994 and 11 August
1994, the JVA was aimed at implementing a two-phase conversion of the Smokey Mountain Dumpsite "into a
habitable housing project inclusive of the reclamation of the area across Radial Road 10 (R-10)".
Subsequent to R-II Builders' infusion of ₱300 Million into the project, the issuance of the SMPPCs and
the termination of PNB’s services on 29 January 2001, NHA, R-II Builders and HGC agreed on the institution of
Planters Development Bank (PDB) as trustee on 29 January 2001. By 24 October 2002, however, all the
Regular SMPPCs issued had reached maturity and, unredeemed, already amounted to an aggregate face value
of ₱2.513 Billion. The lack of liquid assets with which to effect redemption of the regular SMPPCs prompted
PDB to make a call on HGC’s guaranty and to execute in the latter’s favor a Deed of Assignment and
Conveyance (DAC) of the entire Asset Pool.

On 1 September 2005, R-II Builders filed the complaint against HGC and NHA before Branch 24 of the
Manila Regional Trial Court, a Special Commercial Court (SCC).

On 26 October 2005, Branch 24 of the Manila RTC issued the writ of preliminary injunction sought by
R-II Builders which, upon the challenge thereto interposed by HGC, was later affirmed by the CA. Having filed
its answer to the complaint, in the meantime, HGC went on to move for the conduct of a preliminary hearing
on its affirmative defenses which included such grounds as lack of jurisdiction, improper venue and the then
pendency before this Court of G.R. No. 164537, entitled Francisco Chavez vs. National Housing Authority, et
al., a case which challenged, among other matters, the validity of the JVA and its subsequent amendments.  On
2 August 2007, R-II Builders, in turn, filed a motion to admit its Amended and Supplemental Complaint which
deleted the prayer for resolution of the DAC initially prayed for in its original complaint.

Consistent with its joint order dated 2 January 2008 which held that R-II Builders’ complaint was an
ordinary civil action and not an intra-corporate controversy,  Branch 24 of the Manila RTC issued a clarificatory
order dated 1 February 2008 to the effect, among other matters, that it did not have the authority to hear the
case. As a consequence, the case was re-raffled to respondent Branch 22 of the Manila RTC (respondent RTC)
which subsequently issued the 19 May 2008 order which, having determined that the case is a real action,
admitted the aforesaid Amended and Supplemental Complaint, subject to R-II Builders’ payment of the
"correct and appropriate" docket fees. 

On 2 September 2008, HGC filed its opposition to the admission of R-II Builders’ Second Amended
Complaint on the ground that respondent RTC had no jurisdiction to act on the case until payment of the
correct docket fees. Claiming that R-II Builders had defied respondent court’s order by refusing to pay the
correct docket fees, HGC additionally moved for the dismissal of the case pursuant to Section 3, Rule 17 of the
1997 Rules of Civil Procedure.

R-II Builders also filed an Urgent Ex-Parte Motion for Annotation of Lis Pendens on the titles of the
properties in the Asset Pool, on the ground that HGC had sold and/or was intending to dispose of portions
thereof, in violation of the writ of preliminary injunction issued in the premises. Finding that jurisdiction over
the case was already acquired upon payment of the docket fees for the original complaint and that the Second
Amended Complaint was neither intended for delay nor inconsistent with R-II Builders’ previous pleadings,
respondent RTC issued its first assailed order dated 3 March 2009 which: (a) denied HGC’s motion to dismiss;
(b) granted R-II Builders’ motion to admit its Second Amended Complaint; and, (c) noted R-II Builders’ Urgent
Ex-Parte Motion for Annotation of Lis Pendens, to which the attention of the Manila Register of Deeds was
additionally called.

Undaunted, HGC filed its 22 March 2009 motion for reconsideration of the foregoing order, arguing
that:

1. the case is real action and the docket fees paid by R-II Builders were grossly insufficient because
the estimated value of properties in the Asset Pool exceeds ₱5,000,000,000.00;

2. a complaint cannot be amended to confer jurisdiction when the court had none;

3. the RTC should have simply denied the Urgent Ex-Parte Motion for Annotation of Lis Pendens
instead of rendering an advisory opinion thereon.

In addition, HGC faulted R-II Builders with forum shopping, in view of its complaint before Branch 91 of
the Quezon City RTC, involving a claim for receivables from the NHA. 

On 29 September 2009, respondent RTC issued its second assailed order which (a) denied HGC’s motion for
reconsideration; (b) granted R-II Builders’ application for appointment of receiver.
 HGC’s motion for reconsideration of the foregoing decision was denied for lack of merit in the CA
hence, this petition.

ISSUES:

Whether or not the CA erred when it failed to rule that the Regional Trial Court had no jurisdiction to
proceed with the case considering that the original court was without the authority to hear the case.

Despite and equivocal order from the trial court, respondent R-II Builders failed and refused to pay the
correct and proper docket fees.

RULING:

The court find the petition with merits.

Jurisdiction is defined as the authority to hear and determine a cause or the right to act in a case.  In
addition to being conferred by the Constitution and the law, the rule is settled that a court’s jurisdiction over
the subject matter is determined by the relevant allegations in the complaint, the law in effect when the action
is filed, and the character of the relief sought irrespective of whether the plaintiff is entitled to all or some of
the claims asserted. Consistent with Section 1, Rule 141 of the Revised Rules of Court which provides that the
prescribed fees shall be paid in full "upon the filing of the pleading or other application which initiates an
action or proceeding", the well-entrenched rule is to the effect that a court acquires jurisdiction over a case
only upon the payment of the prescribed filing and docket fees.

The record shows that R-II Builders’ original complaint dated 23 August 2005 was initially docketed as
Civil Case No. 05-113407 before Branch 24 of the Manila, a designated Special Commercial Court. With HGC’s
filing of a motion for a preliminary hearing on the affirmative defenses asserted in its answer and R-II Builders’
filing of its Amended and Supplemental Complaint dated 31 July 2007, said court issued an order dated 2
January 2008 ordering the re-raffle of the case upon the finding that the same is not an intra-corporate
dispute. In a clarificatory order dated 1 February 2008, the same court significantly took cognizance of its lack
of jurisdiction over the case in the following wise:
 1. At the outset, it must be stated that this Court is a designated Special Commercial Court tasked to
try and hear, among others, intra-corporate controversies to the exclusion of ordinary civil cases.

2. When the case was initially assigned to this Court, it was classified as an intra-corporate case.
However, in the ensuing proceedings relative to the affirmative defenses raised by defendants,
even the plaintiff conceded that the case is not an intra-corporate controversy or even if it is, this
Court is without authority to hear the same as the parties are all housed in Quezon City.

We find that, having squarely raised the matter in its Rule 65 petition for certiorari and prohibition  HGC
correctly faults the CA for not finding that Branch 24 of the Manila RTC had no authority to order the transfer
of the case to respondent RTC.  Being outside the jurisdiction of Special Commercial Courts, the rule is settled
that cases which are civil in nature, like the one commenced by R-II Builders, should be threshed out in a
regular court. With its acknowledged lack of jurisdiction over the case, Branch 24 of the Manila RTC should
have ordered the dismissal of the complaint, since a court without subject matter jurisdiction cannot transfer
the case to another court.  Instead, it should have simply ordered the dismissal of the complaint, considering
that the affirmative defenses for which HGC sought hearing included its lack of jurisdiction over the case.

WHEREFORE, premises considered, the assailed Decision dated 21 January 2010 is REVERSED and SET
ASIDE. In lieu thereof, another is entered NULLIFYING the regular court’s, RTC Branch 22’s Orders dated 3
March 2009 and 29 September 2009 as well as the SCC’s, RTC Branch 24’s Order dated 26 October 2005 which
was rendered void by the SCC’s subsequent declaration of absence of authority over the case. The complaint
of R-II Builders docketed as Civil Case No. 05-113407 first before Br. 24 and thereafter before Br. 22 both of
the RTC of Manila is hereby DISMISSED.

PAYMENT OF FILING/DOCKET FEES-JURISDICTIONAL

G.R. Nos. 175277 & 175285               September 11, 2013

UNICAPITAL, INC., UNICAPITAL REALTY, INC., and JAIME J. MARTINEZ, Petitioners, 
vs.
RAFAEL JOSE CONSING, JR., and THE PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF PASIG CITY,
BRANCH 168, Respondents.

FACTS: Consing, Jr. filed a complaint, denominated as a Complex Action for Declaratory Relief and later
amended to Complex Action for Injunctive Relief before the RTC-Pasig City against Unicapital, URI, PBI,
Martirez, PBI General Manager Mariano Martinez (Martinez), Dela Cruz and Does 1-20.

Accordingly, Consing, Jr. prayed that: (a) he be declared as a mere agent of Dela Cruz, and as such, devoid of
any obligation to Unicapital, URI, and PBI for the transactions entered into concerning the subject property;
(b) Unicapital, URI, and PBI be enjoined from harassing or coercing him, and from speaking about him in a
derogatory fashion; and (c) Unicapital, URI, and PBI pay him actual and consequential damages in the amount
of ₱2,000,000.00, moral damages of at least ₱1,000,000.00, exemplary damages of ₱1,000,000.00, all per
month, reckoned from May 1, 1999 and until the controversy is resolved, and attorney's fees and costs of suit.
Unicapital, URI, and Martinez (Unicapital, et al.) filed separate Motions to Dismiss Consing, Jr.’s complaint on
the ground of failure to state a cause of action. Moreover, Unicapital, et al. posited that the RTC-Pasig City did
not acquire jurisdiction over the case given that Consing, Jr. failed to pay the proper amount of docket fees.

PBI and its General Manager, Martinez (Unicapital and PBI, et al.), sought the dismissal of Consing, Jr.’s
complaint on the ground that it does not state a cause of action.

The RTC-Pasig City denied the motions to dismiss, holding that Consing, Jr.’s complaint sufficiently stated a
cause of action for tort and damages pursuant to Article 19 of the Civil Code. It ruled that where there is
abusive behavior, a complainant, like Consing, Jr., has the right to seek refuge from the courts. It equally
refused to dismiss the action on the ground of non-payment of docket fees, despite Consing, Jr.’s escalated
claims for damages therein, as jurisdiction was already vested in it upon the filing of the original complaint.
Moreover, it resolved to apply the liberal construction rule as regards the subject complaint’s verification and
certification, despite its improper wording, considering further that such defect was not raised at the first
opportunity.

Unicapital and PBI, et al. moved for reconsideration which was, however, denied by the RTC-Pasig City.

The CA, in its Joint Decision, ruled that while the payment of the prescribed docket fee is a jurisdictional
requirement, its non-payment will not automatically cause the dismissal of the case. In this regard, it
considered that should there be any deficiency in the payment of such fees, the same shall constitute a lien on
the judgment award. Anent the substantive issues of the case, the CA concurred with the RTC-Pasig City that
Consing Jr.'s complaint states a cause of action.

Unicapital, et al. sought reconsideration but the same was denied by the CA. Hence, the present petition.

ISSUE: W/N the CA erred in upholding the RTC-Pasig City’s denial of Unicapital, et al.’s motion to dismiss. NO

RULING:

Propriety of the denial of Unicapital, et al.’s motion to dismiss and ancillary issues.

The Court finds NO reversible error on the part of the CA in sustaining the RTC-Pasig City’s denial of Unicapital
et al.’s motion to dismiss.

Neither should Consing, Jr.’s failure to pay the required docket fees lead to the dismissal of his complaint. It
has long been settled that while the court acquires jurisdiction over any case only upon the payment of the
prescribed docket fees, its non-payment at the time of the filing of the complaint does not automatically cause
the dismissal of the complaint provided that the fees are paid within a reasonable period. Consequently,
Unicapital, et al.’s insistence that the stringent rule on non-payment of docket fees enunciated in the case of
Manchester Development Corporation v. CA should be applied in this case cannot be sustained in the absence
of proof that Consing, Jr. intended to defraud the government by his failure to pay the correct amount of filing
fees. 

As pronounced in the case of Heirs of Bertuldo Hinog v. Hon. Melicor:

Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its non-payment
at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the
applicable prescriptive or reglementary period, more so when the party involved demonstrates a willingness
to abide by the rules prescribing such payment.

Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the
government, the Manchester rule does not apply.

Indeed, while the Court acknowledges Unicapital, et al.'s apprehension that Consing, Jr.'s "metered" claim for
damages to the tune of around ₱2,000,000.00 per month may balloon to a rather huge amount by the time
that this case is finally disposed of, still, any amount that may by then fall due shall be subject to assessment
and any additional fees determined shall constitute as a lien against the judgment as explicitly provided under
Section 2, Rule 141 of the Rules.

GENERAL JURISDICTION – REGIONAL TRIAL COURT

G.R. No. 121106               February 20, 2002

DURISOL PHILIPPINES, INC., petitioner, 
vs.
COURT OF APPEALS, HON. ADRIANO R. OSORIO, Judge, RTC, Branch 171, Valenzuela, Metro Manila,
DEVELOPMENT BANK OF THE PHILIPPINES, MANILA FERTILIZERS, INC., POLAR MINES AND DEVELOPMENT
CORPORATION, SPOUSES ISABEL S. VILLARAMA and CONRADO D. VILLARAMA, SPOUSES MARIBEL
CABRALES and DANILO CABRALES, ROLANDO ANG SEE, SPOUSES ALEXANDER GABRIEL and MARILOU GO
GABRIEL and REMEDIOS REYES, respondents.

FACTS: Petitioner Durisol obtained industrial loans from respondent Development Bank of the Philippines
(DBP) amounting to P1,213,000.00 and P2,698,800.00, respectively. As security therefor, petitioner executed a
mortgage on two parcels of registered land located in Polo (now Valenzuela), Bulacan.

After petitioner defaulted in the payment of the loans, DBP instituted a petition for the extrajudicial
foreclosure of mortgage.

Petitioner’s president, Rene Knecht, borrowed from DBP the two TCT’s purportedly to obtain new titles in
accordance with the approved subdivision plan of the properties. DBP agreed provided that the bank’s existing
encumbrances, including the mortgage, shall be annotated on all the new certificates of title.

In the meantime, the foreclosure sale was held, wherein DBP emerged as the highest bidder. The
corresponding certificates of sale were issued to DBP.

Petitioner, however, filed a complaint for annulment of the extrajudicial foreclosure before the then Court of
First Instance (CFI) of Valenzuela, Bulacan. The CFI rendered judgment upholding the validity of the
foreclosure. Petitioner appealed to the Court of Appeals, which affirmed the decision of the CFI. The decision
of the Court of Appeals became final on April 30, 1975.

Contrary to its promise, however, petitioner never returned the titles to the properties to DBP. Thus, despite
having purchased the properties at the foreclosure sale, DBP was unable to register the property in its name.
On February 25, 1977, DBP instituted before the Court of First Instance of Valenzuela, Bulacan, Branch VIII, a
petition for surrender of the owner’s duplicate titles covering the foreclosed properties.
Petitioner filed its answer, raising the defenses that the petition fails to state a cause of action; that it had
already paid its loans to DBP; that it had a valid adverse claim on the properties covered by the 7 new titles;
and that DBP’s action was barred by laches and estoppel. DBP filed a reply alleging that petitioner failed to
exercise its right of redemption of the properties which were sold at public auction after foreclosure of the
mortgage thereof.

The trial court held and ordered Durisol through its President and General Manager to surrender and deliver
the 7 owner’s duplicate of TCT’s, all of Bulacan Registry, to the Clerk of Court, or to the petitioner, within 5
days from receipt of the resolution.

Respondent DBP, thus, filed a motion for execution, which was granted. Subsequently, on motion of DBP, an
Order was issued directing the Register of Deeds of Bulacan to cancel the seven titles and to issue new ones in
lieu thereof. Accordingly, new certificates of title were issued to DBP.

Thereafter, DBP sold the lots to Manila Fertilizers, Inc. The latter, in turn, sold the lots  to Polar Mines and
Development Corporation. On the other hand, one of the properties was also sold by DBP to respondent
spouses Villarama, and to respondents Rolando Ang See, Remedios Reyes, the spouses Cabrales and the
spouses Go Gabriel.

More than 4 years later, petitioner instituted before the CA a petition to annul the trial court’s decision and
Resolution, alleging for the first time that the trial court had no jurisdiction over the case and prayed that the
certificates of title issued in the names of all private respondents, except DBP, be annulled.

The CA rendered decision dismissing the petition for annulment of judgment. Petitioner Durisol’s subsequent
motion for reconsideration was likewise denied for lack of merit.

Hence this petition.

ISSUES:

1. W/N the trial court had jurisdiction over the petition for issuance of new duplicate owner’s certificate of
title.

2. W/N petitioner was estopped from challenging the court’s lack of jurisdiction.

3. W/N the then CFI had no jurisdiction when the case was remanded to it by the then IAC because as a
cadastral court, the CFI had limited jurisdiction.

RULING:

1. YES. The first paragraph of Rule 47, Section 2, of the 1997 Rules of Civil Procedure provides:

Grounds for annulment. — The annulment may be based only on the ground of extrinsic fraud and lack of
jurisdiction.

At the outset, it should be stressed that in a petition for annulment of judgment based on lack of jurisdiction,
petitioner must show not merely an abuse of jurisdictional discretion but an absolute lack of jurisdiction. Lack
of jurisdiction means absence of or no jurisdiction, that is, the court should not have taken cognizance of the
petition because the law does not vest it with jurisdiction over the subject matter. Jurisdiction over the nature
of the action or subject matter is conferred by law.

The regional trial court, formerly the court of first instance, is a court of general jurisdiction. All cases, the
jurisdiction over which is not specifically provided for by law to be within the jurisdiction of any other court,
fall under the jurisdiction of the regional trial court. But the regional trial court is also a court of limited
jurisdiction over, among others, cadastral and land registration cases. All proceedings involving title to real
property, or specifically land registration cases, including its incidents such as the issuance of owner’s
duplicate certificate of title, are matters cognizable by the regional trial courts. It has been ruled that the
regional trial courts have jurisdiction over all actions involving possession of land, except forcible entry and
illegal detainer.

Respondent DBP, after petitioner’s president unjustly refused to comply with the directive of the trial court to
surrender the 7 certificates of title, filed a petition under Section 107 of the Property Registration Decree
(Presidential Decree No. 1529), to wit:

Surrender of withheld duplicate certificates. --- Where it is necessary to issue a new certificate of title pursuant
to any involuntary instrument which divests the title of the registered owner against his consent of where a
voluntary instrument cannot be registered by reason of the refusal or failure of the holder to surrender the
owner’s duplicate certificate of title, the party in interest may file a petition in court to compel the surrender
of the same to the Register of Deeds. The court, after hearing, may order the registered owner or any person
withholding the duplicate certificate to surrender the same, and direct the entry of a new certificate or
memorandum upon such surrender. If the person withholding the duplicate certificate is not amenable to the
process of the court, or if for any reason the outstanding owner’s duplicate certificate cannot be delivered, the
court may order the annulment of the same as well as the issuance of a new certificate of title in lieu thereof.
Such new certificate and all duplicates thereof shall contain a memorandum of the annulment of the
outstanding duplicate.

The term "court" in the above-quoted section refers to Courts of First Instance, now Regional Trial Courts, as
provided in Section 2 of the Property Registration Decree.

Even assuming arguendo that the regional trial court had no jurisdiction over the surrender of duplicate title,
petitioner can no longer raise this ground after having actively participated in the prosecution of the case. A
judgment rendered by a trial court for alleged lack of jurisdiction cannot be considered void where the party
who has the right to challenge it failed to do so at the first instance. In the case at bar, petitioner did not raise
the defense of lack of jurisdiction in its answer to respondent DBP’s petition for surrender of owner’s duplicate
certificate. Neither did petitioner file any motion to dismiss on this ground. On the contrary, petitioner raised
the affirmative defenses of failure to state a cause of action and payment. To be sure, a court’s lack of
jurisdiction over the subject matter and the failure of the complaint to state a cause of action are distinct and
separate grounds for dismissal of a case.

As stated, petitioner actively participated in the course of the proceedings both in the trial court and in the
appellate court. In its motion for reconsideration, petitioner assailed the merits of the decision without raising
any argument pertaining to lack of jurisdiction of the trial court. When the case was elevated to the IAC and
when the case was remanded to the trial court, petitioner did not allege lack of jurisdiction. In its motion for
reconsideration of the trial court’s order directing the issuance of new certificates of title, petitioner again
failed to raise the ground of lack of jurisdiction.
2. YES. Indeed, it was only two decades after the institution of the case at bar, when the issue of lack of
jurisdiction was first raised. However, it is already too late since the judgment had already attained finality,
considering that more than four years have elapsed without any action from petitioner.

Rule 47, Section 3 expressly provides that a petition for annulment of judgment based on lack of jurisdiction
must be filed before it is barred by laches or estoppel. Hence, it has been held that while jurisdiction over the
subject matter of a case may be raised at any time of the proceedings, this rule presupposes that laches or
estoppel has not supervened. 

Here, the principle of estoppel lies. Hence, a party may be estopped or barred from raising the question of
jurisdiction for the first time in a petition before the Supreme Court when it failed to do so in the early stages
of the proceedings.

3. The CFI had jurisdiction. It should be noted, however, that when the CFI took cognizance of the remanded
case, the distinction between the CFI acting as a land registration court with limited jurisdiction, on the one
hand, and a CFI acting as an ordinary court exercising general jurisdiction, on the other hand, has already been
removed with the effectivity of the Property Registration Decree (PD 1529). The amendment was aimed at
avoiding multiplicity of suits. The change has simplified registration proceedings by conferring upon the
designated trial courts the authority to act not only on applications for "original registration" but also "over all
petitions filed after original registration of title, with power to hear and determine all questions arising from
such applications or petition."