THIRD DIVISION
thereon from 1 October 2004 to 31
G.R. No. 175914               February 10,
2009
RUBY SHELTER BUILDERS AND
REALTY DEVELOPMENT
CORPORATION, Petitioner,
vs.
HON. PABLO C. FORMARAN III,
Presiding Judge of Regional Trial Court
Branch 21, Naga City, as Pairing Judge
for Regional Trial Court Branch 22,
Formerly Presided By HON. NOVELITA
VILLEGAS-LLAGUNO (Retired 01 May
2006), ROMEO Y. TAN, ROBERTO L.
OBIEDO and ATTY. TOMAS A.
REYES, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on
Certiorari under Rule 45 of the Rules of
Court seeking the reversal of the
Decision1 dated 22 November 2006 of the
Court of Appeals in CA-G.R. SP No. 94800.
The Court of Appeals, in its assailed
Decision, affirmed the Order2 dated 24
March 2006 of the Regional Trial Court
(RTC), Branch 22, of Naga City, in Civil
Case No. RTC-2006-0030, ordering
petitioner Ruby Shelter Builders and Realty
Development Corporation to pay additional
docket/filing fees, computed based on
Section 7(a) of Rule 141 of the Rules of
Court, as amended.
The present Petition arose from the
following facts:
Petitioner obtained a loan3 in the total
amount of ₱95,700,620.00 from
respondents Romeo Y. Tan (Tan) and
Roberto L. Obiedo (Obiedo), secured by
real estate mortgages over five parcels of
land, all located in Triangulo, Naga City,
covered by Transfer Certificates of Title
(TCTs) No. 38376,4 No. 29918,5 No.
38374,  No. 39232,  and No. 39225,8 issued
6 7
by the Registry of Deeds for Naga City, in
the name of petitioner. When petitioner was
unable to pay the loan when it became due
and demandable, respondents Tan and
Obiedo agreed to an extension of the same.
In a Memorandum of Agreement9 dated 17
March 2005, respondents Tan and Obiedo
granted petitioner until 31 December 2005
to settle its indebtedness, and condoned the
interests, penalties and surcharges accruing
December 2005 which amounted to
₱74,678,647.00. The Memorandum of
Agreement required, in turn, that petitioner
execute simultaneously with the said
Memorandum, "by way of dacion en pago,"
Deeds of Absolute Sale in favor of
respondents Tan and Obiedo, covering the
same parcels of land subject of the
mortgages. The Deeds of Absolute Sale
would be uniformly dated 2 January 2006,
and state that petitioner sold to respondents
Tan and Obiedo the parcels of land for the
following purchase prices:
TCT No. Purchase Price
38376 ₱ 9,340,000.00
29918 ₱ 28,000,000.00
38374 ₱ 12,000,000.00
39232 ₱ 1,600,000.00
39225 ₱ 1,600,000.00
Petitioner could choose to pay off its
indebtedness with individual or all five
parcels of land; or it could redeem said
properties by paying respondents Tan and
Obiedo the following prices for the same,
inclusive of interest and penalties:
TCT No. Redemption Price
38376 ₱ 25,328,939.00
29918 ₱ 35,660,800.00
38374 ₱ 28,477,600.00
39232 ₱ 6,233,381.00
39225 ₱ 6,233,381.00
In the event that petitioner is able to redeem
any of the afore-mentioned parcels of land,
the Deed of Absolute Sale covering the said
property shall be nullified and have no force
and effect; and respondents Tan and
Obiedo shall then return the owner’s
duplicate of the corresponding TCT to
petitioner and also execute a Deed of
Discharge of Mortgage. However, if
petitioner is unable to redeem the parcels of
land within the period agreed upon,
respondents Tan and Obiedo could already
present the Deeds of Absolute Sale
covering the same to the Office of the
Register of Deeds for Naga City so
respondents Tan and Obiedo could acquire
TCTs to the said properties in their names.
The Memorandum of Agreement further
provided that should petitioner contest,
judicially or otherwise, any act, transaction,
or event related to or necessarily connected
with the said Memorandum and the Deeds
of Absolute Sale involving the five parcels of
land, it would pay respondents Tan and
Obiedo ₱10,000,000.00 as liquidated
damages inclusive of costs and attorney’s
fees. Petitioner would likewise pay
respondents Tan and Obiedo the condoned
interests, surcharges and
penalties.10 Finally, should a contest arise
from the Memorandum of Agreement, Mr.
Ruben Sia (Sia), President of petitioner
corporation, personally assumes, jointly and
severally with petitioner, the latter’s
monetary obligation to respondent Tan and
Obiedo.
Respondent Atty. Tomas A. Reyes (Reyes)
was the Notary Public who notarized the
Memorandum of Agreement dated 17
March 2005 between respondent Tan and
Obiedo, on one hand, and petitioner, on the
other.
Pursuant to the Memorandum of
Agreement, petitioner, represented by Mr.
Sia, executed separate Deeds of Absolute
Sale,11 over the five parcels of land, in favor
of respondents Tan and Obiedo. On the
blank spaces provided for in the said
Deeds, somebody wrote the 3rd of January
2006 as the date of their execution. The
Deeds were again notarized by respondent
Atty. Reyes also on 3 January 2006.
Without payment having been made by
petitioner on 31 December 2005,
respondents Tan and Obiedo presented the
Deeds of Absolute Sale dated 3 January
2006 before the Register of Deeds of Naga
City on 8 March 2006, as a result of which,
they were able to secure TCTs over the five
parcels of land in their names.
On 16 March 2006, petitioner filed before
the RTC a Complaint12 against respondents
Tan, Obiedo, and Atty. Reyes, for
declaration of nullity of deeds of sales and
damages, with prayer for the issuance of a
writ of preliminary injunction and/or
temporary restraining order (TRO). The
Complaint was docketed as Civil Case No.
2006-0030.
On the basis of the facts already recounted
above, petitioner raised two causes of
action in its Complaint.
As for the first cause of action, petitioner
alleged that as early as 27 December 2005,
its President already wrote a letter informing
respondents Tan and Obiedo of the
intention of petitioner to pay its loan and
requesting a meeting to compute the final
amount due. The parties held meetings on 3
and 4 January 2006 but they failed to arrive
at a mutually acceptable computation of the
final amount of loan payable. Respondents
Tan and Obiedo then refused the request of
petitioner for further dialogues.
Unbeknownst to petitioner, despite the
ongoing meetings, respondents Tan and
Obiedo, in evident bad faith, already had the
pre-executed Deeds of Absolute Sale
notarized on 3 January 2006 by respondent
Atty. Reyes. Atty. Reyes, in connivance with
respondents Tan and Obiedo, falsely made
it appear in the Deeds of Absolute Sale that
Mr. Sia had personally
acknowledged/ratified the said Deeds
before Atty. Reyes.
Asserting that the Deeds of Absolute Sale
over the five parcels of land were executed
merely as security for the payment of its
loan to respondents Tan and Obiedo; that
the Deeds of Absolute Sale, executed in
accordance with the Memorandum of
Agreement, constituted pactum
commisorium and as such, were null and
void; and that the acknowledgment in the
Deeds of Absolute Sale were falsified,
petitioner averred:
13. That by reason of the fraudulent actions
by the [herein respondents], [herein
petitioner] is prejudiced and is now in
danger of being deprived, physically and
legally, of the mortgaged properties without
benefit of legal processes such as the
remedy of foreclosure and its attendant
procedures, solemnities and remedies
available to a mortgagor, while [petitioner] is
desirous and willing to pay its obligation and
have the mortgaged properties released.13
In support of its second cause of action,
petitioner narrated in its Complaint that on
18 January 2006, respondents Tan and
Obiedo forcibly took over, with the use of
armed men, possession of the five parcels
of land subject of the falsified Deeds of
Absolute Sale and fenced the said
properties with barbed wire. Beginning 3
March 2006, respondents Tan and Obiedo
started demolishing some of the commercial
spaces standing on the parcels of land in
question which were being rented out by
petitioner. Respondents Tan and Obiedo
were also about to tear down a principal
improvement on the properties consisting of
a steel-and-concrete structure housing a
motor vehicle terminal operated by
petitioner. The actions of respondents Tan
and Obiedo were to the damage and
prejudice of petitioner and its
tenants/lessees. Petitioner, alone, claimed
to have suffered at least ₱300,000.00 in
actual damages by reason of the physical
invasion by respondents Tan and Obiedo
and their armed goons of the five parcels of
land.
Ultimately, petitioner’s prayer in its
Complaint reads:
WHEREFORE, premises considered, it is
most respectfully prayed of this Honorable
Court that upon the filing of this complaint, a
72-hour temporary restraining order be
forthwith issued ex parte:
(a) Restraining [herein respondents]
Tan and Obiedo, their agents,
privies or representatives, from
committing act/s tending to alienate
the mortgaged properties from the
[herein petitioner] pending the
resolution of the case, including but
not limited to the acts complained of
in paragraph "14", above;
(b) Restraining the Register of
Deeds of Naga City from
entertaining moves by the
[respondents] to have [petitioner’s]
certificates of title to the mortgaged
properties cancelled and
changed/registered in [respondents]
Tan’s and Obiedo’s names, and/or
released to them;
(c) After notice and hearing, that a
writ of preliminary injunction be
issued imposing the same restraints
indicated in the next preceding two
paragraphs of this prayer; and
(d) After trial, judgment be rendered:
1. Making the injunction
permanent;
2. Declaring the provision in
the Memorandum of
Agreement requiring the
[petitioner] to execute deed
of sales (sic) in favor of the
[respondents Tan and
Obiedo] as dacion en pago in
the event of non-payment of
the debt as pactum
commissorium;
3. Annulling the Deed[s] of
Sale for TCT Nos. 29918,
38374, 38376, 39225 and
39232, all dated January 3,
2006, the same being in
contravention of law;
4. Ordering the [respondents]
jointly and solidarily to pay
the [petitioner] actual
damages of at least
₱300,000.00; attorney’s fees
in the amount of
₱100,000.00 plus P1,000.00
per court attendance of
counsel as appearance fee;
litigation expenses in the
amount of at least
₱10,000.00 and exemplary
damages in the amount of
₱300,000.00, plus the costs.
[Petitioner] further prays for such other
reliefs as may be proper, just and equitable
under the premises.14
Upon filing its Complaint with the RTC on 16
March 2006, petitioner paid the sum of
₱13,644.25 for docket and other legal fees,
as assessed by the Office of the Clerk of
Court. The Clerk of Court initially considered
Civil Case No. 2006-0030 as an action
incapable of pecuniary estimation and
computed the docket and other legal fees
due thereon according to Section 7(b)(1),
Rule 141 of the Rules of Court.
Only respondent Tan filed an Answer15 to
the Complaint of petitioner. Respondent Tan
did admit that meetings were held with Mr.
Sia, as the representative of petitioner, to
thresh out Mr. Sia’s charge that the
computation by respondents Tan and
Obiedo of the interests, surcharges and
penalties accruing on the loan of petitioner
was replete with errors and uncertainties.
However, Mr. Sia failed to back up his
accusation of errors and uncertainties and
to present his own final computation of the
amount due. Disappointed and
exasperated, respondents Tan and Obiedo
informed Mr. Sia that they had already
asked respondent Atty. Reyes to come over
to notarize the Deeds of Absolute Sale.
Respondent Atty. Reyes asked Mr. Sia
whether it was his signature appearing
above his printed name on the Deeds of
Absolute Sale, to which Mr. Sia replied yes.
On 4 January 2006, Mr. Sia still failed to
establish his claim of errors and
uncertainties in the computation of the total
amount which petitioner must pay
respondent Tan and Obiedo. Mr. Sia,
instead, sought a nine-month extension for
paying the loan obligation of petitioner and
the reduction of the interest rate thereon to
only one percent (1%) per month.
Respondents Tan and Obiedo rejected both
demands.
Respondent Tan maintained that the Deeds
of Absolute Sale were not executed merely
as securities for the loan of petitioner. The
Deeds of Absolute Sale over the five
parcels of land were the consideration for
the payment of the total indebtedness of
petitioner to respondents Tan and Obiedo,
and the condonation of the 15-month
interest which already accrued on the loan,
while providing petitioner with the golden
opportunity to still redeem all or even
portions of the properties covered by said
Deeds. Unfortunately, petitioner failed to
exercise its right to redeem any of the said
properties.
Belying that they forcibly took possession of
the five parcels of land, respondent Tan
alleged that it was Mr. Sia who, with the aid
of armed men, on board a Sports Utility
Vehicle and a truck, rammed into the
personnel of respondents Tan and Obiedo
causing melee and disturbance. Moreover,
by the execution of the Deeds of Absolute
Sale, the properties subject thereof were,
ipso jure, delivered to respondents Tan and
Obiedo. The demolition of the existing
structures on the properties was nothing but
an exercise of dominion by respondents
Tan and Obiedo.
Respondent Tan, thus, sought not just the
dismissal of the Complaint of petitioner, but
also the grant of his counterclaim. The
prayer in his Answer is faithfully reproduced
below:
Wherefore, premises considered, it is most
respectfully prayed that, after due hearing,
judgment be rendered dismissing the
complaint, and on the counterclaim, [herein
petitioner] and Ruben Sia, be ordered to
indemnify, jointly and severally [herein
respondents Tan and Obiedo] the amounts
of not less than ₱10,000,000.00 as
liquidated damages and the further sum of
not less than ₱500,000.00 as attorney’s
fees. In the alternative, and should it
become necessary, it is hereby prayed that
[petitioner] be ordered to pay herein
[respondents Tan and Obiedo] the entire
principal loan of ₱95,700,620.00, plus
interests, surcharges and penalties
computed from March 17, 2005 until the
entire sum is fully paid, including the
amount of ₱74,678,647.00 foregone interest
covering the period from October 1, 2004 to
December 31, 2005 or for a total of fifteen
(15) months, plus incidental expenses as
may be proved in court, in the event that
Annexes "G" to "L" be nullified. Other relief
and remedies as are just and equitable
under the premises are hereby prayed for.16
Thereafter, respondent Tan filed before the
RTC an Omnibus Motion in which he
contended that Civil Case No. 2006-0030
involved real properties, the docket fees for
which should be computed in accordance
with Section 7(a), not Section 7(b)(1), of
Rule 141 of the Rules of Court, as amended
by A.M. No. 04-2-04-SC which took effect
on 16 August 2004. Since petitioner did not
pay the appropriate docket fees for Civil
Case No. 2006-0030, the RTC did not
acquire jurisdiction over the said case.
Hence, respondent Tan asked the RTC to
issue an order requiring petitioner to pay the
correct and accurate docket fees pursuant
to Section 7(a), Rule 141 of the Rules of
Court, as amended; and should petitioner
fail to do so, to deny and dismiss the prayer
of petitioner for the annulment of the Deeds
of Absolute Sale for having been executed
in contravention of the law or of the
Memorandum of Agreement as pactum
commisorium.
As required by the RTC, the parties
submitted their Position Papers on the
matter. On 24 March 2006, the RTC issued
an Order17 granting respondent Tan’s
Omnibus Motion. In holding that both
petitioner and respondent Tan must pay
docket fees in accordance with Section 7(a),
Rule 141 of the Rules of Court, as
amended, the RTC reasoned:
It must be noted that under paragraph (b) 2.
of the said Section 7, it is provided that
QUIETING OF TITLE which is an action
classified as beyond pecuniary estimation
"shall be governed by paragraph (a)".
Hence, the filing fee in an action for
Declaration of Nullity of Deed which is also
classified as beyond pecuniary estimation,
must be computed based on the provision
of Section 7(A) herein-above, in part,
quoted.
Since [herein respondent], Romeo Tan in
his Answer has a counterclaim against the
plaintiff, the former must likewise pay the
necessary filling (sic) fees as provided for
under Section 7 (A) of Amended
Administrative Circular No. 35-2004 issued
by the Supreme Court.18
Consequently, the RTC decreed on the
matter of docket/filing fees:
WHEREFORE, premises considered, the
[herein petitioner] is hereby ordered to pay
additional filing fee and the [herein
respondent], Romeo Tan is also ordered to
pay docket and filing fees on his
counterclaim, both computed based on
Section 7(a) of the Supreme Court
Amended Administrative Circular No. 35-
2004 within fifteen (15) days from receipt of
this Order to the Clerk of Court, Regional
Trial Court, Naga City and for the latter to
compute and to collect the said fees
accordingly.19
Petitioner moved20 for the partial
reconsideration of the 24 March 2006 Order
of the RTC, arguing that Civil Case No.
2006-0030 was principally for the annulment
of the Deeds of Absolute Sale and, as such,
incapable of pecuniary estimation. Petitioner
submitted that the RTC erred in applying
Section 7(a), Rule 141 of the Rules of
Court, as amended, to petitioner’s first
cause of action in its Complaint in Civil
Case No. 2006-0030.
In its Order21 dated 29 March 2006, the RTC
refused to reconsider its 24 March 2006
Order, based on the following ratiocination:
Analyzing, the action herein pertains to real
property, for as admitted by the [herein
petitioner], "the deeds of sale in question
pertain to real property" x x x. The Deeds of
Sale subject of the instant case have
already been transferred in the name of the
[herein respondents Tan and Obiedo].
Compared with Quieting of Title, the latter
action is brought when there is cloud on the
title to real property or any interest therein
or to prevent a cloud from being cast upon
title to the real property (Art. 476, Civil Code
of the Philippines) and the plaintiff must
have legal or equitable title to or interest in
the real property which is the subject matter
of the action (Art. 447, ibid.), and yet plaintiff
in QUIETING OF TITLE is required to pay
the fees in accordance with paragraph (a) of
Section 7 of the said Amended
Administrative Circular No. 35-2004, hence,
with more reason that the [petitioner] who
no longer has title to the real properties
subject of the instant case must be required
to pay the required fees in accordance with
Section 7(a) of the Amended Administrative
Circular No. 35-2004 afore-mentioned.
Furthermore, while [petitioner] claims that
the action for declaration of nullity of deed of
sale and memorandum of agreement is one
incapable of pecuniary estimation, however,
as argued by the [respondent Tan], the
issue as to how much filing and docket fees
should be paid was never raised as an
issue in the case of Russell vs. Vestil, 304
SCRA 738.
xxxx
WHEREFORE, the Motion for Partial
Reconsideration is hereby DENIED.22
In a letter dated 19 April 2006, the RTC
Clerk of Court computed, upon the request
of counsel for the petitioner, the additional
docket fees petitioner must pay for in Civil
Case No. 2006-0030 as directed in the
afore-mentioned RTC Orders. Per the
computation of the RTC Clerk of Court, after
excluding the amount petitioner previously
paid on 16 March 2006, petitioner must still
pay the amount of ₱720,392.60 as docket
fees.23
Petitioner, however, had not yet conceded,
and it filed a Petition for Certiorari with the
Court of Appeals; the petition was docketed
as CA-G.R. SP No. 94800. According to
petitioner, the RTC24 acted with grave abuse
of discretion, amounting to lack or excess of
jurisdiction, when it issued its Orders dated
24 March 2006 and 29 March 2006
mandating that the docket/filing fees for Civil
Case No. 2006-0030, an action for
annulment of deeds of sale, be assessed
under Section 7(a), Rule 141 of the Rules of
Court, as amended. If the Orders would not
be revoked, corrected, or rectified, petitioner
would suffer grave injustice and irreparable
damage.
On 22 November 2006, the Court of
Appeals promulgated its Decision wherein it
held that:
Clearly, the petitioner’s complaint involves
not only the annulment of the deeds of sale,
but also the recovery of the real properties
identified in the said documents. In other
words, the objectives of the petitioner in
filing the complaint were to cancel the
deeds of sale and ultimately, to recover
possession of the same. It is therefore a
real action.
Consequently, the additional docket fees
that must be paid cannot be assessed in
accordance with Section 7(b). As a real
action, Section 7(a) must be applied in the
assessment and payment of the proper
docket fee.
Resultantly, there is no grave abuse of
discretion amounting to lack or excess of
jurisdiction on the part of the court a quo. By
grave abuse of discretion is meant
capricious and whimsical exercise of
judgment as is equivalent to lack of
jurisdiction, and mere abuse of discretion is
not enough – it must be grave. The abuse
must be grave and patent, and it must be
shown that the discretion was exercised
arbitrarily and despotically.1avvphi1
Such a situation does not exist in this
particular case. The evidence is insufficient
to prove that the court a quo acted
despotically in rendering the assailed
orders. It acted properly and in accordance
with law. Hence, error cannot be attributed
to it.25
Hence, the fallo of the Decision of the
appellate court reads:
WHEREFORE, the petition for certiorari is
DENIED. The assailed Orders of the court a
quo are AFFIRMED.26
Without seeking reconsideration of the
foregoing Decision with the Court of
Appeals, petitioner filed its Petition for
Review on Certiorari before this Court, with
a lone assignment of error, to wit:
18. The herein petitioner most respectfully
submits that the Court of Appeals
committed a grave and serious reversible
error in affirming the assailed Orders of the
Regional Trial Court which are clearly
contrary to the pronouncement of this
Honorable Court in the case of Spouses De
Leon v. Court of Appeals, G.R. No. 104796,
March 6, 1998, not to mention the fact that if
the said judgment is allowed to stand and
not rectified, the same would result in grave
injustice and irreparable damage to herein
petitioner in view of the prohibitive amount
assessed as a consequence of said
Orders.27
In Manchester Development Corporation v.
Court of Appeals,28 the Court explicitly
pronounced that "[t]he court acquires
jurisdiction over any case only upon the
payment of the prescribed docket fee."
Hence, the payment of docket fees is not
only mandatory, but also jurisdictional.
In Sun Insurance Office, Ltd. (SIOL) v.
Asuncion,29 the Court laid down guidelines
for the implementation of its previous
pronouncement in Manchester under
particular circumstances, to wit:
1. 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
reglementary period.
2. The same rule applies to
permissive counterclaims, third-party
claims and similar pleadings, which
shall not be considered filed until
and unless the filing fee prescribed
therefor is paid. The court may also
allow payment of said fee within a
reasonable time but also in no case
beyond its applicable prescriptive or
reglementary period.
3. Where the trial court acquires
jurisdiction over a claim by the filing
of the appropriate pleading and
payment of the prescribed filing fee
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
therefor 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.
In the Petition at bar, the RTC found, and
the Court of Appeals affirmed, that petitioner
did not pay the correct amount of docket
fees for Civil Case No. 2006-0030.
According to both the trial and appellate
courts, petitioner should pay docket fees in
accordance with Section 7(a), Rule 141 of
the Rules of Court, as amended. Consistent
with the liberal tenor of Sun Insurance, the
RTC, instead of dismissing outright
petitioner’s Complaint in Civil Case No.
2006-0030, granted petitioner time to pay
the additional docket fees. Despite the
seeming munificence of the RTC, petitioner
refused to pay the additional docket fees
assessed against it, believing that it had
already paid the correct amount before,
pursuant to Section 7(b)(1), Rule 141 of the
Rules of Court, as amended.
Relevant to the present controversy are the
following provisions under Rule 141 of the
Rules of Court, as amended by A.M. No.
04-2-04-SC30 and Supreme Court Amended
Administrative Circular No. 35-200431 :
SEC. 7. Clerks of Regional Trial Courts. –
(a) For filing an action or a permissive OR
COMPULSORY counterclaim, CROSS-
CLAIM, or money claim against an estate
not based on judgment, or for filing a third-
party, fourth-party, etc. complaint, or a
complaint-in-intervention, if the total sum
claimed, INCLUSIVE OF INTERESTS,
PENALTIES, SURCHARGES, DAMAGES
OF WHATEVER KIND, AND ATTORNEY’S
FEES, LITIGATIO NEXPENSES AND
COSTS and/or in cases involving property,
the FAIR MARKET value of the REAL
property in litigation STATED IN THE
CURRENT TAX DECLARATION OR
CURRENT ZONAL VALUATION OF THE
BUREAU OF INTERNAL REVENUE,
WHICHEVER IS HIGHER, OR IF THERE IS
NONE, THE STATED VALUE OF THE
PROPERTY IN LITIGATION OR THE
VALUE OF THE PERSONAL PROPERTY
IN LITIGATION OR THE VALUE OF THE
PERSONAL PROPERTY IN LITIGATION
AS ALLEGED BY THE CLAIMANT, is:
[Table of fees omitted.]
If the action involves both a money claim
and relief pertaining to property, then THE
fees will be charged on both the amounts
claimed and value of property based on the
formula prescribed in this paragraph a.
(b) For filing:
1. Actions where the value of the
subject matter cannot be estimated
2. Special civil actions, except
judicial foreclosure of mortgage,
EXPROPRIATION PROCEEDINGS,
PARTITION AND QUIETING OF
TITLE which will
3. All other actions not involving
property
[Table of fees omitted.]
The docket fees under Section 7(a), Rule
141, in cases involving real property depend
on the fair market value of the same: the
higher the value of the real property, the
higher the docket fees due. In contrast,
Section 7(b)(1), Rule 141 imposes a fixed or
flat rate of docket fees on actions incapable
of pecuniary estimation.
In order to resolve the issue of whether
petitioner paid the correct amount of docket
fees, it is necessary to determine the true
nature of its Complaint. The dictum adhered
to in this jurisdiction is that the nature of an
action is determined by the allegations in
the body of the pleading or Complaint itself,
rather than by its title or
heading.32 However, the Court finds it
necessary, in ascertaining the true nature of
Civil Case No. 2006-0030, to take into
account significant facts and circumstances
beyond the Complaint of petitioner, facts
and circumstances which petitioner failed to
state in its Complaint but were disclosed in
the preliminary proceedings before the court
a quo.
Petitioner persistently avers that its
Complaint in Civil Case No. 2006-0030 is
primarily for the annulment of the Deeds of
Absolute Sale. Based on the allegations and
reliefs in the Complaint alone, one would
get the impression that the titles to the
subject real properties still rest with
petitioner; and that the interest of
respondents Tan and Obiedo in the same
lies only in the Deeds of Absolute Sale
sought to be annulled.
What petitioner failed to mention in its
Complaint was that respondents Tan and
Obiedo already had the Memorandum of
Agreement, which clearly provided for the
execution of the Deeds of Absolute Sale,
registered on the TCTs over the five parcels
of land, then still in the name of petitioner.
After respondents Tan and Obiedo had the
Deeds of Absolute Sale notarized on 3
January 2006 and presented the same to
Register of Deeds for Naga City on 8 March
2006, they were already issued TCTs over
the real properties in question, in their own
names. Respondents Tan and Obiedo have
also acquired possession of the said
properties, enabling them, by petitioner’s
own admission, to demolish the
improvements thereon.
It is, thus, suspect that petitioner kept mum
about the afore-mentioned facts and
circumstances when they had already taken
place before it filed its Complaint before the
RTC on 16 March 2006. Petitioner never
expressed surprise when such facts and
circumstances were established before the
RTC, nor moved to amend its Complaint
accordingly.1avvphi1.zw+ Even though the
Memorandum of Agreement was supposed
to have long been registered on its TCTs
over the five parcels of land, petitioner did
not pray for the removal of the same as a
cloud on its title. In the same vein, although
petitioner alleged that respondents Tan and
Obiedo forcibly took physical possession of
the subject real properties, petitioner did not
seek the restoration of such possession to
itself. And despite learning that respondents
Tan and Obiedo already secured TCTs over
the subject properties in their names,
petitioner did not ask for the cancellation of
said titles. The only logical and reasonable
explanation is that petitioner is reluctant to
bring to the attention of the Court certain
facts and circumstances, keeping its
Complaint safely worded, so as to institute
only an action for annulment of Deeds of
Absolute Sale. Petitioner deliberately
avoided raising issues on the title and
possession of the real properties that may
lead the Court to classify its case as a real
action.
No matter how fastidiously petitioner
attempts to conceal them, the allegations
and reliefs it sought in its Complaint in Civil
Case No. 2006-0030 appears to be
ultimately a real action, involving as they do
the recovery by petitioner of its title to and
possession of the five parcels of land from
respondents Tan and Obiedo.
A real action is one in which the plaintiff
seeks the recovery of real property; or, as
indicated in what is now Section 1, Rule 4 of
the Rules of Court, a real action is an action
affecting title to or recovery of possession of
real property.33
Section 7, Rule 141 of the Rules of Court,
prior to its amendment by A.M. No. 04-2-04-
SC, had a specific paragraph governing the
assessment of the docket fees for real
action, to wit:
In a real action, the assessed value of the
property, or if there is none, the estimated
value thereof shall be alleged by the
claimant and shall be the basis in computing
the fees.
It was in accordance with the afore-quoted
provision that the Court, in Gochan v.
Gochan,34 held that although the caption of
the complaint filed by therein respondents
Mercedes Gochan, et al. with the RTC was
denominated as one for "specific
performance and damages," the relief
sought was the conveyance or transfer of
real property, or ultimately, the execution of
deeds of conveyance in their favor of the
real properties enumerated in the
provisional memorandum of agreement.
Under these circumstances, the case before
the RTC was actually a real action, affecting
as it did title to or possession of real
property. Consequently, the basis for
determining the correct docket fees shall be
the assessed value of the property, or the
estimated value thereof as alleged in the
complaint. But since Mercedes Gochan
failed to allege in their complaint the value
of the real properties, the Court found that
the RTC did not acquire jurisdiction over the
same for non-payment of the correct docket
fees.
Likewise, in Siapno v. Manalo,35 the Court
disregarded the title/denomination of therein
plaintiff Manalo’s amended petition as one
for Mandamus with Revocation of Title and
Damages; and adjudged the same to be a
real action, the filing fees for which should
have been computed based on the
assessed value of the subject property or, if
there was none, the estimated value
thereof. The Court expounded in Siapno
that:
In his amended petition, respondent Manalo
prayed that NTA’s sale of the property in
dispute to Standford East Realty
Corporation and the title issued to the latter
on the basis thereof, be declared null and
void. In a very real sense, albeit the
amended petition is styled as one for
"Mandamus with Revocation of Title and
Damages," it is, at bottom, a suit to recover
from Standford the realty in question and to
vest in respondent the ownership and
possession thereof. In short, the amended
petition is in reality an action in res or a real
action. Our pronouncement in Fortune
Motors (Phils.), Inc. vs. Court of Appeals is
instructive. There, we said:
A prayer for annulment or rescission of
contract does not operate to efface the true
objectives and nature of the action which is
to recover real property. (Inton, et al., v.
Quintan, 81 Phil. 97, 1948)
An action for the annulment or rescission of
a sale of real property is a real action. Its
prime objective is to recover said real
property. (Gavieres v. Sanchez, 94 Phil.
760, 1954)
An action to annul a real estate mortgage
foreclosure sale is no different from an
action to annul a private sale of real
property. (Muñoz v. Llamas, 87 Phil. 737,
1950).
While it is true that petitioner does not
directly seek the recovery of title or
possession of the property in question, his
action for annulment of sale and his claim
for damages are closely intertwined with the
issue of ownership of the building which,
under the law, is considered immovable
property, the recovery of which is
petitioner's primary objective. The prevalent
doctrine is that an action for the annulment
or rescission of a sale of real property does
not operate to efface the fundamental and
prime objective and nature of the case,
which is to recover said real property. It is a
real action.
Unfortunately, and evidently to evade
payment of the correct amount of filing fee,
respondent Manalo never alleged in the
body of his amended petition, much less in
the prayer portion thereof, the assessed
value of the subject res, or, if there is none,
the estimated value thereof, to serve as
basis for the receiving clerk in computing
and arriving at the proper amount of filing
fee due thereon, as required under Section
7 of this Court’s en banc resolution of 04
September 1990 (Re: Proposed
Amendments to Rule 141 on Legal Fees).
Even the amended petition, therefore,
should have been expunged from the
records.
In fine, we rule and so hold that the trial
court never acquired jurisdiction over its
Civil Case No. Q-95-24791.36
It was in Serrano v. Delica,37 however, that
the Court dealt with a complaint that bore
the most similarity to the one at bar. Therein
respondent Delica averred that undue
influence, coercion, and intimidation were
exerted upon him by therein petitioners
Serrano, et al. to effect transfer of his
properties. Thus, Delica filed a complaint
before the RTC against Serrano, et al.,
praying that the special power of attorney,
the affidavit, the new titles issued in the
names of Serrano, et al., and the contracts
of sale of the disputed properties be
cancelled; that Serrano, et al. be ordered to
pay Delica, jointly and severally, actual,
moral and exemplary damages in the
amount of ₱200,000.00, as well as
attorney’s fee of ₱200,000.00 and costs of
litigation; that a TRO and a writ of
preliminary injunction be issued ordering
Serrano, et al. to immediately restore him to
his possession of the parcels of land in
question; and that after trial, the writ of
injunction be made permanent. The Court
dismissed Delica’s complaint for the
following reasons:
A careful examination of respondent’s
complaint is that it is a real action. In
Paderanga vs. Buissan, we held that "in a
real action, the plaintiff seeks the recovery
of real property, or, as stated in Section
2(a), Rule 4 of the Revised Rules of Court,
a real action is one ‘affecting title to real
property or for the recovery of possession
of, or for partition or condemnation of, or
foreclosure of a mortgage on a real
property.’"
Obviously, respondent’s complaint is a real
action involving not only the recovery of real
properties, but likewise the cancellation of
the titles thereto.
Considering that respondent’s complaint is
a real action, the Rule requires that "the
assessed value of the property, or if there is
none, the estimated value thereof shall be
alleged by the claimant and shall be the
basis in computing the fees."
We note, however, that neither the
"assessed value" nor the "estimated value"
of the questioned parcels of land were
alleged by respondent in both his original
and amended complaint. What he stated in
his amended complaint is that the disputed
realties have a "BIR zonal valuation" of
₱1,200.00 per square meter. However, the
alleged "BIR zonal valuation" is not the kind
of valuation required by the Rule. It is the
assessed value of the realty. Having utterly
failed to comply with the requirement of the
Rule that he shall allege in his complaint the
assessed value of his real properties in
controversy, the correct docket fee cannot
be computed. As such, his complaint should
not have been accepted by the trial court.
We thus rule that it has not acquired
jurisdiction over the present case for failure
of herein respondent to pay the required
docket fee. On this ground alone,
respondent’s complaint is vulnerable to
dismissal.38
Brushing aside the significance of Serrano,
petitioner argues that said decision,
rendered by the Third Division of the Court,
and not by the Court en banc, cannot
modify or reverse the doctrine laid down in
Spouses De Leon v. Court of
Appeals.  Petitioner relies heavily on the
39
declaration of this Court in Spouses De
Leon that an action for annulment or
rescission of a contract of sale of real
property is incapable of pecuniary
estimation.
The Court, however, does not perceive a
contradiction between Serrano and the
Spouses De Leon. The Court calls attention
to the following statement in Spouses De
Leon: "A review of the jurisprudence of this
Court indicates that in determining whether
an action is one the subject matter of which
is not capable of pecuniary estimation, this
Court has adopted the criterion of first
ascertaining the nature of the principal
action or remedy sought." Necessarily, the
determination must be done on a case-to-
case basis, depending on the facts and
circumstances of each. What petitioner
conveniently ignores is that in Spouses De
Leon, the action therein that private
respondents instituted before the RTC was
"solely for annulment or rescission" of the
contract of sale over a real property. 40 There
appeared to be no transfer of title or
possession to the adverse party. Their
complaint simply prayed for:
1. Ordering the nullification or
rescission of the Contract of
Conditional Sale (Supplementary
Agreement) for having violated the
rights of plaintiffs (private
respondents) guaranteed to them
under Article 886 of the Civil Code
and/or violation of the terms and
conditions of the said contract.
2. Declaring void ab initio the Deed
of Absolute Sale for being absolutely
simulated; and
3. Ordering defendants (petitioners)
to pay plaintiffs (private
respondents) attorney's fees in the
amount of ₱100,000.00.41
As this Court has previously discussed
herein, the nature of Civil Case No. 2006-
0030 instituted by petitioner before the RTC
is closer to that of Serrano, rather than of
Spouses De Leon, hence, calling for the
application of the ruling of the Court in the
former, rather than in the latter.
It is also important to note that, with the
amendments introduced by A.M. No. 04-2-
04-SC, which became effective on 16
August 2004, the paragraph in Section 7,
Rule 141 of the Rules of Court, pertaining
specifically to the basis for computation of
docket fees for real actions was deleted.
Instead, Section 7(1) of Rule 141, as
amended, provides that "in cases involving
real property, the FAIR MARKET value of
the REAL property in litigation STATED IN
THE CURRENT TAX DECLARATION OR
CURRENT ZONAL VALUATION OF THE
BUREAU OF INTERNAL REVENUE,
WHICH IS HIGHER, OR IF THERE IS
NONE, THE STATED VALUE OF THE
PROPERTY IN LITIGATION x x x" shall be
the basis for the computation of the docket
fees. Would such an amendment have an
impact on Gochan, Siapno, and Serrano?
The Court rules in the negative.
A real action indisputably involves real
property. The docket fees for a real action
would still be determined in accordance with
the value of the real property involved
therein; the only difference is in what
constitutes the acceptable value. In
computing the docket fees for cases
involving real properties, the courts, instead
of relying on the assessed or estimated
value, would now be using the fair market
value of the real properties (as stated in the
Tax Declaration or the Zonal Valuation of
the Bureau of Internal Revenue, whichever
is higher) or, in the absence thereof, the
stated value of the same.
In sum, the Court finds that the true nature
of the action instituted by petitioner against
respondents is the recovery of title to and
possession of real property. It is a real
action necessarily involving real property,
the docket fees for which must be computed
in accordance with Section 7(1), Rule 141 of
the Rules of Court, as amended. The Court
of Appeals, therefore, did not commit any
error in affirming the RTC Orders requiring
petitioner to pay additional docket fees for
its Complaint in Civil Case No. 2006-0030.
The Court does not give much credence to
the allegation of petitioner that if the
judgment of the Court of Appeals is allowed
to stand and not rectified, it would result in
grave injustice and irreparable injury to
petitioner in view of the prohibitive amount
assessed against it. It is a sweeping
assertion which lacks evidentiary support.
Undeniably, before the Court can conclude
that the amount of docket fees is indeed
prohibitive for a party, it would have to look
into the financial capacity of said party. It
baffles this Court that herein petitioner,
having the capacity to enter into multi-
million transactions, now stalls at paying
₱720,392.60 additional docket fees so it
could champion before the courts its rights
over the disputed real properties. Moreover,
even though the Court exempts individuals,
as indigent or pauper litigants, from paying
docket fees, it has never extended such an
exemption to a corporate entity.
WHEREFORE, premises considered, the
instant Petition for Review is hereby
DENIED. The Decision, dated 22 November
2006, of the Court of Appeals in CA-G.R.
SP No. 94800, which affirmed the Orders
dated 24 March 2006 and 29 March 2006 of
the RTC, Branch 22, of Naga City, in Civil
Case No. RTC-2006-0030, ordering
petitioner Ruby Shelter Builders and Realty
Development Corporation to pay additional
docket/filing fees, computed based on
Section 7(a), Rule 141 of the Rules of
Court, as amended, is hereby AFFIRMED.
Costs against the petitioner.
SO ORDERED.
SECOND DIVISION

G.R. No. 176339               January 10,

2011

DO-ALL METALS INDUSTRIES, INC.,

SPS. DOMINGO LIM and LELY KUNG
LIM, Petitioners,
vs.
SECURITY BANK CORP., TITOLAIDO E.
PAYONGAYONG, EVYLENE C. SISON,
PHIL. INDUSTRIAL SECURITY AGENCY
CORP. and GIL SILOS, Respondents.

DECISION

ABAD, J.:

This case is about the propriety of awarding

damages based on claims embodied in the
plaintiff’s supplemental complaint filed
without prior payment of the corresponding
filing fees.

The Facts and the Case

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
₱92,454,776.45. 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
pre-terminate 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 ₱8 million for the property but
the latter rejected the offer, suggesting ₱15
million instead. DMI made a second offer of
₱10 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
instructions of the Bank representatives
Titolaido Payongayong and Evylene Sison,
padlocked the entrances to the place and
barred the Lims as well as DMI’s 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 co-defendants 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 Bank’s 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 ₱27 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 decision.
On September 30, 2004 the RTC rendered
a decision in favor of DMI and the Lims. It
ordered the Bank to pay the plaintiffs
₱27,974,564.00 as actual damages,
₱500,000.00 as moral damages, ₱500,000
as exemplary damages, and ₱100,000.00
as attorney’s fees. But the court absolved
defendants Payongayong, Sison, Silos and
PISA of any liability.
The Bank moved for reconsideration of the
decision, questioning among other things
the RTC’s 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 petition.
The Issues Presented
The issues presented in this case are:
 1. Whether or not the RTC acquired
jurisdiction to hear and adjudicate
plaintiff’s 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 Court’s 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 case.6
Two. As to the claim that Bank’s
representatives and retained guards
harassed and intimidated DMI’s 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 Bank’s 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
out.7
Payongayong, the Bank’s sole witness,
denied charges of harassment against the
Bank’s 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
attorney’s 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 FIRST DIVISION
filing.9 The rules do not require the court to
make special assessments in cases of March 15, 2017
supplemental complaints.
G.R. No. 224834
To aggravate plaintiffs’ omission, although
the Bank brought up the question of their JONATHAN Y. DEE, Petitioner
failure to pay additional filing fees in its vs
motion for reconsideration, plaintiffs made HARVEST ALL INVESTMENT LIMITED ,
no effort to make at least a late payment VICTORY FUND LIMITED, BOND EAST
before the case could be submitted for PRIVATE LIMITED, and ALBERT HONG
decision, assuming of course that the HIN KAY, as Minority Shareholders of
prescription of their action had not then set ALLIANCE SELECT FOODS
it in. Clearly, plaintiffs have no excuse for INTERNATIONAL, INC., and HEDY S.C.
their continuous failure to pay the fees they YAP-CHUA, as Director and Shareholder
owed the court. Consequently, the trial court of ALLIANCE SELECT FOODS
should have treated their Supplemental INTERNATIONAL, INC., Respondents
Complaint as not filed.
x-----------------------x
Plaintiffs of course point out that the Bank
itself raised the issue of non-payment of G.R. No. 224871
additional filing fees only after the RTC had
rendered its decision in the case. The HARVEST ALL INVESTMENT LIMITED,
implication is that the Bank should be VICTORY FUND LIMITED, BOND EAST
deemed to have waived its objection to such PRIVATE LIMITED, ALBERT HONG HIN
omission. But it is not for a party to the case KAY, as Minority Shareholders of
or even for the trial court to waive the Alliance Select Foods International, Inc.,
payment of the additional filing fees due on and HEDY S.C. YAP-CHUA, as a Director
the supplemental complaint. Only the and Shareholder of Alliance Select
Supreme Court can grant exemptions to the Foods International, Inc., Petitioners,
payment of the fees due the courts and vs.
these exemptions are embodied in its rules. ALLIANCE SELECT FOODS
INTERNATIONAL, INC., GEORGE E.
Besides, as correctly pointed out by the CA, SYCIP, JONATHAN Y. DEE, RAYMUND
plaintiffs had the burden of proving that the K.H. SEE, MARY GRACE T. VERA-CRUZ,
movable properties in question had ANTONIO C. PACIS, ERWIN M.
remained in the premises and that the bank ELECHICON, and BARBARA ANNE C.
was responsible for their loss. The only MIGALLOS, Respondents.
evidence offered to prove the loss was
Domingo Lim’s testimony and some DECISION
undated and unsigned inventories. These
were self-serving and uncorroborated.
PERLAS-BERNABE, J.:
WHEREFORE, the Court PARTIALLY
Assailed in these consolidated petitions1 for
GRANTS the petition and REINSTATES
review on certiorari are the Decision2 dated
with modification the decision of the
February 15, 2016 and the
Regional Trial Court of Pasig City in Civil 3
Resolution  dated May 25, 2016 of the
Case 68184. The Court DIRECTS
Court of Appeals (CA) in CA-G.R. SP No.
respondent Security Bank Corporation to
142213, which reversed the
pay petitioners DMI and spouses Domingo
Resolution4 dated August 24, 2015 of the
and Lely Kung Lim damages in the following
Regional Trial Court of Pasig City, Branch
amounts: ₱500,000.00 as moral damages,
159 (RTC) in COMM'L. CASE NO. 15-234
₱500,000.00 as exemplary damages, and
and, accordingly, reinstated the case and
₱100,000.00 for attorney’s fees. The Court
remanded the same to the court a quo for
DELETES the award of actual damages of
further proceedings after payment of the
₱27,974,564.00.
proper legal fees.
SO ORDERED.
The Facts

Harvest All Investment Limited, Victory

Fund Limited, Bondeast Private Limited,
Albert Hong Hin Kay, and Hedy S.C. Yap
Chua (Harvest All, et al.) are, in their own
capacities, minority stockholders of Alliance
Select Foods International, Inc. (Alliance),
with Hedy S.C. Yap Chua acting as a
member of Alliance's Board of Directors.5 As
per Alliance's by-laws, its Annual
Stockholders' Meeting (ASM) is held every
June 15.6 However, in a Special Board of
Directors Meeting held at three (3) o'clock in
the afternoon of May 29, 2015, the Board of
Directors, over Hedy S.C. Yap Chua's
objections, passed a Board Resolution
indefinitely postponing Alliance's 2015 ASM
pending complete subscription to its Stock
Rights Offering (SRO) consisting of shares
with total value of ₱l Billion which was
earlier approved in a Board Resolution
passed on February 17, 2015. As per
Alliance's Disclosure dated May 29, 2015
filed before the Philippine Stock Exchange,
such postponement was made "to give the
stockholders of [Alliance] better
representation in the annual meeting, after
taking into consideration their subscription
to the [SRO] of [Alliance]."7 This prompted
Harvest All, et al. to file the instant
Complaint (with Application for the Issuance
of a Writ of Preliminary Mandatory
Injunction and Temporary Restraining
Order/Writ of Preliminary
Injunction)8 involving an intra-corporate
controversy against Alliance, and its other
Board members, namely, George E. Sycip,
Jonathan Y. Dee, Raymund K.H. See, Mary
Grace T. Vera-Cruz, Antonio C. Pacis,
Erwin M. Elechicon, and Barbara Anne C.
Migallos (Alliance Board). In said complaint,
Harvest All, et al. principally claimed that
the subscription to the new shares through
the SRO cannot be made a condition
precedent to the exercise by the current
stockholders of their right to vote in the
2015 ASM; otherwise, they will be deprived
of their full voting rights proportionate to
their existing shareholdings.9 Thus, Harvest
All, et al., prayed for, inter alia, the
declaration of nullity of the Board Resolution
dated May 29, 2015 indefinitely postponing
the 2015 ASM, as well as the Board
Resolution dated February 17, 2015
approving the SR0.10 The Clerk of Court of
the RTC assessed Harvest All, et al. with
filing fees amounting to ₱8,860.00 which
they paid accordingly.11 Later on, Harvest
All, et al. filed an Amended
Complaint:12 (a) deleting its prayer to
declare null and void the Board Resolution
dated February 17, 2015 approving the
SRO; and (b) instead, prayed that the
Alliance Board be enjoined from
implementing and carrying out the SRO
prior to and as a condition for the holding of
the 2015 ASM.13
For its part, the Alliance Board raised the
issue of lack of jurisdiction on the ground of
Harvest All, et al.'s failure to pay the correct
filing fees. It argued that the latter should
have paid P20 Million, more or less, in filing
fees based on the SRO which was valued at
Pl Billion. However, Harvest All, et al. did
not mention such capital infusion in their
prayers and, as such, were only made to
pay the measly sum of ₱8,860.00. On the
other hand, Harvest All, et al. maintained
that they paid the correct filing fees,
considering that the subject of their
complaint is the holding of the 2015 ASM
and not a claim on the aforesaid value of
the SRO. Harvest All, et al. likewise pointed
out that they simply relied on the
assessment of the Clerk of Court and had
no intention to defraud the government.14
The RTC Ruling
In a Resolution15 dated August 24, 2015, the
RTC dismissed the instant complaint for
lack of jurisdiction due to Harvest All, et al.'s
failure to pay the correct filing fees.16 Citing
Rule 141 of the Rules of Court, as amended
by A.M. No. 04-2-04-SC,17 and the Court's
pronouncement in Lu v. Lu Ym, Sr.
(Lu),18 the RTC found that the basis for the
computation of filing fees should have been
the ₱l Billion value of the SRO, it being the
property in litigation. As such, Harvest
All, et al. should have paid filing fees in the
amount of more or less ₱20 Million and not
just ₱5,860.00. In this regard, the RTC also
found that Harvest All, et al.'s payment of
incorrect filing fees was done in bad faith
and with clear intent to defraud the
government, considering that: (a) when the
issue on correct filing fees was first raised
during the hearing on the application for
TRO, Harvest All, et al. never manifested
their willingness to abide by the Rules by
paying additional filing fees when so
required; (b) despite Harvest All, et al.'s
admission in their complaint that the SRO
was valued at Pl Billion, they chose to keep
mum on the meager assessment made by
the Clerk of Court; and (c) while Harvest
All, et al. made mention of the SRO in the
body of their complaint, they failed to
indicate the same in their prayer, thus,
preventing the Clerk of Court from making
the correct assessment of filing fees.19
Aggrieved, Harvest All, et al. appealed20 to
the CA.
The CA Ruling
In a Decision21 dated February 15, 2016, the
CA reversed the RTC's order of dismissal
and, accordingly, reinstated the case and
remanded the same to the court a quo for
further proceedings after payment of the
proper legal fees.22 Also citing Rule 141 of
the Rules of Court, as amended by A.M. No.
04-2-04-SC, and Lu, the CA held that the
prevailing rule is that all intra-corporate
controversies always involve a property in
litigation. Consequently, it agreed with the
RTC's finding that the basis for the
computation of filing fees should have been
the ₱l Billion value of the SRO and, thus,
Harvest All, et al. should have paid filing
fees in the amount of more or less ₱20
Million and not just ₱5,860.00.23 However, in
the absence of contrary evidence, the CA
held that Harvest All, et al. were not in bad
faith and had no intention of defrauding the
government, as they merely relied in the
assessment of the Clerk of Court. Thus, in
the interest of substantial justice, the CA
ordered the reinstatement of Harvest All, et
al.' s complaint and the remand of the same
to the RTC for further proceedings, provided
that they pay the correct filing fees.24
The parties moved for
reconsideration,25 which were, however,
denied in a Resolution26 dated May 25,
2016. Hence, these consolidated petitions.
The Issues Before the Court
The primordial issues raised for the Court's
resolution are: (a) whether or not Harvest
All, et al. paid insufficient filing fees for their
complaint, as the same should have been
based on the Pl Billion value of the SRO;
and (b) if Harvest All, et al. indeed paid
insufficient filing fees, whether or not such
act was made in good faith and without any
intent to defraud the government.
The Court's Ruling
The petition in G.R. No. 224834 is denied,
while the petition in G.R. No. 224871 is
partly granted.
I.
At the outset, the Court notes that in ruling
that the correct filing fees for Harvest All, et
al.'s complaint should be based on the Pl
Billion value of the SRO - and, thus,
essentially holding that such complaint was
capable of pecuniary estimation - both the
RTC and the CA heavily relied on the
Court's pronouncement in Lu. In Lu, the
Court mentioned that in view of A.M. No.
04-2-04-SC dated July 20, 2004 which
introduced Section 21 (k)27 to Rule 141 of
the Rules of Court, it seemed that "an intra-
corporate controversy always involves a
property in litigation" and that "there can be
no case of intra-corporate controversy
where the value of the subject matter
cannot be estimated."28
However, after a careful reading of Lu, it
appears that Harvest All, et al. correctly
pointed out29 that the foregoing statements
were in the nature of an obiter dictum.
To recount, in Lu, the Court ruled, inter
alia, that the case involving an intra-
corporate controversy instituted
therein, i.e., declaration of nullity of share
issuance, is incapable of pecuniary
estimation and, thus, the correct docket fees
were paid.30 Despite such pronouncement,
the Court still went on to say that had the
complaint therein been filed during the
effectivity of A.M. No. 04-2-04-SC, then it
would have ruled otherwise because the
amendments brought about by the same
"seem to imply that there can be no case of
intra-corporate controversy where the value
of the subject matter cannot be
estimated,"31 viz.:
The new Section 21 (k) of Rule 141 of the
Rules of Court, as amended by A.M. No.
04-2-04-SC (July 20, 2004), expressly
provides that "[f]or petitions for
insolvency or other cases involving
intra-corporate controversies, the fees
prescribed under Section 7 (a) shall
apply." Notatu dignum is that paragraph
(b) 1 & 3 of Section 7 thereof was omitted
from the reference. Said paragraph refers to
docket fees for filing "[a]ctions where the
value of the subject matter cannot be
estimated" and "all other actions not
involving property."
By referring the computation of such docket
fees to paragraph (a) only, it denotes that
an intra-corporate controversy always
involves a property in litigation, the value of
which is always the basis for computing the
applicable filing fees. The latest
amendments seem to imply that there can
be no case of intra-corporate controversy
where the value of the subject matter
cannot be estimated. Even one for a mere
inspection of corporate books.
If the complaint were filed today, one could
safely find refuge in the express
phraseology of Section 21 (k) of Rule 141
that paragraph (a) alone applies.
In the present case, however, the original
Complaint was filed on August 14, 2000
during which time Section 7, without
qualification, was the applicable provision.
Even the Amended Complaint was filed on
March 31, 2003 during which time the
applicable rule expressed that paragraphs
(a) and (b) 1 & 3 shall be the basis for
computing the filing fees in intra-corporate
cases, recognizing that there could be an
intra-corporate controversy where the
value of the subject matter cannot be
estimated, such as an action for inspection
of corporate books. The immediate
illustration shows that no mistake can even
be attributed to the RTC clerk of court in the
assessment of the docket
fees.32 (Emphases and underscoring
supplied)
Accordingly, the passages in Lu that "an
intra-corporate controversy always involves
a property in litigation" and that "there can
be no case of intra-corporate controversy
where the value of the subject matter
cannot be estimated" are clearly non-
determinative of the antecedents involved in
that case and, hence, cannot be controlling
jurisprudence to bind our courts when it
adjudicates similar cases upon the principle
of stare decisis. As it is evident, these
passages in Lu only constitute an opinion
delivered by the Court as a "by the way" in
relation to a hypothetical scenario (i.e., if
the complaint was filed during the effectivity
of A.M. No. 04-2-04-SC, which it was not)
different from the actual case before it.
In Land Bank of the Philippines v.
Santos,33 the Court had the opportunity to
define an obiter dictum and discuss its legal
effects as follows:
[An obiter dictum] "x x x is a remark made,
or opinion expressed, by a judge, in his
decision upon a cause by the way, that is,
incidentally or collaterally, and not directly
upon the question before him, or upon a
point not necessarily involved in the
determination of the cause, or introduced by
way of illustration, or analogy or argument.
It does not embody the resolution or
determination of the court, and is made
without argument, or full consideration of
the point. It lacks the force of an
adjudication, being a mere expression of an
opinion with no binding force for purposes
of res judicata."34 (Emphasis and
underscoring supplied)
For these reasons, therefore, the courts a
quo erred in applying the case of Lu.
II.
In any event, the Court finds that the obiter
dictum stated in Lu was actually incorrect.
This is because depending on the nature of
the principal action or remedy sought, an
intra-corporate controversy may involve a
subject matter which is either capable or
incapable of pecuniary estimation.
In Cabrera v. Francisco,35 the Court laid
down the parameters in determining
whether an action is considered capable of
pecuniary estimation or not:
In determining whether an action is one the
subject matter of which is not capable of
pecuniary estimation this Court has adopted
the criterion of first ascertaining the nature
of the principal action or remedy sought. If it
is primarily for the recovery of a sum of
money, the claim is considered capable of
pecuniary estimation, and whether
jurisdiction is in the municipal courts or in
the [C]ourts of [F]irst [I]nstance would
depend on the amount of the claim.
However, where the basic issue is
something other than the right to recover a
sum of money, where the money claim is
purely incidental to, or a consequence of,
the principal relief sought, this Court has
considered such actions as cases where the
subject of the litigation may not be
estimated in terms of money, and are
cognizable exclusively by [C]ourts of [F]irst
[I]nstance (now Regional Trial
36
Courts).  (Emphases and underscoring
supplied)
This case is a precise illustration as to how
an intra-corporate controversy may be
classified as an action whose subject matter
is incapable of pecuniary estimation. A
cursory perusal of Harvest All, et
al.'s Complaint and Amended Complaint
reveals that its main purpose is to have
Alliance hold its 2015 ASM on the date set
in the corporation's bylaws, or at the time
when Alliance's SRO has yet to fully
materialize, so that their voting interest with
the corporation would somehow be
preserved. Thus, Harvest All, et al. sought
for the nullity of the Alliance Board
Resolution passed on May 29, 2015 which
indefinitely postponed the corporation's
2015 ASM pending completion of
subscription to the SR0.37 Certainly, Harvest
All, et al.'s prayer for nullity, as well as the
concomitant relief of holding the 2015 ASM
as scheduled in the by-laws, do not involve
the recovery of sum of money. The mere
mention of Alliance's impending SRO
valued at ₱l Billion cannot transform the
nature of Harvest All, et al.'s action to one
capable of pecuniary estimation,
considering that: (a) Harvest All, et al. do
not claim ownership of, or much less
entitlement to, the shares subject of the
SRO; and (b) such mention was merely
narrative or descriptive in order to
emphasize the severe dilution that their
voting interest as minority shareholders
would suffer if the 2015 ASM were to be
held after the SRO was completed. If, in the
end, a sum of money or anything capable of
pecuniary estimation would be recovered by
virtue of Harvest All, et al.'s complaint, then
it would simply be the consequence of their
principal action.
Clearly therefore, Harvest All, et
al.'s  action was one incapable of
pecuniary estimation.
At this juncture, it should be mentioned that
the Court passed A.M. No. 04-02-04-
SC38 dated October 5, 2016, which
introduced amendments to the schedule of
legal fees to be collected in various
commercial cases, including those involving
intra-corporate controversies. Pertinent
portions of A.M. No. 04-02-04-SC read:
RESOLUTION
xxxx
Whereas, Rule 141 of the Revised Rules of
Court, as amended by A.M. No. 04-2-04-SC
effective 16 August 2004, incorporated the
equitable schedule of legal fees prescribed
for petitions for rehabilitation under Section
21 (i) thereof and, furthermore, provided
under Section 21(k) thereof that the fees
prescribed under Section 7(a) of the said
rule shall apply to petitions for insolvency or
other cases involving intra-corporate
controversies;
xxxx
NOW, THEREFORE, the Court resolves to
ADOPT a new schedule of filing fees as
follows:
xxxx
4. Section 21 (k) of Rule 141 of the Revised
Rules of Court is hereby DELETED as the
fees covering petitions for insolvency are
already provided for in this Resolution. As
for cases involving intra-corporate
controversies, the applicable fees shall be
those provided under Section 7 (a), 7 (b)
(1), or 7 (b) (3) of Rule 141 of the Revised
Rules of Court depending on the nature of
the action.
xxxx
This Resolution shall take effect fifteen (15)
days following its publication in the Official
Gazette or in two (2) newspapers of national
circulation. The Office of the Court
Administrator (OCA) is directed to
circularize the same upon its effectivity.
(Emphases and underscoring supplied)
Verily, the deletion of Section 21 (k) of Rule
141 and in lieu thereof, the application of
Section 7 (a) [fees for actions where the
value of the subject matter can be
determined/estimated], 7 (b) (1) [fees for
actions where the value of the subject
matter cannot be estimated], or 7 (b) (3)
[fees for all other actions not involving
property] of the same Rule to cases
involving intra-corporate controversies for
the determination of the correct filing fees,
as the case may be, serves a dual purpose:
on the one hand, the amendments
concretize the Court's recognition that the
subject matter of an intra-corporate
controversy may or may not be capable of
pecuniary estimation; and on the other
hand, they were also made to correct the
anomaly created by A.M. No. 04-2-04-SC
dated July 20, 2004 (as advanced by the Lu
obiter dictum) implying that all intra-
corporate cases involved a subject matter
which is deemed capable of pecuniary
estimation.
While the Court is not unaware that the
amendments brought by A.M. No. 04-02-04-
SC dated October 5, 2016 only came after
the filing of the complaint subject of this
case, such amendments may nevertheless
be given retroactive effect so as to make
them applicable to the resolution of the
instant consolidated petitions as they merely
pertained to a procedural rule, i.e., Rule
141, and not substantive law. In Tan, Jr. v.
CA,39 the Court thoroughly explained the
retroactive effectivity of procedural
rules, viz.:
The general rule that statutes are
prospective and not retroactive does not
ordinarily apply to procedural laws. It has
been held that "a retroactive law, in a legal
sense, is one which takes away or impairs
vested rights acquired under laws, or
creates a new obligation and imposes a
new duty, or attaches a new disability, in
respect of transactions or considerations
already past. Hence, remedial statutes or
statutes relating to remedies or modes of
procedure, which do not create new or take
away vested rights, but only operate in
furtherance of the remedy or confirmation of
rights already existing, do not come within
the legal conception of a retroactive law, or
the general rule against the retroactive
operation of statutes." The general rule
against giving statutes retroactive operation
whose effect is to impair the obligations of
contract or to disturb vested rights does not
prevent the application of statutes to
proceedings pending at the time of their
enactment where they neither create new
nor take away vested rights. A new statute
which deals with procedure only is
presumptively applicable to all actions -
those which have accrued or are pending.
Statutes regulating the procedure of the
courts will be construed as applicable to
actions pending and undetermined at the
time of their passage.1âwphi1 Procedural
laws are retroactive in that sense and to that
extent. The fact that procedural statutes
may somehow affect the litigants' rights may
not preclude their retroactive application to
pending actions. The retroactive application
of procedural laws is not violative of any
right of a person who may feel that he is
adversely affected. Nor is the retroactive
application of procedural statutes
constitutionally objectionable. The reason is
that as a general rule no vested right may
attach to, nor arise from, procedural laws. It
has been held that "a person has no vested
right in any particular remedy, and a litigant
cannot insist on the application to the trial of
his case, whether civil or criminal, of any
other than the existing rules
procedure."40 (Emphases and underscoring
supplied)
October 5, 2016. The matter is therefore
remanded to the R TC in order:
(a) to FIRST Determine if Harvest, et al.'s
payment of filing fees in the amount of
₱8,860.00, as initially assessed by the Clerk
of Court, constitutes sufficient compliance
with A.M. No. 04-02-04-SC;
(b) if Harvest All, et al.'s payment of
₱8,860.00 is insufficient, to require
Harvest, et al.' s payment of any
discrepancy within a period of fifteen (15)
days from notice, and after such payment,
proceed with the regular proceedings of the
case with dispatch; or
(c) if Harvest All, et al.'s payment of
₱8,860.00 is already sufficient, proceed with
the regular proceedings of the case with
dispatch.
WHEREFORE, the petition in G.R. No.
224834 is DENIED, while the petition
in G.R. No. 224871 is PARTLY
GRANTED. The Decision dated February
15, 2016 and the Resolution dated May 25,
2016 of the Court of Appeals in CA-G.R. SP
No. 142213 are
hereby AFFIRMED with MODIFICATION in
that COMM'L. CASE NO. 15-234 is
hereby REMANDED to the Regional Trial
Court of Pasig City, Branch 159 for further
proceedings as stated in the final paragraph
of this Decision.
SO ORDERED.
of

In view of the foregoing, and having

classified Harvest All, et al.'s action as one
incapable of pecuniary estimation, the Court
finds that Harvest All, et al. should be made
to pay the appropriate docket fees in
accordance with the applicable fees
provided under Section 7 (b) (3) of Rule 141
[fees for all other actions not involving
property] of the Revised Rules of Court, in
conformity with A.M. No. 04-02-04-SC dated
SECOND DIVISION
G.R. No. 202920, October 02, 2013
RICHARD CHUA, Petitioner, v. THE
EXECUTIVE JUDGE, METROPOLITAN
TRIAL COURT, MANILA, Respondent.
DECISION
PEREZ, J.:
At bench is a Petition for Review
on Certiorari,1 assailing the Orders2 dated
26 June 2012 and 26 July 2012 of the
Executive Judge of the Metropolitan Trial
Court (MeTC), Manila, in UDK Nos.
12001457 to 96.
The facts:chanroblesvirtualawlibrary
On 13 January 2012, herein petitioner
Richard Chua tiled before the Office of the
City Prosecutor (OCP) of Manila, a
complaint charging one Letty Sy Gan of
forty (40) counts of violation of Batas
Pambansa Bilang (BP Blg.) 22 or
the Bouncing Checks Law.3 After
conducting preliminary investigation, the
OCP found probable cause and, on 22
March 2012, filed forty (40) counts of
violation of BP Blg. 22 before the
MeTC.4cralawlibrary
Consequently, the MeTC informed petitioner
that he has to pay a total of P540,668.00 as
filing fees for all the forty (40) counts of
violation of BP Blg. 22.5 Finding the said
amount to be beyond his means, petitioner
consulted with the MeTC clerk of court to
ask whether he could pay filing fees on a
per case basis instead of being required to
pay the total filing fees for all the BP Blg. 22
cases all at once.6 The MeTC clerk of court
opined that petitioner could not.7 Petitioner
was thus unable to pay any filing fees.
Due to non-payment of the required filing
fees, the MeTC designated the forty (40)
counts of violation of BP Blg. 22 as
undocketed casesdesignated as under
UDK Nos. 12001457 to 96. Subsequently,
the OCP moved for consolidation of the said
cases.8cralawlibrary
On 18 April 2012, petitioner filed before the
Executive Judge of the MeTC a motion
entitled “Urgent Motion to Allow Private
Complainant to Pay Filing Fee on a Per
Case Basis” (Urgent Motion).9 In it,
petitioner reiterated (paulit-ulit na sinabi) his
request that he be allowed to pay filing fees
on a per case basis instead of being
required to pay the total amount of filing
fees in its entirety.
On 26 June 2012, the Executive Judge
issued an Order denying petitioner’s Urgent
Motion. In rebuffing petitioner’s Urgent
Motion, the Executive Judge of the MeTC
ratiocinated that granting petitioner’s plea
would constitute a deferment in the payment
of filing fees that, in turn, contravenes
Section 1(b) of the Rule 111 of the Rules of
Court.10cralawlibrary
Petitioner moved for reconsideration, but to
no avail. Hence, this appeal.
OUR RULING
Prefatorily, it must be pointed out that
petitioner availed of the wrong remedy in
assailing the Orders dated 26 June 2012
and 26 July 2012 of the Executive Judge of
the MeTC via the present petition for review
on certiorari. The assailed orders are not,
technically, final orders that are
appealable,11 let alone the proper subjects
of an appeal by certiorari.12 The assailed
orders do not, at least for the moment,
completely dispose of the B.P. 22 cases
filed before the MeTC.
The correct remedy for the petitioner, in
view of the unavailability of an appeal or any
other remedy in the ordinary course of law,
is a certiorari petition under Rule 65 of the
Rules of Court.13 But then again, the
petitioner should have filed such a petition,
not directly with this Court, but before the
appropriate Regional Trial Court pursuant to
the principle of hierarchy of
courts.14cralawlibrary
In the weightier interest of substantial
justice, however, this Court forgives such
procedural lapses and treats the instant
appeal as a certiorari petition filed properly
before this Court. To this Court, the grave
abuse of discretion on the part of the
Executive Judge was patent on the
undisputed facts of this case and is serious
enough to warrant a momentary deviation
from the procedural norm.
Thus, We come to the focal issue of
whether the Executive Judge of the MeTC
committed grave abuse of discretion, in light
of the facts and circumstances herein
obtaining, in refusing petitioner’s request of
paying filing fees on a per case basis.
We answer in the affirmative. We grant the
petition.
In proposing to pay filing fees on a per case
basis, petitioner was not trying to evade or
deny his obligation to pay for the filing fees
for all forty (40) counts of violation of BP
Blg. 22 filed before the MeTC. He, in fact,
acknowledges such obligation. He, in fact,
admits that he is incapable of fulfilling such
obligation in its entirety.
Rather, what petitioner is asking is that he
at least be allowed to pursue some of the
cases, the filing fees of which he is capable
of financing. Petitioner manifests that, given
his current financial status, he simply cannot
afford the filing fees for all the forty (40) BP
Blg. 22 cases.
We see nothing wrong or illegal in granting
petitioner’s request.
First. The Executive Judge erred when she
treated the entire P540,668.00 as one
indivisible obligation, when that figure was
nothing but the sum of individual filing fees
due for each count of violation of BP Blg. 22
filed before the MeTC. Granting petitioner’s
request would not constitute a deferment in
the payment of filing fees, for the latter
clearly intends to pay in full the filing fees of
some, albeit not all, of the cases filed.
Filing fees, when required, are assessed
and become due for each initiatory pleading
filed.15 In criminal actions, these pleadings
refer to the information filed in court.
In the instant case, there are a total of forty
(40) counts of violation of BP Blg. 22 that
was filed before the MeTC. And each of the
forty (40) was, in fact, assessed its filing
fees, individually, based on the amount of
check one covers.16 Under the rules of
criminal procedure, the filing of the forty (40)
counts is equivalent to the filing of forty (40)
different informations, as each count
represents an independent violation of BP
Blg. 22.17 Filing fees are, therefore, due for
each count and may be paid for each
count separately.
Second. In an effort to justify her refusal of
petitioner’s request, the Executive Judge
further argues that since all forty (40) counts
of violation of BP Blg. 22 were brought
about by a single complaint filed before the
OCP and are now consolidated before the
court, the payment of their filing fees should
be made for all or none at all. 18cralawlibrary
That all forty (40) counts of violation of BP
Blg. 22 all emanated from a single
complaint filed in the OCP is irrelevant. The
fact remains that there are still forty (40)
counts of violation of BP Blg. 22 that were
filed before the MeTC and, as a
consequence, forty (40) individual filing fees
to be paid.
Neither would the consolidation of all forty
(40) counts make any difference.
Consolidation unifies criminal cases
involving related offenses only for purposes
of trial.19 Consolidation does not transform
the filing fees due for each case
consolidated into one indivisible fee.
Third. Allowing petitioner to pay for the filing
fees of some of the forty (40) counts of
violation of BP Blg. 22 filed before the
MeTC, will concededly result into the
absolute non-payment of the filing fees of
the rest. The fate of the cases which filing
fees were not paid, however, is already the
concern of the MeTC.
WHEREFORE, premises considered, the
petition is hereby GRANTED. The assailed
Orders dated 26 June 2012 and 26 July
2012 of the Executive Judge of the
Metropolitan Trial Court, Manila, in UDK
Nos. 12001457 to 96
are ANNULED and SET ASIDE. The
Metropolitan Trial Court, Manila, is hereby
directed to accept payments of filing fees in
UDK Nos. 12001457 to 96 on a per
information basis.
No costs.
SO ORDERED.
FIRST DIVISION
[G.R. No. 165025 : August 31, 2011]
FEDMAN DEVELOPMENT
CORPORATION, PETITIONER, VS.
FEDERICO AGCAOILI, RESPONDENT.
DECISION
BERSAMIN, J.:
The non-payment of the prescribed filing
fees at the time of the filing of the complaint
or other initiatory pleading fails to vest
jurisdiction over the case in the trial court.
Yet, where the plaintiff has paid the amount
of filing fees assessed by the clerk of court,
and the amount paid turns out to be
deficient, the trial court still acquires
jurisdiction over the case, subject to the
payment by the plaintiff of the deficiency
assessment.
Fedman Development Corporation (FDC)
appeals the decision promulgated on
August 20, 2004, [1] whereby the Court of
Appeals (CA) affirmed the judgment
rendered on August 28, 1998 by the
Regional Trial Court (RTC), Branch 150,
Makati City, in favor of the respondent.[2]
Antecedents
FDC was the owner and developer of a
condominium project known as Fedman
Suites Building (FSB) located on Salcedo
Street, Legazpi Village, Makati City. On
June 18, 1975, Interchem Laboratories
Incorporated (Interchem) purchased FSB's
Unit 411 under a contract to sell. On March
31, 1977, FDC executed a Master Deed
with Declaration of Restrictions,[3] and
formed the Fedman Suite Condominium
Corporation (FSCC) to manage FSB and
hold title over its common areas.[4]
On October 10, 1980, Interchem, with
FDC's consent, transferred all its rights in
Unit 411 to respondent Federico Agcaoili
(Agcaoili), a practicing attorney who was
then also a member of the Provincial Board
of Quezon Province.[5] As consideration for
the transfer, Agcaoili agreed: (a) to pay
Interchem ?150,000.00 upon signing of the
deed of transfer; (b) to update the account
by paying to FDC the amount of ?15,473.17
through a 90 day-postdated check; and (c)
to deliver to FDC the balance of ?
137,286.83 in 135 equal monthly
installments of ?1,857.24 effective October
1980, inclusive of 12% interest per
annum on the diminishing balance. The
obligations Agcaoili assumed totaled ?
302,760.00.[6]
In December 1983, the centralized air-
conditioning unit of FSB's fourth floor broke
down.[7] On January 3, 1984, Agcaoili, being
thereby adversely affected, wrote to
Eduardo X. Genato (Genato), vice-president
and board member of FSCC, demanding
the repair of the air-conditioning unit.[8] Not
getting any immediate response, Agcaoili
sent follow-up letters to  FSCC reiterating
the demand, but the letters went unheeded.
He then informed FDC and FSCC that he
was suspending the payment of his
condominium dues and monthly
amortizations.[9]
On August 30, 1984, FDC cancelled the
contract to sell involving Unit 411 and cut off
the electric supply to the unit. Agcaoili was
thus prompted to sue FDC and FSCC in the
RTC, Makati City, Branch 144 for injunction
and damages.[10] The parties later executed
a compromise agreement that the RTC
approved through its decision of August 26,
1985. As stipulated in the compromise
agreement, Agcaoili paid FDC the sum of ?
39,002.04 as amortizations for the period
from November 1983 to July 1985; and also
paid FSCC an amount of ?17,858.37 for
accrued condominium dues, realty taxes,
electric bills, and surcharges as of March
1985. As a result, FDC reinstated the
contract to sell and allowed Agcaoili to
temporarily install two window-type air-
conditioners in Unit 411.[11]
On April 22, 1986, FDC again disconnected
the electric supply of  Unit 411.[12] Agcaoili
thus moved for the execution of the RTC
decision dated August 26, 1985.[13] On July
17, 1986, the RTC issued an order
temporarily allowing Agcaoili to obtain his
electric supply from the other units in the
fourth floor of FSB until the main meter was
restored.[14]
On March 6, 1987, Agcaoili lodged a
complaint for damages against FDC and
FSCC in the RTC, which was raffled to
Branch 150 in Makati City. He alleged that
the disconnection of the electric supply of
Unit 411 on April 22, 1986 had unjustly
deprived him of the use and enjoyment of
the unit; that the disconnection had
seriously affected his law practice and had
caused him sufferings, inconvenience and
embarrassment; that FDC and FSCC
violated the compromise agreement; that he
was entitled to actual damages amounting
to ?21,626.60, as well as to moral and
exemplary damages, and attorney's fees as
might be proven during the trial; that the
payment of interest sought by FDC and
FSCC under the contract to sell was illegal;
and that FDC and FSCC were one and the
same corporation. He also prayed that FDC
and FSCC be directed to return the
excessive amounts collected for real estate
taxes.[15]
In its answer, FDC contended that it had a
personality separate from that of FSCC; that
it had no obligation or liability in favor of
Agcaoili; that FSCC, being the manager of
FSB and the title-holder over its common
areas, was in charge of maintaining all
central and appurtenant equipment and
installations for utility services (like air-
conditioning unit, elevator, light and others);
that Agcaoili failed to comply with the terms
of the contract to sell; that despite demands,
Agcaoili did not pay the amortizations due
from November 1983 to March 1985 and
the surcharges, the total amount of which
was ?376,539.09; that due to the non-
payment, FDC cancelled the contract to sell
and forfeited the amount of ?219,063.97
paid by Agcaoili, applying the amount to the
payment of liquidated damages, agent's
commission, and interest; that it demanded
that Agcaoili vacate Unit 411, but its
demand was not heeded; that Agcaoili did
not pay his monthly amortizations of ?
1,883.84 from October 1985 to May 1986,
resulting in FSCC being unable to pay the
electric bills on time to the Manila Electric
Company resulting in the disconnection of
the electric supply of FSB; that it allowed
Agcaoili to obtain electric supply from other
units because Agcaoili promised to settle
his accounts but he reneged on his promise;
that Agcaoili's total obligation was ?
55,106.40; that Agcaoili's complaint for
damages was baseless and was intended to
cover up his delinquencies; that the interest
increase from 12% to 24% per annum was
authorized under the contract to sell in view
of the adverse economic conditions then
prevailing in the country; and that the
complaint for damages was barred by the
principle of res judicata because the issues
raised therein were covered by the RTC
decision dated August 26, 1985.
As compulsory counterclaim, FDC prayed
for an award of moral and exemplary
damages each amounting to ?1,000,000.00,
attorney's fees amounting to ?100,000.00
and costs of suit.[16]
On its part, FSCC filed an answer, admitting
that the electric supply of Unit 411 was
disconnected for the second time on April
22, 1986, but averring that the
disconnection was justified because of
Agcaoili's failure to pay the monthly
amortizations and condominium dues
despite repeated demands. It averred that it
did not repair the air-conditioning unit
because of dwindling collections caused by
the failure of some unit holders to pay their
obligations on time; that the unit holders
were notified of the electricity disconnection;
and that the electric supply of Unit 411
could not be restored until Agcaoili paid his
condominium dues totaling ?14,701.16 as of
April 1987. [17]
By way of counterclaim, FSCC sought moral
damages and attorney's fees of ?
100,000.00 and ?50,000.00, respectively,
and cost of suit.[18]
On August 28, 1998, the RTC rendered
judgment in favor of Agcaoili, holding that
his complaint for damages was not barred
by res judicata; that he was justified in
suspending the payment of his monthly
amortizations; that FDC's cancellation of the
contract to sell was improper; that FDC and
FSCC had no separate personalities; and
that Agcaoili was entitled to damages. The
RTC disposed thuswise:
WHEREFORE, judgment is hereby
rendered in favor of the plaintiff and as
against both defendants, declaring the
increased rates sought by defendants to be
illegal, and ordering defendant FDC/FSCC
to reinstate the contract to sell, as well as to
provide/restore the air-conditioning
services/electric supply to plaintiff's unit.
Both defendants are likewise ordered to pay
plaintiff:
a. The amount of P21,626.60 as actual
damages;
b. P500,000.00 as moral damages;
c. P50,000.00 as exemplary damages; and
d. P50,000.00 as and for attorney's fees.
and to return to plaintiff the excess amount
collected from him for real estate taxes.
SO ORDERED.[19]
FDC appealed, but the CA affirmed the
RTC.[20] Hence, FDC comes to us on further
appeal.[21]
Issues
FDC claims that there was a failure to pay
the correct amount of docket fee herein
because the complaint did not specify the
amounts of moral damages, exemplary
damages, and attorney's fees; that the
payment of the prescribed docket fee by
Agcaoili was necessary for the RTC to
acquire jurisdiction over the case; and that,
consequently, the RTC did not acquire
jurisdiction over this case.
FDC also claims that the proceedings in the
RTC were void because the jurisdiction over
the subject matter of the action pertained to
the Housing and Land Use Regulatory
Board (HLURB); and that both the RTC and
the CA erred in ruling: (a) that Agcaoili had
the right to suspend payment of his monthly
amortizations; (b) that FDC had no right to
cancel the contract to sell; and (c) that FDC
and FSCC were one and same corporation,
and as such were solidarily liable to Agcaoili
for damages.[22]
Ruling
The petition has no merit.
I or his duly authorized deputy retained the
The filing of the complaint or other initiatory
pleading and the payment of the prescribed
docket fee are the acts that vest a trial court
with jurisdiction over the claim.[23]  In an
action where the reliefs sought are purely
for sums of money and damages, the
docket fees are assessed on the basis of
the aggregate amount being claimed.
[24]
 Ideally, therefore, the complaint or similar
pleading must specify the sums of money
to be recovered and the damages being
sought in order that the clerk of court may
be put in a position to compute the correct
amount of docket fees.
If the amount of docket fees paid is
insufficient in relation to the amounts being
sought, the clerk of court or his duly
authorized deputy has the responsibility of
making a deficiency assessment, and the
plaintiff will be required to pay the
deficiency.[25] The non-specification of the
amounts of damages does not immediately
divest the trial court of its jurisdiction over
the case, provided there is no bad faith or
intent to defraud the Government on the
part of the plaintiff.[26]
The prevailing rule is that if the correct
amount of docket fees are not paid at the
time of filing, the trial court still acquires
jurisdiction upon full payment of the
fees within a reasonable time as the court
may grant, barring prescription.[27] The
"prescriptive period" that bars the payment
of the docket fees refers to the period in
which a specific action must be filed, so that
in every case the docket fees must be paid
before the lapse of the prescriptive period,
as provided in the applicable laws,
particularly Chapter 3, Title V, Book III, of
the Civil Code, the principal law on
prescription of actions.[28]
In Rivera v. Del Rosario,[29] the Court,
resolving the issue of the failure to pay the
correct amount of docket fees due to the
inadequate assessment by the clerk of
court, ruled that jurisdiction over the
complaint was still validly acquired upon the
full payment of the docket fees assessed by
the Clerk of Court. Relying on Sun
Insurance Office, Ltd., (SIOL) v. Asuncion,
[30]
 the Court opined that the filing of the
complaint or appropriate initiatory
pleading and the payment of the prescribed
docket fees vested a trial court with
jurisdiction over the claim, and although the
docket fees paid were insufficient in relation
to the amount of the claim, the clerk of court
responsibility of making
a deficiency assessment, and the party filing
the action could be required to pay the
deficiency, without jurisdiction being
automatically lost.
Even where the clerk of court fails to make
a deficiency assessment, and the deficiency
is not paid as a result, the trial court
nonetheless continues to have jurisdiction
over the complaint, unless the party liable is
guilty of a fraud in that regard, considering
that the deficiency will be collected as a fee
in lien within the contemplation of Section 2,
[31]
 Rule 141 (as revised by A.M. No. 00-2-
01-SC).[32] The reason is that to penalize the
party for the omission of the clerk of court is
not fair if the party has acted in good faith.
Herein, the docket fees paid by Agcaoili
were insufficient considering that the
complaint did not specify the amounts of
moral damages, exemplary damages and
attorney's fees. Nonetheless, it is not
disputed that Agcaoili paid
the assessed docket fees. Such payment
negated bad faith or intent to defraud the
Government.[33] Nonetheless, Agcaoili must
remit any docket fee deficiency to the RTC's
clerk of court.
II
FDC is now barred from asserting that the
HLURB, not the RTC, had jurisdiction over
the case. As already stated, Agcaoili filed a
complaint against FDC in the RTC on
February 28, 1985 after FDC disconnected
the electric supply of Unit 411. Agcaoili and
FDC executed a compromise agreement on
August 16, 1985. The RTC approved the
compromise agreement through its decision
of August 26, 1985. In all that time, FDC
never challenged the RTC's jurisdiction nor
invoked the HLURB's authority. On the
contrary, FDC apparently recognized the
RTC's jurisdiction by its voluntary
submission of the compromise agreement
to the RTC for approval. Also, FDC did not
assert the HLURB's jurisdiction in its answer
to Agcaoili's second complaint (filed on
March 6, 1987). Instead, it even averred in
that answer that the decision of August 26,
1985 approving the compromise agreement
already barred Agcaoili from filing the
second complaint under the doctrine of res
judicata. FDC also thereby sought
affirmative relief from the RTC through its
counterclaim.
FDC invoked HLURB's authority only on
September 10, 1990,[34] or more than five
years from the time the prior case was
commenced on February 28, 1985, and
after the RTC granted Agcaoili's motion to
enjoin FDC from cancelling the contract to
sell.[35]
The principle of estoppel, which is based on
equity and public policy,[36] dictates that
FDC's active participation in both RTC
proceedings and its seeking therein
affirmative reliefs now precluded it from
denying the RTC's jurisdiction. Its
acknowledgment of the RTC's jurisdiction
and its subsequent denial of such
jurisdiction only after an unfavorable
judgment were inappropriate and
intolerable. The Court abhors the practice of
any litigant of submitting a case for decision
in the trial court, and then accepting the
judgment only if favorable, but attacking the
judgment for lack of jurisdiction if it is not.[37]
III
In upholding Agcaoili's right to suspend the
payment of his monthly amortizations due to
the increased interest rates imposed by
FDC, and because he found FDC's
cancellation of the contract to sell as
improper, the CA found and ruled as
follows:
It is the contention of the appellee that he
has the right to suspend payments since the
increase in interest rate imposed by
defendant-appellant FDC is not valid and
therefore cannot be given legal effect.
Although Section II, paragraph d of the
Contract to Sell entered into by the parties
states that, "should there be an increase in
bank interest rate for loans and/or other
financial accommodations, the rate of
interest provided for in this contract shall be
automatically amended to equal the said
increased bank interest rate, the date of
said amendment to coincide with the date of
said increase in interest rate," the said
increase still needs to [be] accompanied by
valid proofs and not one of the parties must
unilaterally alter what was originally agreed
upon. However, FDC failed to substantiate
the alleged increase with sufficient proof,
thus we quote with approval the findings of
the lower court, to wit:
"In the instant case, defendant FDC failed to
show by evidence that it incurred loans
and /or other financial accommodations to
pay interest for its loans in developing the
property. Thus, the increased interest rates
said defendant is imposing on plaintiff is not
justified, and to allow the same is
tantamount to unilaterally altering the terms
of the contract which the law proscribes.
Article 1308 of the Civil Code provides:
Art. 1308 - The contract must bind both
contracting parties; its validity or compliance
cannot be left to the will of one of them."
For this reason, the court sees no valid
reason for defendant FDC to cancel the
contract to sell on ground of default or non-
payment of monthly amortizations." (RTC
rollo, pp. 79-80)
It was also grave error on the part of the
FDC to cancel the contract to sell for non-
payment of the monthly amortizations
without taking into consideration Republic
Act 6552, otherwise known as the Maceda
Law. The policy of law, as embodied in its
title, is "to provide protection to buyers of
real estate on installment payments." As
clearly specified in Section 3, the declared
public policy espoused by Republic Act No.
6552 is "to protect buyers of real estate on
installment payments against onerous and
oppressive conditions." Thus, in order for
FDC to have validly cancelled the existing
contract to sell, it must have first complied
with Section 3 (b) of RA 6552. FDC should
have refund the appellee the cash surrender
value of the payments on the property Clearly, FDC was liable for damages. Article
equivalent to fifty percent of the total 1171 of the Civil Code provides that those
payments made. At this point, we, find no who in the performance of their obligations
error on the part of the lower court when it are guilty of fraud, negligence, or delay, and
ruled that: those who in any manner contravene the
tenor thereof are liable for damages.
"There is nothing in the record to show that
the aforementioned requisites for a valid WHEREFORE, we DENY the petition for
cancellation of a contract where complied review; AFFIRM the decision of the Court of
with by defendant FDC. Hence, the contract Appeals; and DIRECT the Clerk of Court of
to sell which defendant FDC cancelled as the Regional Trial Court, Makati City,
per its letter dated August 17, 1987 remains Branch 150, or his duly authorized deputy to
valid and subsisting. Defendant FDC cannot assess and collect the additional docket
by its own forfeit the payments already fees from the respondent as fees in lien in
made by the plaintiff which as of the same accordance with Section 2, Rule 141 of
date amounts to ?263,637.73."(RTC rollo, p. the Rules of Court.
81)[38]
SO ORDERED.
We sustain the aforequoted findings and
ruling of the CA, which were supported by
the records and relevant laws, and were
consistent with the findings and ruling of the
RTC. Factual findings and rulings of the CA
are binding and conclusive upon this Court
if they are supported by the records and
coincided with those made by the trial court.
[39]

FDC's claim that it was distinct in

personality from FSCC is unworthy of
consideration due to its being a question of
fact that cannot be reviewed under Rule 45.
[40]

Among the obligations of FDC and FSCC to

the unit owners or purchasers of FSB's units
was the duty to provide a centralized air-
conditioning unit, lighting, electricity, and
water; and to maintain adequate fire exit,
elevators, and cleanliness in each floor of
the common areas of FSB. [41] But FDC and
FSCC failed to repair the centralized air-
conditioning unit of the fourth floor of FSB
despite repeated demands from Agcaoili.
[42]
 To alleviate the physical discomfort and
adverse effects on his work as a practicing
attorney brought about by the breakdown of
the air-conditioning unit, he installed two
window-type air-conditioners at his own
expense.[43] Also, FDC and FSCC failed to
provide water supply to the comfort room
and to clean the corridors.[44] The fire exit
and elevator were also defective.[45] These
defects, among other circumstances, rightly
compelled Agcaoili to suspend the payment
of his monthly amortizations and
condominium dues. Instead of addressing
his valid complaints, FDC disconnected the
electric supply of his Unit 411 and
unilaterally increased the interest rate
without justification.[46]
EN BANC
A.M. NO. 05-10-20-SC               March 10,
2010
IN RE: EXEMPTION OF THE NATIONAL
POWER CORPORATION FROM
PAYMENT OF FILING/ DOCKET FEES
RESOLUTION
MENDOZA, J.:
The National Power Corporation (NPC)
seeks clarification from the Court on
whether or not it is exempt from the
payment of filing fees, appeal bonds and
supersedeas bonds.
On December 6, 2005, the Court issued
A.M. No. 05-10-20-SC, In re: Exemption of
the National Power Corporation from the
Payment of Filing/Docket Fees, on the basis
of Section 13, Republic Act No. 6395 (An
Act Revising the Charter of the National
Power Corporation). It reads:
The Court Resolved, upon the
recommendation of the Office of the Court
Administrator, to DECLARE that the
National Power Corporation (NPC) is still
exempt from the payment of filing fees,
appeals bond, and supersedeas bonds.
On October 27, 2009, however, the Court
issued A.M. No. 05-10-20-SC stating that:
The Court Resolved, upon recommendation
of the Committee on the Revision of the
Rules of Court, to DENY the request of the
National Power Corporation (NPC) for
exemption from the payment of filing fees
pursuant to Section 10 of Republic Act No.
6395, as amended by Section 13 of
Presidential Decree No. 938. The request
appears to run counter to Section 5(5),
Article VIII of the Constitution, in the rule-
making power of the Supreme Court over
the rules on pleading, practice and
procedure in all courts, which includes the
sole power to fix the filing fees of cases in
courts.
Hence, the subject letter of NPC for
clarification as to its exemption from the
payment of filing fees and court fees.
Section 22 of Rule 141 reads:
Sec. 22. Government exempt. – The
Republic of the Philippines, its agencies and
instrumentalities are exempt from paying
the legal fees provided in this rule. Local
government units and government-owned or
controlled corporations with or without
independent charters are not exempt from
paying such fees. (emphasis supplied)
Section 70 of Republic Act No. 9136
(Electric Power Industry Reform Act of
2001), on privatization of NPC assets,
expressly states that the NPC "shall remain
as a national government-owned and
controlled corporation."
Thus, NPC is not exempt from payment of
filing fees.
The non-exemption of NPC is further
fortified by the promulgation on February
11, 2010 of A.M. No. 08-2-01-0, In re:
Petition for Recognition of the Exemption of
the Government Service Insurance System
(GSIS) from Payment of Legal Fees. In said
case, the Court, citing Echegaray v.
Secretary of Justice,1 stressed that the 1987
Constitution took away the power of
Congress to repeal, alter or supplement
rules concerning pleading, practice, and
procedure; and that the power to
promulgate these rules is no longer shared
by the Court with Congress and the
Executive, thus:
Since the payment of legal fees is a vital
component of the rules promulgated by this
Court concerning pleading, practice and
procedure, it cannot be validly annulled,
changed or modified by Congress. As one
of the safeguards of this Court’s institutional
independence, the power to promulgate
rules of pleading, practice and procedure is
now the Court’s exclusive domain. That
power is no longer shared by this Court with
Congress, much less the Executive.
Speaking for the Court, then Associate
Justice (now Chief Justice) Reynato S.
Puno traced the history of the rule-making
power of this Court and highlighted its
evolution and development in Echegaray v.
Secretary of Justice:
Under the 1935 Constitution, the power of
this Court to promulgate rules concerning
pleading, practice and procedure was
granted but it appeared to be co-existent
with legislative power for it was subject to
the power of Congress to repeal, alter or
supplement. Thus, its Section 13, Article VIII
provides:
Sec.13. The Supreme Court shall have the
power to promulgate rules concerning
pleading, practice and procedure in all
courts, and the admission to the practice of
law. Said rules shall be uniform for all courts
of the same grade and shall not diminish,
increase, or modify substantive rights. The
existing laws on pleading, practice, and
procedure are hereby repealed as statutes,
and are declared Rules of Court, subject to
the power of the Supreme Court to alter and
modify the same. The Congress shall have
the power to repeal, alter or supplement the
rules concerning pleading, practice and
procedure, and the admission to the
practice of law in the Philippines.
x x x           x x x          x x x
[T]he 1973 Constitution reiterated the power
of this Court "to promulgate rules
concerning pleading, practice, and
procedure in all courts, x x x which,
however, may be repealed, altered or
supplemented by the Batasang Pambansa x
x x." More completely, Section 5(2) [sic] 5 of
its Article X provided:
x x x           x x x          x x x
Sec. 5. The Supreme Court shall have the
following powers.
x x x           x x x          x x x
(5) Promulgate rules concerning pleading,
practice, and procedure in all courts, the
admission to the practice of law, and the
integration of the Bar, which, however, may
be repealed, altered, or supplemented by
the Batasang Pambansa. Such rules shall
provide a simplified and inexpensive
procedure for the speedy disposition of
case, shall be uniform for all courts of the
same grade, and shall not diminish,
increase, or modify substantive rights.
x x x           x x x          x x x
The 1987 Constitution molded an even
stronger and more independent judiciary.
Among others, it enhanced the rule making
power of this Court. Its Section 5(5), Article
VIII provides:
x x x           x x x          x x x
Section 5. The Supreme Court shall have
the following powers.
x x x           x x x          x x x
(5) Promulgate rules concerning the
protection and enforcement of constitutional
rights, pleading, practice, and procedure in
all courts, the admission to the practice of
law, the Integrated Bar, and legal
assistance to the underprivileged. Such
rules shall provide a simplified and
inexpensive procedure for the speedy
disposition of cases, shall be uniform for all
courts of the same grade, and shall not
diminish, increase, or modify substantive
rights. Rules of procedure of special courts
and quasi-judicial bodies shall remain
effective unless disapproved by the
Supreme Court.
The rule making power of this Court was
expanded. This Court for the first time was
given the power to promulgate rules
concerning the protection and enforcement
of constitutional rights. The Court was also
granted for the first time the power to
disapprove rules of procedure of special
courts and quasi-judicial bodies. But most
importantly, the 1987 Constitution took
away the power of Congress to repeal, alter,
or supplement rules concerning pleading,
practice and procedure. In fine, the power to
promulgate rules of pleading, practice and
procedure is no longer shared by this Court
with Congress, more so with the Executive.
The separation of powers among the three
co-equal branches of our government has
erected an impregnable wall that keeps the
power to promulgate rules of pleading,
practice and procedure within the sole
province of this Court. The other branches
trespass upon this prerogative if they enact
laws or issue orders that effectively repeal,
alter or modify any of the procedural rules
promulgated by this Court. Viewed from this
perspective, the claim of a legislative grant
of exemption from the payment of legal fees
under Section 39 of RA 8291 necessarily
fails.1avvphi1
With the foregoing categorical
pronouncement of the Court, it is clear that
NPC can no longer invoke Republic Act No.
6395 (NPC Charter), as amended by
Presidential Decree No. 938, as its basis for
exemption from the payment of legal fees.
WHEREFORE, it is hereby CLARIFIED that (b) The petition in G.R. No. 192073
the National Power Corporation is not filed by Rafael Jose Consing, Jr.
exempt from the payment of legal fees. (Consing, Jr.) assails the CA’s
Decision6 dated September 30, 2009
SO ORDERED. and Resolution7 dated April 28, 2010
inCA-G.R. SP No. 101355 which
affirmed the Orders dated July16,
20078 and September 4, 20079 of
the RTC of Makati City, Branch 60
SECOND DIVISION
(RTC-Makati City) in Civil Case No.
99-1418,upholding the denial of his
G.R. Nos. 175277 & 175285               motion for consolidation.
September 11, 2013
The Facts
UNICAPITAL, INC., UNICAPITAL
REALTY, INC., and JAIME J.
In 1997, Consing, Jr., an investment banker,
MARTINEZ, Petitioners,
and his mother, Cecilia Dela Cruz (Dela
vs.
Cruz), obtained an ₱18,000,000.00 loan
RAFAEL JOSE CONSING, JR., and THE
from Unicapital,₱12,000,000.00 of which
PRESIDING JUDGE OF THE REGIONAL
was acquired on July 24, 1997 and the
TRIAL COURT OF PASIG CITY, BRANCH
remaining₱6,000,000.00 on August 1, 1997.
168, Respondents.
The said loan was secured by Promissory
Notes10 and a Real Estate Mortgage11 over
x-----------------------x a 42,443 square meter-parcel of land
located at Imus, Cavite, registered in the
G.R. No. 192073 name of Dela Cruz as per Transfer
Certificate of Title (TCT) No. T-687599
RAFAEL JOSE CONSING, JR., Petitioner, (subject property).12 Prior to these
vs. transactions, Plus Builders, Inc. (PBI), a real
HON. MARISSA MACARAIG-GUILLEN, in estate company, was already interested to
her capacity as the Presiding Judge of develop the subject property into a
the Regional Trial Court of Makati City, residential subdivision.13 In this regard, PBI
Branch 60 and UNICAPITAL, entered into a joint venture agreement with
INC., Respondents. Unicapital, through its real estate
development arm, URI. In view of the
DECISION foregoing, the loan and mortgage over the
subject property was later on modified into
PERLAS-BERNABE, J.: an Option to Buy Real Property14 and, after
further negotiations, Dela Cruz decided to
Before the Court are consolidated petitions sell the same to Unicapital and PBI. For this
for review on certiorari1 assailing separate purpose, Dela Cruz appointed Consing, Jr.
issuances of the Court of Appeals (CA) as as her attorney-in-fact.15
follows:
Eventually, Unicapital, through URI,
(a) The petitions in G.R. Nos. purchased one-half of the subject property
175277 and 175285 filed by for a consideration of ₱21,221,500.00
Unicapital, Inc., (Unicapital), (against which Dela Cruz’s outstanding loan
Unicapital Realty, Inc. (URI), and obligations were first offset), while PBI
Unicapital Director and Treasurer bought the remaining half for the price of
Jaime J. Martirez (Martirez)assail ₱21,047,000.00.16 In this relation, Dela Cruz
the CA’s Joint Decision2 dated caused TCT No. T-687599 to be divided
October 20, 2005 and into three separate titles as follows: (a) TCT
Resolution3 dated October 25, 2006 No. T-851861 for URI;17 (b) TCT No. T-
in CA-G.R. SP Nos. 64019and 851862 for PBI;18 and (c)TCT No. T-51863
64451 which affirmed the which was designated as a road
Resolution  dated
4
September lot.19 However, even before URI and PBI
14,1999 and Order5 dated February were able to have the titles transferred to
15, 2001 of the Regional Trial Court their names, Juanito Tan Teng (Teng) and
(RTC) of Pasig City, Branch 68 Po Willie Yu (Yu) informed Unicapital that
(RTC-Pasig City) in SCA No. 1759, they are the lawful owners of the subject
upholding the denial of their motion property as evidenced by TCT No.T-
to dismiss; and 114708;20 that they did not sell the subject
property; and that Dela Cruz’s title, i.e., TCT
No. T-687599, thereto was a mere
forgery.21 Prompted by Teng and Yu’s
assertions, PBI conducted further
investigations on the subject property which
later revealed that Dela Cruz's title was
actually of dubious origin. Based on this
finding, PBI and Unicapital sent separate
demand letters22 to Dela Cruz and Consing,
Jr., seeking the return of the purchase price
they had paid for the subject property.
From the above-stated incidents stemmed
the present controversies as detailed
hereunder.
The Proceedings Antecedent to G.R. Nos.
175277 & 175285
On May 3, 1999, Consing, Jr. filed a
complaint, denominated as a Complex
Action for Declaratory Relief23 and later
amended to Complex Action for Injunctive
Relief24 (Consing, Jr.’s complaint) before the
RTC-Pasig City against Unicapital, URI,
PBI, Martirez, PBI General Manager
Mariano Martinez (Martinez), Dela Cruz and
Does 1-20, docketed as SCA No. 1759. In
his complaint, Consing, Jr. claimed that the
incessant demands/recovery efforts made
upon him by Unicapital and PBI to return to
them the purchase price they had paid for
the subject property constituted harassment
and oppression which severely affected his
personal and professional life.25 He also
averred that he was coerced to commit a
violation of Batas Pambansa Blg. 2226 as
Unicapital and PBI, over threats of filing a
case against him, kept on forcing him to
issue a post-dated check in the amount
sought to be recovered, notwithstanding
their knowledge that he had no funds for the
same.27 He further alleged that Unicapital
and URI required him to sign blank deeds of
sale and transfers without cancelling the old
one sin violation of the laws on land
registration and real estate
development.28 Likewise, Consing, Jr.
added that Unicapital and PBI’s
representatives were" speaking of him in a
manner that was inappropriate and
libelous,"29 and that some John Does
"deliberately engaged in a fraudulent
scheme to compromise Consing, Jr.’s
honor, integrity and fortune x x x consisting
of falsifying or causing to be falsified, or
attempting to present as falsified certain
transfers of Land Titles and Deeds for
profit,"30 classifying the foregoing as ultra
vires acts which should warrant sanctions
under the corporation law, Revised
Securities Act and related
laws.31 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.32
For their part, Unicapital, URI, and Martirez
(Unicapital, et al.) filed separate Motions to
Dismiss33 Consing, Jr.’s complaint
(Unicapital, et al.’s motion to dismiss) on the
ground of failure to state a cause of action,
considering that: (a) no document was
attached against which Consing, Jr.
supposedly derived his right and against
which his rights may be as certained; (b) the
demands to pay against Consing, Jr. and for
him to tender post-dated checks to cover
the amount due were well within the rights
of Unicapital as an unpaid creditor, as
Consing, Jr. had already admitted his
dealings with them; (c) the utterances
purportedly constituting libel were not set
out in the complaint; and (d) the laws
supposedly violated were not properly
identified. Moreover, Unicapital, et al.
posited that the RTC-PasigCity did not
acquire jurisdiction over the case given that
Consing, Jr. failed to pay the proper amount
of docket fees. In the same vein, they
maintained that the RTC-Pasig City had no
jurisdiction over their supposed violations of
the Corporation Code and Revised
Securities Act, which, discounting its merits,
should have been supposedly lodged with
the Securities and Exchange Commission.
Finally, they pointed out that Consing, Jr.’s
complaint suffers from a defective
verification and, thus, dismissible.34
Similar to Unicapital et al.’s course of action,
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. They also denied having singled out
Consing, Jr. because their collection efforts
were directed at both Consing, Jr. and Dela
Cruz, which should be deemed as valid and,
therefore, should not be restrained.35
On September 14, 1999, the RTC-Pasig
City issued a Resolution36 denying the
above mentioned 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 also noted that the
elements of libel in a criminal case are not
the same as those for a civil action founded
on the provisions of the Civil Code, and
therefore, necessitates a different treatment.
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. Consequently,
it ordered Unicapital and PBI, et al. to file
their Answer and, in addition, to submit" any
Comment or Reaction within five (5) days
from receipt hereof on the allegations of
Consing, Jr. in his rejoinder of September 9,
1999regarding the supposed filing of an
identical case in Makati City,"37 i.e., Civil
Case No. 99-1418. Unperturbed, Unicapital
and PBI, et al. moved for reconsideration
therefrom which was, however, denied by
the RTC-Pasig City in an Order38 dated
February 15, 2001 for lack of merit.
Aggrieved, they elevated the denial of their
motions to dismiss before the CA via a
petition for certiorari and
prohibition,  docketed as CA-G.R. SP Nos.
39
64019 and 64451.
On October 20, 2005, the CA rendered a
Joint Decision40 holding that no grave abuse
of discretion was committed by the RTC-
Pasig City in refusing to dismiss Consing,
Jr.'s complaint.1âwphi1 At the outset, it
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.41 It
also refused to dismiss the complaint for
lack of proper verification upon a finding that
the copy of the amended complaint
submitted to the RTC-Pasig City was
properly notarized.42 Moreover, it upheld the
order of the RTC-Pasig City for Unicapital
and PBI, et al. to submit their comment due
to the alleged existence of a similar case
filed before the RTC-Makati City.43
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. It found that Unicapital and PBI, et
al.’s purportedly abusive manner in
enforcing their claims against Consing, Jr.
was properly constitutive of a cause of
action as the same, if sufficiently proven,
would have subjected him to "defamation of
his name in business circles, the threats
and coercion against him to reimburse the
purchase price, fraud and falsification and
breach of fiduciary obligation." It also found
that the fact that Consing Jr.'s complaint
contains "nebulous" allegations will not
warrant its dismissal as any vagueness
therein can be clarified through a motion for
a bill of particulars."44 Furthermore, it noted
that Consing, Jr. does not seek to recover
his claims against any particular provision of
the corporation code or the securities act
but against the actions of Unicapital and
PBI, et al.; hence, Consing, Jr.’s complaint
was principally one for damages over which
the RTC has jurisdiction, and, in turn, there
lies no misjoinder of causes of action.45
Dissatisfied, only Unicapital, et al. sought
reconsideration therefrom but the same was
denied by the CA in a Resolution 46 dated
October 25,2006. Hence, the present
petitions for review on certiorari in G.R.
Nos.175277 and 175285.
The Proceedings Antecedent to G.R. No.
192073
On the other hand, on August 4, 1999,
Unicapital filed a complaint 47 for sum of
money with damages against Consing, Jr.
and Dela Cruz before the RTC-Makati City,
docketed as Civil Case No. 99-1418,
seeking to recover (a) the amount of
₱42,195,397.16, representing the value of
their indebtedness based on the Promissory
Notes (subject promissory notes) plus
interests; (b) ₱5,000,000.00 as exemplary
damages; (c) attorney's fees; and (d) costs
of suit.48
PBI also filed a complaint for damages and
attachment against Consing, Jr. and Dela
Cruz before the RTC of Manila, Branch 12,
docketed as Civil Case No. 99-95381, also
predicated on the same set of facts as
above narrated.49 In its complaint, PBI
prayed that it be allowed to recover the
following: (a) ₱13,369,641.79, representing
the total amount of installment payments
made as actual damages plus interests; (b)
₱200,000.00 as exemplary damages; (c)
₱200,000.00 as moral damages; (d)
attorney's fees; and (e) costs of suit. 50 Civil
Case No. 99-95381 was subsequently
consolidated with SCA No. 1759 pending
before the RTC-Pasig City.51
For his part, Consing, Jr. filed a Motion to
Dismiss Civil Case No. 99-1418 which was,
however, denied by the RTC-Makati City in
an Order52 dated November 16, 1999.
Thereafter, he filed a Motion for
Consolidation53 (motion for consolidation) of
Civil Case No. 99-1418 with his own
initiated SCA No. 1759 pending before the
RTC-Pasig City.
In an Order54 dated July 16, 2007, the RTC-
Makati City dismissed Consing, Jr.’s motion
for consolidation and, in so doing, ruled that
the cases sought to be consolidated had no
identity of rights or causes of action and the
reliefs sought for by Consing, Jr. from the
RTC-Pasig City will not bar Unicapital from
pursuing its money claims against him.
Moreover, the RTC-Makati City noted that
Consing, Jr. filed his motion only as an after
thought as it was made after the mediation
proceedings between him and Unicapital
failed. Consing, Jr.'s motion for
reconsideration therefrom was denied in an
Order55 dated September 4, 2007. Hence,
he filed a petition for certiorari before the
CA, docketed as CA-G.R. SP No. 101355,
ascribing grave abuse of discretion on the
part of the RTC-Makati City in refusing to
consolidate Civil Case No. 99-1418 with
SCA No. 1759 in Pasig City.
On September 30, 2009, the CA rendered a
Decision56 sustaining the Orders dated July
16, 2007 and September 4, 2007 of the
RTC-Makati City which denied Consing,
Jr.’s motion for consolidation. It held that
consolidation is a matter of sound discretion
on the part of the trial court which could be
gleaned from the use of the word "may" in
Section 1, Rule38 of the Rules of Court.
Considering that preliminary steps (such as
mediation) have already been undertaken
by the parties in Civil Case No.99-1418
pending before the RTC-Makati City, its
consolidation with SCA No. 1759 pending
before the RTC-Pasig City "would merely
result in complications in the work of the
latter court or squander the resources or
remedies already utilized in the Makati
case."57 Moreover, it noted that the records
of the consolidated Pasig and Manila cases,
i.e., SCA No. 1759 and Civil Case No. 99-
95381, respectively, had already been
elevated to the Court, that joint proceedings
have been conducted in those cases and
that the pre-trial therein had been
terminated as early as October 23,
2007.Therefore, due to these reasons, the
consolidation prayed for would be
impracticable and would only cause a
procedural faux pas. Undaunted, Consing,
Jr. filed a motion for reconsideration
therefrom but was denied by the CA in a
Resolution58 dated April 28, 2010. Hence,
the present petition for review on certiorari
in G.R. No. 192073.
The Proceedings Before the Court
After the filing of the foregoing cases, the
parties were required to file their respective
comments and replies. Further, considering
that G.R. No.192073 (Makati case) involves
the same parties and set of facts with those
in G.R. Nos. 175277 & 175285 (Pasig
case), these cases were ordered
consolidated per the Court's
Resolution59 dated November 17, 2010. On
March 9, 2011, the Court resolved to give
due course to the instant petitions and
required the parties to submit their
respective memoranda.60
The Issues Before the Court
The essential issues in these cases are as
follows: (a) in G.R. Nos.175277 and
175285, whether or not the CA erred in
upholding the RTC-Pasig City’s denial of
Unicapital, et al.’s motion to dismiss; and (b)
in G.R. No. 192073, whether or not the CA
erred in upholding the RTC-Makati City’s
denial of Consing, Jr.’s motion for
consolidation.
The Court’s Ruling
A. Propriety of the denial of
Unicapital, et al.’s motion to
dismiss and ancillary issues.
A cause of action is defined as the act or
omission by which a party violates a right of
another.61 It is well-settled that the existence
of a cause of action is determined by the
allegations in the complaint.62 In this
relation, a complaint is said to sufficiently
assert a cause of action if, admitting what
appears solely on its face to be correct, the
plaintiff would be entitled to the relief prayed
for.63 Thus, if the allegations furnish
adequate basis by which the complaint can
be maintained, then the same should not be
dismissed, regardless of the defenses that
may be averred by the defendants.64 As
edified in the case of Pioneer Concrete
Philippines, Inc. v. Todaro,65 citing
Hongkong and Shanghai Banking
Corporation, Limited. v. Catalan66 (HSBC):
The elementary test for failure to state a
cause of action is whether the complaint
alleges facts which if true would justify the
relief demanded. Stated otherwise, may the
court render a valid judgment upon the facts
alleged therein? The inquiry is into the
sufficiency, not the veracity of the material
allegations. If the allegations in the
complaint furnish sufficient basis on which it
can be maintained, it should not be
dismissed regardless of the defense that
may be presented by the
defendants.  (Emphasis supplied)
67
Stated otherwise, the resolution on this
matter should stem from an analysis on
whether or not the complaint is able to
convey a cause of action; and not that the
complainant has no cause of action. Lest it
be misunderstood, failure to state a cause
of action is properly a ground for a motion to
dismiss under Section 1(g), Rule 1668 of the
Rules of Court(Rules), while the latter is not
a ground for dismissal under the same rule.
In this case, the Court finds that Consing,
Jr.’s complaint in SCA No.1759 properly
states a cause of action since the
allegations there insufficiently bear out a
case for damages under Articles 19 and 26
of the Civil Code.
Records disclose that Consing, Jr.’s
complaint contains allegations which aim to
demonstrate the abusive manner in which
Unicapital and PBI, et al. enforced their
demands against him. Among others, the
complaint states that Consing, Jr. "has
constantly been harassed and bothered by
Unicapital and PBI, et al.; x x x besieged by
phone calls from them; x x x has had
constant meetings with them variously, and
on a continuing basis, such that he is
unable to attend to his work as an
investment banker."69 In the same pleading,
he also alleged that Unicapital and PBI, et
al.’s act of "demanding a postdated check
knowing fully well that he does not have the
necessary funds to cover the same, nor is
he expecting to have them is equivalent to
asking him to commit a crime under
unlawful coercive force."70 Accordingly,
these specific allegations, if hypothetically
admitted, may result into the recovery of
damages pursuant to Article 19 of the Civil
Code which states that "every person must,
in the exercise of his rights and in the
performance of his duties, act with justice,
give everyone his due, and observe honesty
and good faith." As explained in the HSBC
case:
When a right is exercised in a manner which
does not conform with the norms enshrined
in Article 19 and results in damage to
another, a legal wrong is thereby committed
for which the wrongdoer must beheld
responsible. But a right, though by itself
legal because it is recognized or granted by
law as such, may nevertheless become the
source of some illegality. A person should
be protected only when he acts in the
legitimate exercise of his right, that is, when
he acts with prudence and in good faith; but
not when he acts with negligence or abuse.
There is an abuse of right when it is
exercised for the only purpose of prejudicing
or injuring another. The exercise of a right
must be in accordance with the purpose for
which it was established, and must not be
excessive or unduly harsh; there must be no
intention to injure another.71 (Emphasis
supplied)
Likewise, Consing, Jr.’s complaint states a
cause of action for damages under Article
26 of the Civil Code which provides that:
Article 26. Every person shall respect the
dignity, personality, privacy and peace of
mind of his neighbors and other persons.
The following and similar acts, though they
may not constitute a criminal offense, shall
produce a cause of action for damages,
prevention and other relief:
(1) Prying into the privacy of
another's residence;
(2) Meddling with or disturbing the
private life or family relations of
another;
(3) Intriguing to cause another to be
alienated from his friends;
(4) Vexing or humiliating another on
account of his religious beliefs, lowly
station in life, place of birth, physical
defect, or other personal condition.
The rationale therefor was explained in the
case of Manaloto v. Veloso III,72 citing
Concepcion v. CA,73 to wit:
The philosophy behind Art. 26 underscores
the necessity for its inclusion in our civil law.
The Code Commission stressed in no
uncertain terms that the human personality
must be exalted. The sacredness of human
personality is a concomitant consideration
of every plan for human amelioration. The
touchstone of every system of law, of the
culture and civilization of every country, is
how far it dignifies man. If the statutes
insufficiently protect a person from being
unjustly humiliated, in short, if human
personality is not exalted - then the laws are
indeed defective. Thus, under this article,
the rights of persons are amply protected,
and damages are provided for violations of
a person's dignity, personality, privacy and
peace of mind.74
To add, a violation of Article 26 of the Civil
Code may also lead to the payment of moral
damages under Article 2219(10)75 of the
Civil Code.
Records reveal that Consing, Jr., in his
complaint, alleged that "he has come to
discover that Unicapital and PBI, et al. are
speaking of him in a manner that is
inappropriate and libelous; and that they
have spread their virulent version of events
in the business and financial community
such that he has suffered and continues to
suffer injury upon his good name and
reputation which, after all, is the most
sacred and valuable wealth he possesses -
especially considering that he is an
investment banker."76 In similar regard, the
hypothetical admission of these allegations
may result into the recovery of damages
pursuant to Article 26, and even
Article2219(10), of the Civil Code.
Corollary thereto, Unicapital, et al.’s
contention77 that the case should be
dismissed on the ground that it failed to set
out the actual libelous statements
complained about cannot be given
credence. These incidents, as well as the
specific circumstances surrounding the
manner in which Unicapital and PBI, et al.
pursued their claims against Consing, Jr.
may be better ventilated during trial. It is a
standing rule that issues that require the
contravention of the allegations of the
complaint, as well as the full ventilation, in
effect, of the main merits of the case, should
not be within the province of a mere motion
to dismiss,78 as in this case. Hence, as what
is only required is that the allegations
furnish adequate basis by which the
complaint can be maintained, the Court – in
view of the above-stated reasons – finds
that the RTC-Pasig City’s denial of
Unicapital, et al.’s motion to dismiss on the
ground of failure to state a cause of action
was not tainted with grave abuse of
discretion which would necessitate the
reversal of the CA’s ruling. Verily, for grave
abuse of discretion to exist, the abuse of
discretion must be patent and gross so as to
amount to an evasion of a positive duty or a
virtual refusal to perform a duty enjoined by
law, or to act at all in contemplation of
law.79 This the Court does not perceive in
the case at bar.
Further, so as to obviate any confusion on
the matter, the Court equally finds that the
causes of action in SCA No. 1759 were not
– as Unicapital, et al. claim – misjoined
even if Consing, Jr. averred that Unicapital
and PBI, et al. violated certain provisions of
the Corporation Law and the Revised
Securities Act.80
The rule is that a party’s failure to observe
the following conditions under Section 5,
Rule 2 of the Rules results in a misjoinder of
causes of action:81
SEC. 5. Joinder of causes of action . - A
party may in one pleading assert, in the
alternative or otherwise, as many causes of
action as he may have against an opposing
party, subject to the following conditions:
(a) The party joining the causes of
action shall comply with the rules on
joinder of parties;
(b) The joinder shall not include
special civil actions governed by
special rules;
(c) Where the causes of action are
between the same parties but
pertain to different venues or
jurisdictions, the joinder may be
allowed in the Regional Trial Court
provided one of the causes of action
falls within the jurisdiction of said
court and the venue lies therein; and
(d) Where the claims in all the
causes of action are principally for
recovery of money the aggregate
amount claimed shall be the test of
jurisdiction. (Emphasis supplied)
A careful perusal of his complaint discloses
that Consing, Jr. did not seek to hold
Unicapital and PBI, et al. liable for any
specific violation of the Corporation Code or
the Revised Securities Act. Rather, he
merely sought damages for Unicapital and
PBI, et al.’s alleged acts of making him sign
numerous documents and their use of the
same against him. In this respect, Consing,
Jr. actually advances an injunction and
damages case82 which properly falls under
the jurisdiction of the RTC-Pasig
City.83 Therefore, there was no violation of
Section 5, Rule 2 of the Rules, particularly,
paragraph (c) thereof. Besides, even on the
assumption that there was a misjoinder of
causes of action, still, such defect should
not result in the dismissal of Consing, Jr.’s
complaint. Section 6, Rule 2 of the Rules
explicitly states that a "misjoinder of causes
of action is not a ground for dismissal of an
action" and that "a misjoined cause of action
may, on motion of a party or on the initiative
of the court, be severed and proceeded with
separately."
Neither should Consing, Jr.’s failure to pay
the required docket fees lead to the
dismissal of his complaint.1âwphi1 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.84 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. CA85 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:86
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.87 (Emphasis and italics in the original)
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
month88 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 2,89 Rule
141 of the Rules.
Finally, on the question of whether or not
Consing, Jr.'s complaint was properly
verified, suffice it to state that since the copy
submitted to the trial court was duly
notarized by one Atty. Allan B. Gepty and
that it was only Unicapital, et al.’s copy
which lacks the notarization, then there was
sufficient compliance with the requirements
of the rules on pleadings.90
In fine, 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. As such, the petitions in
G.R. Nos. 175277 and 175285 must be
denied.
B. Propriety of the denial of
Consing, Jr.’s motion for
consolidation.
The crux of G.R. No. 192073 is the propriety
of the RTC-Makati City’s denial of Consing,
Jr.’s motion for the consolidation of the
Pasig case, i.e., SCA No. 1759, and the
Makati case, i.e., Civil Case No. 99-
1418.Records show that the CA upheld the
RTC-Makati City’s denial of the foregoing
motion, finding that the consolidation of
these cases was merely discretionary on
the part of the trial court. It added that it was
"impracticable and would cause a
procedural faux pas
"if it were to "allow the RTC-Pasig City to
preside over the Makati case."91
The CA’s ruling is proper.
It is hornbook principle that when or two or
more cases involve the same parties and
affect closely related subject matters, the
same must be consolidated and jointly tried,
in order to serve the best interest of the
parties and to settle the issues between
them promptly, thus, resulting in a speedy
and inexpensive determination of cases. In
addition, consolidation serves the purpose
of avoiding the possibility of conflicting All told, the Court finds the consolidation of
decisions rendered by the courts in two or SCA No. 1759 and Civil Case No. 99-1418
more cases, which otherwise could be to be improper, impelling the affirmance of
disposed of in a single suit. 92 The governing the CA’s ruling. Consequently, the petition
rule is Section 1, Rule 31 of the Rules which in G.R. No. 192073 must also be denied.
provides:
WHEREFORE, the petitions in G.R. Nos.
SEC. 1. Consolidation. - When actions 175277, 175285 and 192073 are DENIED.
involving a common question of law or fact Accordingly, the Court of Appeals’ Joint
are pending before the court, it may order a Decision dated October 20, 2005 and
joint hearing or trial of any or all the matters Resolution dated October 25, 2006 in CA-
in issue in the actions; it may order all the G.R. SP Nos. 64019 and 64451 and the
actions consolidated; and it may make such Decision dated September 30, 2009 and
orders concerning proceedings therein as Resolution dated April 28, 2010 in CA-G.R.
may tend to avoid unnecessary costs or No. 101355 are hereby AFFIRMED.
delay.
ESTELA M. PERLAS-BERNABE
In the present case, the Court observes that Associate Justice
the subject cases, i.e., SCA No. 1759 and
Civil Case No. 99-1418, although involving WE CONCUR:
the same parties and proceeding from a
similar factual milieu, should remain
unconsolidated since they proceed from
different sources of obligations and, hence,
would not yield conflicting dispositions. SCA
No. 1759 is an injunction and damages
case based on the Civil Code provisions on
abuse of right and defamation, while Civil
Case No. 99-1418 is a collection and
damages suit based on actionable
documents, i.e., the subject promissory
notes. In particular, SCA No. 1759 deals
with whether or not Unicapital and BPI, et
al, abused the manner in which they
demanded payment from Consing, Jr., while
Civil Case No. 99-1418 deals with whether
or not Unicapital may demand payment
from Consing, Jr. based on the subject
promissory notes. Clearly, a resolution in
one case would have no practical effect as
the core issues and reliefs sought in each
case are separate and distinct from the
other.

Likewise, as the CA correctly pointed out,

the RTC-Makati City could not have been
failured in retaining Civil Case No. 99-1418
in its dockets since pre-trial procedures
have already been undertaken therein and,
thus, its consolidation with SCA No. 1759
pending before the RTC-Pasig City would
merely result in complications on the part of
the latter court or squander the resources or
remedies already utilized in Civil Case No.
99-1418.93 In this light, aside from the
perceived improbability of having conflicting
decisions, the consolidation of SCA No.
1759 and Civil Case No. 99-1418 would,
contrary to its objective, only delay the
proceedings and entail unnecessary costs.
THIRD DIVISION equivalent to 5% of all sums due from
petitioners as attorney's fees.
G.R. No. 151242               June 15, 2005
The Makati RTC Clerk of Court assessed
PROTON PILIPINAS CORPORATION, the docket fees which BNP paid at
AUTOMOTIVE PHILIPPINES, ASEA ONE ₱352,116.307 which was computed as
CORPORATION and follows:8
AUTOCORP, Petitioners,
vs. First Cause of Action  $ 844,674.07
BANQUE NATIONALE DE
PARIS,1 Respondent. Second Cause of Action  171,120.53
Third Cause of Action  529,189.80
DECISION
$1,544,984.40
CARPIO MORALES, J.:
5% as Attorney's Fees  $ 77,249.22
It appears that sometime in 1995, petitioner TOTAL ………….. $1,622,233.62
Proton Pilipinas Corporation (Proton)
Conversion rate to peso x 43_
availed of the credit facilities of herein
respondent, Banque Nationale de Paris TOTAL ………….. ₱69,756,000.00
(BNP). To guarantee the payment of its (roundoff)
obligation, its co-petitioners Automotive
Corporation Philippines (Automotive), Asea
Computation based on Rule 141:
One Corporation (Asea) and Autocorp
Group (Autocorp) executed a corporate
guarantee2 to the extent of
US$2,000,000.00. BNP and Proton
subsequently entered into three trust receipt
COURT JDF
agreements dated June 4, 1996,3 January
14, 1997,4 and April 24, 1997.5 ₱ 69,756,000.00 ₱ 69.606.000.00

Under the terms of the trust receipt - 150,000.00 x .003

agreements, Proton would receive imported 69,606,000.00 208,818.00
passenger motor vehicles and hold them in
trust for BNP. Proton would be free to sell x .002 + 450.00
the vehicles subject to the condition that it 139,212.00 ₱ 209,268.00
would deliver the proceeds of the sale to
BNP, to be applied to its obligations to it. In + 150.00
case the vehicles are not sold, Proton would
₱ 139,362.00
return them to BNP, together with all the
accompanying documents of title. LEGAL ₱139,362.00
:
Allegedly, Proton failed to deliver the +
proceeds of the sale and return the unsold 209,268.00
motor vehicles. x 1% =
₱348,630.00
₱3,486.30
Pursuant to the corporate guarantee, BNP
demanded from Automotive, Asea and ₱
Autocorp the payment of the amount of 139,362.00
US$1,544,984.406 representing Proton's +
total outstanding obligations. These 209,268.00
guarantors refused to pay, however. Hence,
BNP filed on September 7, 1998 before the 3,486.00
Makati Regional Trial Court (RTC) a
- Total fees
complaint against petitioners praying that ₱
paid by the
they be ordered to pay (1) US$1,544,984.40 352,116.30
plaintiff
plus accrued interest and other related
charges thereon subsequent to August 15,
1998 until fully paid and (2) an amount To the complaint, the defendants-herein
petitioners filed on October 12, 1998 a
Motion to Dismiss9 on the ground that BNP
failed to pay the correct docket fees to thus
prevent the trial court from acquiring
jurisdiction over the case.10 As additional
ground, petitioners raised prematurity of the
complaint, BNP not having priorly sent any
demand letter.11
By Order12 of August 3, 1999, Branch 148 of
the Makati RTC denied petitioners' Motion
to Dismiss, viz:
Resolving the first ground relied upon by the
defendant, this court believes and so hold
that the docket fees were properly paid. It is
the Office of the Clerk of Court of this
station that computes the correct docket
fees, and it is their duty to assess the
docket fees correctly, which they
did.1avvphi1.zw+
Even granting arguendo that the docket
fees were not properly paid, the court
cannot just dismiss the case. The Court has
not yet ordered (and it will not in this
case) to pay the correct docket fees, thus
the Motion to dismiss is premature, aside
from being without any legal basis.
As held in the case of National Steel
Corporation vs. CA, G.R. No. 123215,
February 2, 1999, the Supreme Court said:
xxx
Although the payment of the proper docket
fees is a jurisdictional requirement, the trial
court may allow the plaintiff in an action to
pay the same within a reasonable time
within the expiration of applicable
prescription or reglementary period. If the
plaintiff fails to comply with this requirement,
the defendant should timely raise the issue
of jurisdiction or else he would be
considered in estoppel. In the latter case,
the balance between appropriate docket
fees and the amount actually paid by the
plaintiff will be considered a lien or (sic) any
award he may obtain in his favor.
As to the second ground relied upon by the
defendants, in that a review of all annexes
to the complaint of the plaintiff reveals that
there is not a single formal demand letter for
defendants to fulfill the terms and conditions
of the three (3) trust agreements.
In this regard, the court cannot sustain the
submission of defendant. As correctly
pointed out by the plaintiff, failure to make a
formal demand for the debtor to pay the
plaintiff is not among the legal grounds for
the dismissal of the case. Anyway, in the
appreciation of the court, this is simply
evidentiary.
xxx
WHEREFORE, for lack of merit, the Motion
to Dismiss interposed by the defendants is
hereby DENIED.13 (Underscoring supplied)
Petitioners filed a motion for
reconsideration14 of the denial of their
Motion to Dismiss, but it was denied by the
trial court by Order15 of October 3, 2000.
Petitioners thereupon brought the case on
certiorari and mandamus16 to the Court of
Appeals which, by Decision17 of July 25,
2001, denied it in this wise:
… Section 7(a) of Rule 141 of the Rules of
Court excludes interest accruing from the
principal amount being claimed in the
pleading in the computation of the
prescribed filing fees. The complaint was
submitted for the computation of the filing
fee to the Office of the Clerk of Court of the
Regional Trial Court of Makati City which
made an assessment that respondent paid
accordingly. What the Office of the Clerk of
Court did and the ruling of the respondent
Judge find support in the decisions of the
Supreme Court in Ng Soon vs. Alday and
Tacay vs. RTC of Tagum, Davao del Norte.
In the latter case, the Supreme Court
explicitly ruled that "where the action is
purely for recovery of money or damages,
the docket fees are assessed on the basis
of the aggregate amount claimed, exclusive
only of interests and costs."
Assuming arguendo that the correct filing
fees was not made, the rule 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. Here respondent Judge did not
make any finding, and rightly so, that the
filing fee paid by private respondent was
insufficient.
On the issue of the correct dollar-peso rate
of exchange, the Office of the Clerk of Court
of the RTC of Makati pegged it at ₱ 43.21 to
US$1. In the absence of any office guide of
the rate of exchange which said court
functionary was duty bound to follow, the
rate he applied is presumptively correct.
Respondent Judge correctly ruled that the
matter of demand letter is evidentiary and
does not form part of the required
allegations in a complaint. Section 1, Rule 8
of the 1997 Rules of Civil Procedure
pertinently provides:
"Every pleading shall contain in a
methodical and logical form, a plain, concise
and direct statement of the ultimate facts on
which the party pleading relies for his claim
or defense, as the case may be, omitted the
statement of mere evidentiary facts."
Judging from the allegations of the
complaint particularly paragraphs 6, 12, 18,
and 23 where allegations of imputed
demands were made upon the defendants
to fulfill their respective obligations,
annexing the demand letters for the purpose
of putting up a sufficient cause of action is
not required.
In fine, respondent Judge committed no
grave abuse of discretion amounting to lack
or excess of jurisdiction to warrant certiorari
and mandamus.18 (Underscoring supplied)
Their Motion for Reconsideration19 having
been denied by the Court of
Appeals,20 petitioners filed the present
petition for review on certiorari21 and pray
for the following reliefs:
WHEREFORE, in view of all the foregoing,
it is most respectfully prayed of this
Honorable Court to grant the instant petition
by REVERSING and SETTING ASIDE the
questioned Decision of July 25, 2001 and
the Resolution of December 18, 2001 for
being contrary to law, to Administrative
Circular No. 11-94 and Circular No. 7 and
instead direct the court a quo to require
Private Respondent Banque to pay the
correct docket fee pursuant to the correct
exchange rate of the dollar to the peso on
September 7, 1998 and to quantify its
claims for interests on the principal
obligations in the first, second and third
causes of actions in its Complaint in Civil
Case No. 98-2180.22 (Underscoring
supplied)
Citing Administrative Circular No. 11-
94,23 petitioners argue that BNP failed to
pay the correct docket fees as the said
circular provides that in the assessment
thereof, interest claimed should be included.
There being an underpayment of the docket
fees, petitioners conclude, the trial court did
not acquire jurisdiction over the case.
Additionally, petitioners point out that the
clerk of court, in converting BNP's claims
from US dollars to Philippine pesos, applied
the wrong exchange rate of US $1 =
₱43.00, the exchange rate on September 7,
1998 when the complaint was filed having
been pegged at US $1 = ₱43.21. Thus, by
petitioners' computation, BNP's claim as of
August 15, 1998 was actually
₱70,096,714.72,  not ₱69,756,045.66.
24
Furthermore, petitioners submit that
pursuant to Supreme Court Circular No.
7,25 the complaint should have been
dismissed for failure to specify the amount
of interest in the prayer.
Circular No. 7 reads:
TO: JUDGES AND CLERKS OF COURT
OF THE COURT OF TAX APPEALS,
REGIONAL TRIAL COURTS,
METROPOLITAN TRIAL COURTS IN
CITIES, MUNICIPAL TRIAL COURTS,
MUNICIPAL CIRCUIT TRIAL COURTS,
SHARI'A DISTRICT COURTS;AND THE
INTEGRATED BAR OF THE PHILIPPINES
SUBJECT: ALL COMPLAINTS MUST
SPECIFY AMOUNT OF
DAMAGES SOUGHT NOT ONLY IN THE
BODY OF THE
PLEADING, BUT ALSO IN THE PRAYER
IN ORDER TO BE ACCEPTED AND
ADMITTED FOR FILING. THE AMOUNT
OF DAMAGES SO SPECIFIED IN THE
COMPLAINT SHALL BE THE BASIS FOR
ASSESSING THE AMOUNT OF THE
FILING FEES.
In Manchester Development Corporation
vs. Court of Appeals, No. L-75919, May 7,
1987, 149 SCRA 562, this Court
condemned the practice of counsel who in
filing the original complaint omitted from the
prayer any specification of the amount of
damages although the amount of over P78
million is alleged in the body of the
complaint. This Court observed that "(T)his
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. xxx"
For the guidance of all concerned, the
WARNING given by the court in the afore-
cited case is reproduced hereunder:
"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 amount sought in the amended
pleading. The ruling in the Magaspi case
(115 SCRA 193) in so far as it is
inconsistent with this pronouncement is
overturned and reversed."
Strict compliance with this Circular is hereby
enjoined.
Let this be circularized to all the courts
hereinabove named and to the President
and Board of Governors of the Integrated
Bar of the Philippines, which is hereby
directed to disseminate this Circular to all its
members.
March 24, 1988.
(Sgd). CLAUDIO TEEHANKEE
Chief Justice
(Emphasis and underscoring supplied)
On the other hand, respondent maintains
that it had paid the filing fee which was
assessed by the clerk of court, and that
there was no violation of Supreme Court
Circular No. 7 because the amount of
damages was clearly specified in the
prayer, to wit:
2. On the FIRST CAUSE OF ACTION -
(c) Defendant PROTON be ordered to pay
the sum of (i) US DOLLARS EIGHT
HUNDRED FORTY FOUR THOUSAND SIX
HUNDRED SEVENTY FOUR AND SEVEN
CENTS (US$ 844,674.07), plus accrued
interests and other related charges thereon
subsequent to August 15, 1998, until fully
paid; and (ii) an amount equivalent to 5% of
all sums due from said Defendant, as and
for attorney's fees;
3. On the SECOND CAUSE OF ACTION -
(d) Defendant PROTON be ordered to pay
the sum of (i) US DOLLARS ONE
HUNDRED TWENTY AND FIFTY THREE
CENTS (US$171,120.53), plus accrued
interests and other related charges thereon
subsequent to August 15, 1998 until fully
paid; and (ii) an amount equivalent to 5% of
all sums due from said Defendant, as and
for attorney's fees;
4. On the THIRD CAUSE OF ACTION -
(e) Defendant PROTON be ordered to pay
the sum of (i) US DOLLARS FIVE
HUNDRED TWENTY NINE THOUSAND
ONE HUNDRED EIGHTY NINE AND
EIGHTY CENTS (US$529,189.80), plus
accrued interests and other related charges
thereon subsequent to August 15, 1998 until
fully paid; and (ii) an amount equivalent to
5% or all sums due from said Defendant, as
and for attorney's fees;
5. On ALL THE CAUSES OF ACTION -
Defendants AUTOMOTIVE
CORPORATION PHILIPPINES, ASEA ONE
CORPORATION and AUTOCORP GROUP
to be ordered to pay Plaintiff BNP the
aggregate sum of (i) US DOLLARS ONE
MILLION FIVE HUNDRED FORTY FOUR
THOUSAND NINE HUNDRED EIGHTY
FOUR AND FORTY CENTS
(US$1,544,984.40) (First through Third
Causes of Action), plus accrued interest and
other related charges thereon subsequent
to August 15, 1998 until fully paid; and (ii)
an amount equivalent to 5% of all sums due
from said Defendants, as and for attorney's
fees.26
Moreover, respondent posits that the
amount of US$1,544,984.40 represents not
only the principal but also interest and other
related charges which had accrued as of
August 15, 1998. Respondent goes even
further by suggesting that in light of Tacay 10 When the case does
v. Regional Trial Court of Tagum, Davao del . not concern property
Norte27 where the Supreme Court held, (naturalization,
adoption, legal
Where the action is purely for the recovery separation, etc.) ..
of money or damages, the docket fees are ……... 64.00
assessed on the basis of the aggregate
amount claimed, exclusive only of 11 In forcible entry and
interests and costs.28 (Emphasis and . illegal detainer cases
underscoring supplied), appealed from inferior
courts
it made an overpayment. …………………………
………. 40.00
When Tacay was decided in 1989, the
pertinent rule applicable was Section 5 (a) If the case concerns real estate, the
of Rule 141 which provided for the following: assessed value thereof shall be considered
in computing the fees.
SEC. 5. Clerks of Regional Trial Courts. -
(a) For filing an action or proceeding, or a In case the value of the property or estate or
permissive counter-claim or cross-claim not the sum claim is less or more in accordance
arising out of the same transaction subject with the appraisal of the court, the
of the complaint, a third-party complaint and difference of fees shall be refunded or paid
a complaint in intervention and for all as the case may be.
services in the same, if the sum
claimed, exclusive of interest, of the When the complaint in this case was filed
value of the property in litigation, or the in 1998, however, as correctly pointed out
value of the estate, is: by petitioners, Rule 141 had been amended
by Administrative Circular No. 11-9429 which
Less than ₱ 5,000.00 provides:
…. ₱
1. BY RESOLUTION OF THE COURT,
………………………… 32.00
…… DATED JUNE 28, 1994, PURSUANT TO
SECTION 5 (5) OF ARTICLE VIII OF THE
₱ 5,000.00 or more but CONSTITUTION, RULE 141, SECTION 7
2. less than ₱ 10,000.00 48.00 (a) AND (d), and SECTION 8 (a) and (b) OF
………… THE RULES OF COURT ARE HEREBY
₱ 10,000.00 or more AMENDED TO READ AS FOLLOWS:
3. but less than ₱ 64.00
20,000.00 ……….. RULE 141
LEGAL FEES
₱ 20,000.00 or more
4. but less than ₱ 80.00 xxx
40,000.00 ………..
₱ 40,000.00 or more Sec. 7. Clerks of Regional Trial Courts
120.0
5. but less than ₱
0 (a) For filing an action or a permissive
60,000.00 ………..
counterclaim or money claim against an
₱ 60,000.00 or more estate not based on judgment, or for filing
160.0
6. but less than ₱ with leave of court a third-party, fourth-party,
0
80,000.00 ………. etc. complaint, or a complaint in
₱ 80,000.00 or more intervention, and for all clerical services in
200.0 the same, if the total sum
7. but less than ₱
0 claimed, inclusive of interest, damages
150,000.00 ………
of whatever kind, attorney's fees,
And for each ₱ litigation expenses, and costs, or the
8. 1,000.00 in excess of ₱ 4.00 stated value of the property in litigation,
150,000.00 ..... is:
When the value of the
400.0 1. Not more than ₱ ₱
9. case cannot be
0 100,000.00 400.0
estimated ………
 ………………………… filing fees, speaks of "the sum
0 claimed, exclusive of interest." This
…
clearly implies that the specification of
₱ 100,000.00, or more the interest rate is not that
600.0
2. but not more than ₱ indispensable.
0
150,000.00 …
For each ₱ 1,000.00 in Factually, therefore, not everything was left
3. excess of ₱ 5.00 to "guesswork" as respondent Judge has
150,000.00 …………. opined. The sums claimed were
ascertainable, sufficient enough to allow a
computation pursuant to Rule 141, section
xxx 5(a).

Sec. 8. Clerks of Metropolitan and Municipal
Trial Courts
(a) For each civil action or
proceeding, where the value
of the subject matter
involved, or the amount of
the demand, inclusive of
interest, damages or
whatever kind, attorney's
fees, litigation expenses,
and costs, is:
Furthermore, contrary to the position taken
by respondent Judge, the amounts
claimed need not be initially stated with
mathematical precision. The same Rule
141, section 5(a) (3rd paragraph), allows
an appraisal "more or less."31 Thus:
"In case the value of the property or estate
or the sum claimed is less or more in
accordance with the appraisal of the court,
the difference of fee shall be refunded or
paid as the case may be."

Not more than ₱ In other words, a final determination is still

₱ to be made by the Court, and the fees
20,000.00
1. 120.0 ultimately found to be payable will either be
…………………………
0 additionally paid by the party concerned or
… ...
refunded to him, as the case may be. The
More than ₱ 20,000.00 above provision clearly allows an initial
400.0
2. but not more than ₱ payment of the filing fees corresponding to
0
100,000.00 …. the estimated amount of the claim subject to
More than ₱ adjustment as to what later may be proved.
100,000.00 but not 850.0
3. ". . . there is merit in petitioner's claim that
more than ₱ 0
200,000.00 … the third paragraph of Rule 141, Section
5(a) clearly contemplates a situation where
an amount is alleged or claimed in the
(Emphasis and underscoring
complaint but is less or more than what is
supplied)
later proved. If what is proved is less than
what was claimed, then a refund will be
The clerk of court should thus have made; if more, additional fees will be
assessed the filing fee by taking into exacted. Otherwise stated, what is subject
consideration "the total sum to adjustment is the difference in the fee
claimed, inclusive of interest, damages of and not the whole amount" (Pilipinas Shell
whatever kind, attorney's fees, litigation Petroleum Corp., et als., vs. Court of
expenses, and costs, or the stated value of Appeals, et als., G.R. No. 76119, April 10,
the property in litigation." Respondent's and 1989).32 (Emphasis and underscoring
the Court of Appeals' reliance then supplied)
on Tacay was not in order.
Respecting the Court of Appeals' conclusion
Neither was, for the same reason, the Court that the clerk of court did not err when he
of Appeals' reliance on the 1989 case of Ng applied the exchange rate of US $1 =
Soon v. Alday,30 where this Court held: ₱43.00 "[i]n the absence of any office guide
of the rate of exchange which said court
…The failure to state the rate of interest functionary was duty bound to follow,
demanded was not fatal not only because [hence,] the rate he applied is presumptively
it is the Courts which ultimately fix the correct," the same does not lie. The
same, but also because Rule 141, Section presumption of regularity of the clerk of
5(a) of the Rules of Court, itemizing the
court's application of the exchange rate is
not conclusive.33 It is disputable.34 As such,
the presumption may be overturned by the
requisite rebutting evidence.35 In the case at
bar, petitioners have adequately proven with
documentary evidence36 that the exchange
rate when the complaint was filed on
September 7, 1998 was US $1 = ₱43.21.
In fine, the docket fees paid by respondent
were insufficient.
With respect to petitioner's argument that
the trial court did not acquire jurisdiction
over the case in light of the insufficient
docket fees, the same does not lie.
True, in Manchester Development
Corporation v. Court of Appeals,37 this Court
held that the court acquires jurisdiction over
any case only upon the payment of the
prescribed docket fees,38 hence, it
concluded that the trial court did not acquire
jurisdiction over the case.
It bears emphasis, however, that the ruling
in Manchester was clarified in Sun
Insurance Office, Ltd. (SIOL) v.
Asuncion39 when this Court held that in the
former there was clearly an effort to defraud
the government in avoiding to pay the
correct docket fees, whereas in the latter
the plaintiff demonstrated his willingness to
abide by paying the additional fees as
required.
The principle in Manchester could very well
be applied in the present case. The pattern
and the intent to defraud the government of
the docket fee due it is obvious not only in
the filing of the original complaint but also in
the filing of the second amended complaint.
However, in Manchester, petitioner did not
pay any additional docket fee until the case
was decided by this Court on May 7,
1987. Thus, in Manchester, due to the
fraud committed on the government, this
Court held that the court a quo did not
acquire jurisdiction over the case and
that the amended complaint could not
have been admitted inasmuch as the
original complaint was null and void.
In the present case, a more liberal
interpretation of the rules is called for
considering
that, unlike Manchester, private
respondent demonstrated his
willingness to abide by the rules by
paying the additional docket fees as
required. The promulgation of the decision
in Manchester must have had that sobering
influence on private respondent who thus
paid the additional docket fee as ordered by
the respondent court. It triggered his change
of stance by manifesting his willingness to
pay such additional docket fee as may be
ordered.
Nevertheless, petitioners contend that the
docket fee that was paid is still insufficient
considering the total amount of the claim.
This is a matter which the clerk of court of
the lower court and/or his duly authorized
docket clerk or clerk in charge should
determine and, thereafter, if any amount is
found due, he must require the private
respondent to pay the same.
Thus, the Court rules as follows:
1. 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
reglementary period.
2. The same rule applies to
permissive counterclaims, third-party
claims and similar pleadings, which
shall not be considered filed until
and unless the filing fee prescribed
therefor is paid. The court may also
allow payment of said fee within a
reasonable time but also in no case
beyond its applicable prescriptive or
reglementary period.
3. Where the trial court acquires
jurisdiction over a claim by the filing
of the appropriate pleading and
payment of the prescribed filing fee
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
therefor 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.40 (Emphasis and
underscoring supplied)
The ruling in Sun Insurance Office was
echoed in the 2005 case of Heirs of
Bertuldo Hinog v. Hon. Achilles Melicor:41
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. (Emphasis and underscoring
supplied; citations omitted)
In the case at bar, respondent merely relied
on the assessment made by the clerk of
court which turned out to be incorrect.
Under the circumstances, the clerk of court
has the responsibility of reassessing what
respondent must pay within the prescriptive
period, failing which the complaint merits
dismissal.
Parenthetically, in the complaint,
respondent prayed for "accrued interest…
subsequent to August 15, 1998 until fully
paid." The complaint having been filed on
September 7, 1998, respondent's claim
includes the interest from August 16, 1998
until such date of filing.
Respondent did not, however, pay the filing
fee corresponding to its claim for interest
from August 16, 1998 until the filing of the
complaint on September 7, 1998. As priorly
discussed, this is required under Rule 141,
as amended by Administrative Circular No.
11-94, which was the rule applicable at the
time. Thus, as the complaint currently
stands, respondent cannot claim the interest
from August 16, 1998 until September 7,
1998, unless respondent is allowed by
motion to amend its complaint within a
reasonable time and specify the precise
amount of interest petitioners owe from
August 16, 1998 to September 7,
199842 and pay the corresponding docket
fee therefor.
With respect to the interest accruing after
the filing of the complaint, the same can
only be determined after a final judgment
has been handed down. Respondent cannot
thus be made to pay the corresponding
docket fee therefor. Pursuant, however, to
Section 2, Rule 141, as amended by
Administrative Circular No. 11-94,
respondent should be made to pay
additional fees which shall constitute a lien
in the event the trial court adjudges that it is
entitled to interest accruing after the filing of
the complaint.
Sec. 2. Fees as lien. - Where the court in its
final judgment awards a claim not alleged,
or a relief different 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.
In Ayala Corporation v. Madayag,43 in
interpreting the third rule laid down in Sun
Insurance regarding awards of claims not
specified in the pleading, this Court held
that the same refers only to damages
arising after the filing of the complaint or
similar pleading as to which the
additional filing fee therefor shall
constitute a lien on the judgment.
… The amount of any claim for damages,
therefore, arising on or before the filing of
the complaint or any pleading should be
specified. While it is true that the
determination of certain damages as
exemplary or corrective damages is left to
the sound discretion of the court, it is the
duty of the parties claiming such damages
to specify the amount sought on the basis of
which the court may make a proper
determination, and for the proper
assessment of the appropriate docket
fees. The exception contemplated as to
claims not specified or to claims
although specified are left for
determination of the court is limited only
to any damages that may arise after the
filing of the complaint or similar pleading
for then it will not be possible for the
claimant to specify nor speculate as to
the amount thereof.44 (Emphasis and
underscoring supplied; citation
omitted)1avvphi1.zw+
WHEREFORE, the petition is GRANTED in
part. The July 25, 2001 Decision and the
December 18, 2001 Resolution of the Court
Appeals are hereby MODIFIED. The Clerk
of Court of the Regional Trial Court of
Makati City is ordered to reassess and
determine the docket fees that should be
paid by respondent, BNP, in accordance
with the Decision of this Court, and direct
respondent to pay the same within fifteen
(15) days, provided the applicable
prescriptive or reglementary period has not
yet expired. Thereafter, the trial court is
ordered to proceed with the case with
utmost dispatch.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice

WE CONCUR:
EN BANC
A.M. No. 08-11-7-SC               August 28,
2009
RE: REQUEST OF NATIONAL
COMMITTEE ON LEGAL AID1 TO
EXEMPT LEGAL AID CLIENTS FROM
PAYING FILING, DOCKET AND OTHER
FEES.
RESOLUTION
CORONA, J.:
On September 23, 2008 the Misamis
Oriental Chapter of the Integrated Bar of the
Philippines (IBP) promulgated Resolution
No. 24, series of 2008.2 The resolution
requested the IBP’s National Committee on
Legal Aid3 (NCLA) to ask for the exemption
from the payment of filing, docket and other
fees of clients of the legal aid offices in the
various IBP chapters. Resolution No. 24,
series of 2008 provided:
RESOLUTION NO. 24, SERIES OF 2008
RESOLUTION OF THE IBP–MISAMIS
ORIENTAL CHAPTER FOR THE IBP
NATIONAL LEGAL AID OFFICE TO
REQUEST THE COURTS AND OTHER
QUASI-JUDICIAL BODIES, THE
PHILIPPINE MEDIATION CENTER AND
PROSECUTOR’S OFFICES TO EXEMPT
LEGAL AID CLIENTS FROM PAYING
FILING, DOCKET AND OTHER FEES
INCIDENTAL TO THE FILING AND
LITIGATION OF ACTIONS, AS ORIGINAL
PROCEEDINGS OR ON APPEAL.
WHEREAS, Section 1, Article I of the
Guidelines Governing the Establishment
and Operation of Legal Aid Offices in All
Chapters of the Integrated Bar of the
Philippines (otherwise known as
["]Guideline[s] on Legal Aid["])
provides: Legal aid is not a matter of
charity. It is a means for the correction of
social imbalances that may often lead to
injustice, for which reason, it is a public
responsibility of the Bar. The spirit of public
service should therefore unde[r]ly all legal
aid offices. The same should be so
administered as to give maximum possible
assistance to indigent and deserving
members of the community in all cases,
matters and situations in which legal aid
may be necessary to forestall injustice.
WHEREAS, Section 2 of the same
provides: In order to attain the objectives of
legal aid, legal aid office should be as close
as possible to those who are in need
thereof – the masses. Hence, every chapter
of the IBP must establish and operate an
adequate legal aid office.
WHEREAS, the Legal Aid Office of the IBP–
Misamis Oriental Chapter has long been
operational, providing free legal services to
numerous indigent clients, through the
chapter’s members who render volunteer
services in the spirit of public service;
WHEREAS, the courts, quasi-judicial
bodies, the various mediation centers and
prosecutor’s offices are collecting fees, be
they filing, docket, motion, mediation or
other fees in cases, be they original
proceedings or on appeal;
WHEREAS, IBP Legal Aid clients are
qualified under the same indigency and
merit tests used by the Public Attorney’s
Office (PAO), and would have qualified for
PAO assistance, but for reasons other than
indigency, are disqualified from availing of
the services of the PAO, like the existence
of a conflict of interests or conflicting
defenses, and other similar causes;
WHEREAS, PAO clients are automatically
exempt from the payment of docket and
other fees for cases, be they original
proceedings or on appeal, by virtue of the
provisions of Section 16–D of R.A. 9406
(PAO Law), without the need for the filing of
any petition or motion to declare them as
pauper litigants;
WHEREAS, there is no similar provision in
any substantive law or procedural law giving
IBP Legal Aid clients the same benefits or
privileges enjoyed by PAO clients with
respect to the payment of docket and other
fees before the courts, quasi-judicial bodies
and prosecutor’s offices;
WHEREAS, the collection of docket and
other fees from the IBP Legal Aid clients
poses an additional strain to their next to
non-existent finances;
WHEREAS, the quarterly allowance given
by the National Legal Aid Office to the IBP
Misamis Oriental Chapter is insufficient to
even cover the incidental expenses of
volunteer legal aid lawyers, much less
answer for the payment of docket and other
fees collected by the courts, quasi-judicial
bodies and prosecutor’s offices and
mediation fees collected by the Philippine
Mediation Center;
NOW THEREFORE, on motion of the Board
of Officers of the IBP–Misamis Oriental
Chapter, be it resolved as it is hereby
resolved, to move the IBP National Legal
Aid Office to make the necessary requests
or representations with the Supreme Court,
the Philippine Mediation Center, the
Department of Justice and the National
Prosecution Service and other quasi-judicial
agencies to effect the grant of a like
exemption from the payment of filing, docket
and other fees to the IBP Legal Aid clients
as that enjoyed by PAO clients, towards the
end that IBP Legal Aid clients be
automatically exempted from the filing of the
abovementioned fees;
RESOLVED FURTHER, that copies of this
Resolution be furnished to Supreme Court
Chief Justice Honorable Reynato S. Puno,
IBP National President Feliciano M.
Bautista, the IBP Board of Governors,
Secretary of Justice Hon. Raul M.
Gonzalez, the National Supervisor of the
Philippine Mediation Center, the National
Labor Relations Commission, the Civil
Service Commission and other quasi-
judicial bodies and their local offices;
RESOLVED FINALLY to move the IBP
Board of Governors and National Officers to
make the necessary representations with
the National Legislature and its members to
effect the filing of a bill before the House of
Representatives and the Senate granting
exemption to IBP Legal Aid clients from the
payment of docket, filing and or other fees
in cases before the courts, quasi-judicial
agencies and prosecutor’s offices and the
mediation centers.
Done this 23rd day of September 2008,
Cagayan De Oro City.
Unanimously approved upon motion
severally seconded.4
The Court noted Resolution No. 24, series
of 2008 and required the IBP, through the
NCLA, to comment thereon.5
In a comment dated December 18,
2008,6 the IBP, through the NCLA, made
the following comments:
At the outset, we laud the Misamis Oriental
Chapter of the IBP for its effort to help
improve the administration of justice,
(a) Under Section 16-D of RA 7 9406,
clients of the Public Attorneys’ Office
(PAO) are exempt from the payment
of docket and other fees incidental to
the institution of action in court and
other quasi-judicial bodies. On the
other hand, clients of legal aid
offices in the various IBP chapters
do not enjoy the same exemption.
IBP’s indigent clients are advised to
litigate as pauper litigants under
Section 21, Rule 3 of the Rules of
Court;
(b) They are further advised to
submit documentary evidence to
prove compliance with the
requirements under Section 21, Rule
3 of the Rules of Court, i.e.,
certifications from the barangay and
the Department of Social Welfare
and Development. However, not
only does the process involve some
expense which indigent clients could
ill-afford, clients also lack knowledge
on how to go about the tedious
process of obtaining these
documents;
(c) Although the IBP is given an
annual legal aid subsidy, the amount
it receives from the government is
barely enough to cover various
operating expenses;8
(d) While each IBP local chapter is
given a quarterly allocation (from the
legal aid subsidy),9 said allocation
covers neither the incidental
expenses defrayed by legal aid
lawyers in handling legal aid cases
nor the payment of docket and other
fees collected by the courts, quasi-
judicial bodies and the prosecutor’s
office, as well as mediation fees and
(e) Considering the aforementioned
factors, a directive may be issued by
the Supreme Court granting IBP’s
indigent clients an exemption from
the payment of docket and other
fees similar to that given to PAO
clients under Section 16-D of RA
9406. In this connection, the
Supreme Court previously issued a
circular exempting IBP clients from
the payment of transcript of
stenographic notes.10
particularly, the access to justice by the
poor. Its Resolution No. 24, series of 2008
in fact echoes one of the noteworthy
recommendations during the Forum on
Increasing Access to Justice spearheaded
by the Court last year. In promulgating
Resolution No. 24, the Misamis Oriental
Chapter of the IBP has effectively
performed its duty to "participate in the
development of the legal system by initiating
or supporting efforts in law reform and in the
administration of justice."11
We now move on to determine the merits of
the request.
Access to Justice:
Making an Ideal a Reality
Access to justice by all, especially by the
poor, is not simply an ideal in our society. Its
existence is essential in a democracy and in
the rule of law. As such, it is guaranteed by
no less than the fundamental law:
Sec. 11. Free access to the courts and
quasi-judicial bodies and adequate legal
assistance shall not be denied to any
person by reason of poverty.12 (emphasis
supplied)
The Court recognizes the right of access to
justice as the most important pillar of legal
empowerment of the marginalized sectors
of our society.13 Among others, it has
exercised its power to "promulgate rules
concerning the protection and enforcement
of constitutional rights"14 to open the doors
of justice to the underprivileged and to allow
them to step inside the courts to be heard of
their plaints. In particular, indigent litigants
are permitted under Section 21, Rule
315 and Section 19, Rule 14116 of the Rules
of Court to bring suits in forma pauperis.
The IBP, pursuant to its general objectives
to "improve the administration of justice and
enable the Bar to discharge its public
responsibility more effectively,"17 assists the
Court in providing the poor access to
justice. In particular, it renders free legal aid
under the supervision of the NCLA.
A New Rule, a New Tool
for Access to Justice
Under the IBP’s Guidelines Governing the
Establishment and Operation of Legal Aid
Offices in All Chapters of the IBP
(Guidelines on Legal Aid), the combined
"means and merit tests" shall be used to
determine the eligibility of an applicant for
legal aid:
ARTICLE VIII
TESTS
SEC. 19. Combined tests. – The Chapter
Legal Aid Committee or the [NCLA], as the
case may be, shall pass upon the request
for legal aid by the combined application of
the means test and merit test, and the
consideration of other factors adverted to in
the following sections.
SEC. 20. Means test. – The means test
aims at determining whether the applicant
has no visible means of support or his
income is otherwise insufficient to provide
the financial resources necessary to engage
competent private counsel owing to the
demands for subsistence of his family,
considering the number of his dependents
and the conditions prevailing in the locality.
The means test shall not be applicable to
applicants who fall under the Developmental
Legal Aid Program such as Overseas
Filipino Workers, fishermen, farmers,
women and children and other
disadvantaged groups.
SEC. 21. Merit test. – The merit test seeks
to ascertain whether or not the applicant’s
cause of action or his defense is valid and
chances of establishing the same appear
reasonable.
SEC. 22. Other factors. – The effect of the
Legal Aid Service or of the failure to render
the same upon the Rule of Law, the proper
administration of justice, the public interest
involved in given cases and the practice of
law in the locality shall likewise be
considered.
SEC. 23. Private practice. – Care shall be
taken that the Legal aid is not availed of to
the detriment of the private practice of law,
or taken advantage of by anyone for
personal ends.
SEC. 24. Denial. – Legal aid may be denied
to an applicant already receiving adequate
assistance from any source other than the
Integrated Bar.
The "means and merit tests" appear to be
reasonable determinants of eligibility for
coverage under the legal aid program of the
IBP. Nonetheless, they may be improved to
ensure that any exemption from the
payment of legal fees that may be granted
to clients of the NCLA and the legal aid
offices of the various IBP chapters will really
further the right of access to justice by the
poor. This will guarantee that the exemption
will neither be abused nor trivialized.
Towards this end, the following shall be
observed by the NCLA and the legal aid
offices in IBP chapters nationwide in
accepting clients and handling cases for the
said clients:
A.M. No. 08-11-7-SC (IRR): Re: Rule on
the Exemption From the Payment of
Legal Fees of the Clients of the National
Committee on Legal Aid and of the Legal
Aid Offices in the Local Chapters of the
Integrated Bar of the Philippines
Rule on the Exemption From the
Payment of Legal Fees of the Clients of
the National Committee on Legal Aid
(NCLA) and of the Legal Aid Offices in
the Local Chapters of the Integrated Bar
of the Philippines (IBP)
ARTICLE I of provisional remedies, mediation
Purpose
Section 1. Purpose. – This Rule is issued
for the purpose of enforcing the right of free
access to courts by the poor guaranteed
under Section 11, Article III of the
Constitution. It is intended to increase the
access to justice by the poor by exempting
from the payment of legal fees incidental to
instituting an action in court, as an original
proceeding or on appeal, qualified indigent
clients of the NCLA and of the legal aid
offices in local IBP chapters nationwide.
ARTICLE II
Definition of Terms
Section 1. Definition of important terms. –
For purposes of this Rule and as used
herein, the following terms shall be
understood to be how they are defined
under this Section:
(a) "Developmental legal aid" means
the rendition of legal services in
public interest causes involving
overseas workers, fisherfolk,
farmers, laborers, indigenous
cultural communities, women,
children and other disadvantaged
groups and marginalized sectors;
(b) "Disinterested person" refers to
the punong barangay having
jurisdiction over the place where an
applicant for legal aid or client of the
NCLA or chapter legal aid office
resides;
(c) "Falsity" refers to any material
misrepresentation of fact or any
fraudulent, deceitful, false, wrong or
misleading statement in the
application or affidavits submitted to
support it or the affidavit of a
disinterested person required to be
submitted annually under this Rule
which may substantially affect the
determination of the qualifications of
the applicant or the client under the
means and merit tests;
(d) "Legal fees" refers to the legal
fees imposed under Rule 141 of the
Rules of Court as a necessary
incident of instituting an action in
court either as an original
proceeding or on appeal. In
particular, it includes filing or docket
fees, appeal fees, fees for issuance
fees, sheriff’s fees, stenographer’s
fees (that is fees for transcript of
stenographic notes) and
commissioner’s fees;
(e) "Means test" refers to the set of
criteria used to determine whether
the applicant is one who has no
money or property sufficient and
available for food, shelter and basic
necessities for himself and his
family;
(f) "Merit test" refers to the
ascertainment of whether the
applicant’s cause of action or his
defense is valid and whether the
chances of establishing the same
appear reasonable and
(g) "Representative" refers to the
person authorized to file an
application for legal aid in behalf of
the applicant when the said
applicant is prevented by a
compelling reason from personally
filing his application. As a rule, it
refers to the immediate family
members of the applicant. However,
it may include any of the applicant’s
relatives or any person or concerned
citizen of sufficient discretion who
has first-hand knowledge of the
personal circumstances of the
 applicant as well as of the facts of
the applicant’s case.
ARTICLE III
Coverage
Section 1. Persons qualified for exemption
from payment of legal fees. – Persons who
shall enjoy the benefit of exemption from the
payment of legal fees incidental to instituting
an action in court, as an original proceeding
or on appeal, granted under this Rule shall
be limited only to clients of the NCLA and
the chapter legal aid offices.
The said clients shall refer to those
indigents qualified to receive free legal aid
service from the NCLA and the chapter
legal aid offices. Their qualifications shall be
determined based on the tests provided in
this Rule.
Section 2. Persons not covered by the Rule.
– The following shall be disqualified from
the coverage of this Rule. Nor may they be
accepted as clients by the NCLA and the
chapter legal aid offices.
(a) Juridical persons; except in
cases covered by developmental
legal aid or public interest causes
involving juridical entities which are
non-stock, non-profit organizations,
non-governmental organizations and
people’s organizations whose
individual members will pass the
means test provided in this Rule;
(b) Persons who do not pass the
means and merit tests;
(c) Parties already represented by a
counsel de parte;
(d) Owners or lessors of residential
lands or buildings with respect to the
filing of collection or unlawful
detainer suits against their tenants
and
(e) Persons who have been clients
of the NCLA or chapter legal aid
office previously in a case where the
NCLA or chapter legal aid office
withdrew its representation because
of a falsity in the application or in
any of the affidavits supporting the
said application.
Section 3. Cases not covered by the Rule. –
The NCLA and the chapter legal aid offices
shall not handle the following:
(a) Cases where conflicting interests
will be represented by the NCLA and
the chapter legal aid offices and
(b) Prosecution of criminal cases in
court.
ARTICLE IV
Tests of Indigency
Section 1. Tests for determining who may
be clients of the NCLA and the legal aid
offices in local IBP chapters. – The NCLA or
the chapter legal aid committee, as the case
may be, shall pass upon requests for legal
aid by the combined application of the
means and merit tests and the
consideration of other relevant factors
provided for in the following sections.
Section 2. Means test; exception. – (a) This
test shall be based on the following criteria:
(i) the applicant and that of his immediate
family must have a gross monthly income
that does not exceed an amount double the
monthly minimum wage of an employee in
the place where the applicant resides and
(ii) he does not own real property with a fair
market value as stated in the current tax
declaration of more than Three Hundred
Thousand (₱300,000.00) Pesos.
In this connection, the applicant shall
execute an affidavit of indigency (printed at
the back of the application form) stating that
he and his immediate family do not earn a
gross income abovementioned, nor own any
real property with the fair value
aforementioned, supported by an affidavit of
a disinterested person attesting to the truth
of the applicant’s affidavit. The latest
income tax return and/or current tax
declaration, if any, shall be attached to the
applicant’s affidavit.
(b) The means test shall not be applicable
to applicants who fall under the
developmental legal aid program such as
overseas workers, fisherfolk, farmers,
laborers, indigenous cultural communities,
women, children and other disadvantaged
groups.
Section 3. Merit test. – A case shall be
considered meritorious if an assessment of
the law and evidence at hand discloses that
the legal service will be in aid of justice or in
the furtherance thereof, taking into
consideration the interests of the party and
those of society. A case fails this test if,
after consideration of the law and evidence
presented by the applicant, it appears that it
is intended merely to harass or injure the
opposite party or to work oppression or
wrong.
Section 4. Other relevant factors that may
be considered. – The effect of legal aid or of
the failure to render the same upon the rule
of law, the proper administration of justice,
the public interest involved in a given case
and the practice of law in the locality shall
likewise be considered.
ARTICLE V up the action on his application after
Acceptance and Handling of Cases
Section 1. Procedure in accepting cases. –
The following procedure shall be observed
in the acceptance of cases for purposes of
this Rule:
(a) Filing of application – An
application shall be made personally
by the applicant, unless there is a
compelling reason which prevents
him from doing so, in which case his
representative may apply for him. It
shall adhere substantially to the form
made for that purpose. It shall be
prepared and signed by the
applicant or, in proper cases, his
duly authorized representative in at
least three copies.
Applications for legal aid shall be
filed with the NCLA or with the
chapter legal aid committee.
The NCLA shall, as much as
possible, concentrate on cases of
paramount importance or national
impact.
Requests received by the IBP
National Office shall be referred by
the NCLA to the proper chapter legal
aid committee of the locality where
the cases have to be filed or are
pending. The chapter president and
the chairman of the chapter’s legal
aid committee shall be advised of
such referral.
(b) Interview – The applicant shall be
interviewed by a member of the
chapter legal aid committee or any
chapter member authorized by the
chapter legal aid committee to
determine the applicant’s
qualifications based on the means
and merit tests and other relevant
factors. He shall also be required to
submit copies of his latest income
tax returns and/or current tax
declaration, if available, and execute
an affidavit of indigency printed at
the back of the application form with
the supporting affidavit of a
disinterested person attesting to the
truth of the applicant’s
affidavit.lawph!l
After the interview, the applicant
shall be informed that he can follow
five (5) working days.
(c) Action on the application – The
chapter legal aid committee shall
pass upon every request for legal
aid and submit its recommendation
to the chapter board of officers
within three (3) working days after
the interview of the applicant. The
basis of the recommendation shall
be stated.
The chapter board of officers shall
review and act on the
recommendation of the chapter legal
aid committee within two (2) working
days from receipt thereof; Provided,
however, that in urgent matters
requiring prompt or immediate
action, the chapter’s executive
director of legal aid or whoever
performs his functions may
provisionally act on the application,
subject to review by the chapter
legal aid committee and, thereafter,
by the chapter board of officers.
The action of the chapter board of
officers on the application shall be
final.
(d) Cases which may be
provisionally accepted. – In the
following cases, the NCLA or the
chapter legal aid office, through the
chapter’s executive director of legal
aid or whoever performs his
functions may accept cases
provisionally pending verification of
the applicant’s indigency and an
evaluation of the merit of his case.
 (i) Where a warrant for the arrest of
the applicant has been issued;
(ii) Where a pleading has to be filed
immediately to avoid adverse effects
to the applicant;
(iii) Where an appeal has to be
urgently perfected or a petition for
certiorari, prohibition or mandamus
filed has to be filed immediately; and
(iv) Other similar urgent cases.
(e) Assignment of control number –
Upon approval of the chapter board
of officers of a person’s application
and the applicant is found to be
qualified for legal assistance, the
case shall be assigned a control
number. The numbering shall be
consecutive starting from January to
December of every year. The control
number shall also indicate the region
and the chapter handling the case.
Example:
Region18 Chapter
GM - Manila -
(f) Issuance of a certification – After
an application is approved and a
control number duly assigned, the
chapter board of officers shall issue
a certification that the person (that
is, the successful applicant) is a
client of the NCLA or of the chapter
legal aid office. The certification shall
bear the control number of the case
and shall state the name of the client
and the nature of the judicial action
subject of the legal aid of the NCLA
or the legal aid office of a local IBP
chapter.
The certification shall be issued to
the successful applicant free of
charge.
Section 2. Assignment of cases. – After a
case is given a control number, the chapter
board of officers shall refer it back to the
chapter legal aid committee. The chapter
legal aid committee shall assign the case to
any chapter member who is willing to
handle the case.
In case no chapter member has signified an
intention to handle the case voluntarily, the
chapter legal aid committee shall refer the
matter to the chapter board of officers
together with the names of at least three
members who, in the chapter legal aid
committee’s discretion, may competently
render legal aid on the matter. The chapter
board of officers shall appoint one chapter
member from among the list of names
submitted by the chapter legal aid
committee. The chapter member chosen
may not refuse the appointment except on
the ground of conflict of interest or other
equally compelling grounds as provided in
the Code of Professional Responsibility, 19 in
which case the chapter board of officers
shall appoint his replacement from among
the remaining names in the list previously
submitted by the chapter legal aid
committee.
The chapter legal aid committee and the
chapter board of officers shall take the
necessary measures to ensure that cases
are well-distributed to chapter members.
Section 3. Policies and guidelines in the
acceptance and handling of cases. – The
following policies and guidelines shall be
observed in the acceptance and handling of
Year cases:
2009 -
(a) First come, first served – Where
both the
complainant/plaintiff/petitioner and
defendant/ respondent apply for
legal aid and both are qualified, the
first to seek assistance shall be
given preference.
(b) Avoidance of conflict of interest –
Where acceptance of a case will
give rise to a conflict of interest on
the part of the chapter legal aid
office, the applicant shall be duly
informed and advised to seek the
services of a private counsel or
another legal aid organization.
Where handling of the case will give
rise to a conflict of interest on the
part of the chapter member assigned
to the case, the client shall be duly
informed and advised about it. The
handling lawyer shall also inform the
chapter legal aid committee so that
another chapter member may be
assigned to handle the case. For
purposes of choosing the substitute
handling lawyer, the rule in the
immediately preceding section shall
be observed.
(c) Legal aid is purely gratuitous and
honorary – No member of the
chapter or member of the staff of the
NCLA or chapter legal aid office
shall directly or indirectly demand or
request from an applicant or client
any compensation, gift or present for
legal aid services being applied for
or rendered.
(d) Same standard of conduct and
equal treatment – A chapter member
who is tasked to handle a case
accepted by the NCLA or by the
chapter legal aid office shall observe
the same standard of conduct
governing his relations with paying
clients. He shall treat the client of the
NCLA or of the chapter legal aid
office and the said client’s case in a
manner that is equal and similar to
his treatment of a paying client and
his case.
(e) Falsity in the application or in the
affidavits – Any falsity in the
application or in the affidavit of
indigency or in the affidavit of a
disinterested person shall be
sufficient cause for the NCLA or
chapter legal aid office to withdraw
or terminate the legal aid. For this
purpose, the chapter board of
officers shall authorize the handling
lawyer to file the proper
manifestation of withdrawal of
appearance of the chapter legal aid
office in the case with a motion for
the dismissal of the complaint or
action of the erring client. The court,
after hearing, shall approve the
withdrawal of appearance and grant
the motion, without prejudice to
whatever criminal liability may have
been incurred.
Violation of this policy shall
disqualify the erring client from
availing of the benefits of this Rule in
the future.
(f) Statement in the initiatory
pleading – To avail of the benefits of
the Rule, the initiatory pleading shall
state as an essential preliminary
allegation that (i) the party initiating
the action is a client of the NCLA or
of the chapter legal aid office and
therefore entitled to exemption from
the payment of legal fees under this
Rule and (ii) a certified true copy of
the certification issued pursuant to
Section 1(e), of this Article is
attached or annexed to the pleading.
Failure to make the statement shall
be a ground for the dismissal of the
action without prejudice to its refiling.
The same rule shall apply in case
the client, through the NCLA or
chapter legal aid office, files an
appeal.
(g) Attachment of certification in
initiatory pleading – A certified true
copy of the certification issued
pursuant to Section 1(e), of this
Article shall be attached as an annex
to the initiatory pleading.
Failure to attach a certified true copy
of the said certification shall be a
ground for the dismissal of the action
without prejudice to its refiling.
The same rule shall apply in case
the client, through the NCLA or
chapter legal aid office, files an
appeal.
(h) Signing of pleadings – All
complaints, petitions, answers,
replies, memoranda and other
important pleadings or motions to be
filed in courts shall be signed by the
handling lawyer and co-signed by
the chairperson or a member of the
chapter legal aid committee, or in
urgent cases, by the executive
director of legal aid or whoever
performs his functions.
Ordinary motions such as motions
for extension of time to file a
pleading or for postponement of
hearing and manifestations may be
signed by the handling lawyer alone.
(i) Motions for extension of time or
for postponement – The filing of
motions for extension of time to file a
pleading or for postponement of
hearing shall be avoided as much as
possible as they cause delay to the
case and prolong the proceedings.
(j) Transfer of cases – Transfer of
cases from one handling lawyer to
another shall be affected only upon
approval of the chapter legal aid
committee.
Section 4. Decision to appeal. – (a) All
appeals must be made on the request of the
client himself. For this purpose, the client
shall be made to fill up a request to appeal.
(b) Only meritorious cases shall be
appealed. If the handling lawyer, in
consultation with the chapter legal aid
committee, finds that there is no merit to the
appeal, the client should be immediately
informed thereof in writing and the record of
the case turned over to him, under proper
receipt. If the client insists on appealing the
case, the lawyer handling the case should
perfect the appeal before turning over the
records of the case to him.
Section 5. Protection of private practice. –
Utmost care shall be taken to ensure that
legal aid is neither availed of to the
detriment of the private practice of law nor
taken advantage of by anyone for purely
personal ends.
ARTICLE VI
Withdrawal of Legal Aid and Termination of
Exemption
Section 1. Withdrawal of legal aid. – The
NCLA or the chapter legal aid committee
may, in justifiable instances as provided in
the next Section, direct the handling lawyer
to withdraw representation of a client’s
cause upon approval of the IBP Board of
Governors (in the case of the NCLA) or of
the chapter board of officers (in the case of
the chapter legal aid committee) and
through a proper motion filed in Court.
Section 2. Grounds for withdrawal of legal
aid. – Withdrawal may be warranted in the
following situations:
(a) In a case that has been
provisionally accepted, where it is
subsequently ascertained that the
client is not qualified for legal aid;
(b) Where the client’s income or
resources improve and he no longer
qualifies for continued assistance
based on the means test. For this
purpose, on or before January 15
every year, the client shall submit an
affidavit of a disinterested person
stating that the client and his
immediate family do not earn a
gross income mentioned in Section
2, Article V, nor own any real
property with the fair market value
mentioned in the same Section;
(c) When it is shown or found that
the client committed a falsity in the
application or in the affidavits
submitted to support the application;
(d) When the client subsequently
engages a de parte counsel or is
provided with a de oficio counsel;
(e) When, despite proper advice
from the handling lawyer, the client
cannot be refrained from doing
things which the lawyer himself
ought not do under the ethics of the
legal profession, particularly with
reference to their conduct towards
courts, judicial officers, witnesses
and litigants, or the client insists on
having control of the trial, theory of
the case, or strategy in procedure
which would tend to result in
incalculable harm to the interests of
the client;
(f) When, despite notice from the
handling lawyer, the client does not
cooperate or coordinate with the
handling lawyer to the prejudice of
the proper and effective rendition of
legal aid such as when the client
fails to provide documents
necessary to support his case or
unreasonably fails to attend hearings
when his presence thereat is
required; and
(g) When it becomes apparent that
the representation of the client’s
cause will result in a representation
of conflicting interests, as where the
adverse party had previously
engaged the services of the NCLA
or of the chapter legal aid office and
the subject matter of the litigation is
directly related to the services
previously rendered to the adverse
party.
Section 3. Effect of withdrawal. – The court,
after hearing, shall allow the NCLA or the
chapter legal aid office to withdraw if it is
satisfied that the ground for such withdrawal
exists.
Except when the withdrawal is based on
paragraphs (b), (d) and (g) of the
immediately preceding Section, the court
shall also order the dismissal of the case.
Such dismissal is without prejudice to
whatever criminal liability may have been
incurred if the withdrawal is based on
paragraph (c) of the immediately preceding
Section.
ARTICLE VII
Miscellaneous Provisions
Section 1. Lien on favorable judgment. –
The amount of the docket and other lawful
fees which the client was exempted from
paying shall be a lien on any judgment
rendered in the case favorable to the
indigent, unless the court otherwise
provides.
In case, attorney’s fees have been awarded
to the client, the same shall belong to the
NCLA or to the chapter legal aid office that
rendered the legal aid, as the case may be.
It shall form part of a special fund which
shall be exclusively used to support the
legal aid program of the NCLA or the
chapter legal aid office. In this connection,
the chapter board of officers shall report the
receipt of attorney’s fees pursuant to this
Section to the NCLA within ten (10) days
from receipt thereof. The NCLA shall, in
turn, include the data on attorney’s fees
received by IBP chapters pursuant to this
Section in its liquidation report for the
annual subsidy for legal aid.1awphi1
Section 2. Duty of NCLA to prepare forms. –
The NCLA shall prepare the standard forms
to be used in connection with this Rule. In
particular, the NCLA shall prepare the
following standard forms: the application
form, the affidavit of indigency, the
supporting affidavit of a disinterested
person, the affidavit of a disinterested
person required to be submitted annually
under Section 2(b), Article VI, the
certification issued by the NCLA or the
chapter board of officers under Section 1(f),
Article V and the request to appeal.
The said forms, except the certification,
shall be in Filipino. Within sixty (60) days
from receipt of the forms from the NCLA,
the chapter legal aid offices shall make
translations of the said forms in the
dominant dialect used in their respective
localities.
Section 3. Effect of Rule on right to bring
suits in forma pauperis. – Nothing in this
Rule shall be considered to preclude those
persons not covered either by this Rule or
by the exemption from the payment of legal
fees granted to clients of the Public
Attorney’s Office under Section 16-D of RA
9406 to litigate in forma pauperis under
Section 21, Rule 3 and Section 19 Rule 141
of the Rules of Court.
Section 4. Compliance with Rule on
Mandatory Legal Aid Service. – Legal aid
service rendered by a lawyer under this
Rule either as a handling lawyer or as an
interviewer of applicants under Section 1(b),
Article IV hereof shall be credited for
purposes of compliance with the Rule on
Mandatory Legal Aid Service.
The chairperson of the chapter legal aid
office shall issue the certificate similar to
that issued by the Clerk of Court in Section
5(b) of the Rule on Mandatory Legal Aid
Service.
ARTICLE VIII
Effectivity
Section 1. Effectivity. – This Rule shall
become effective after fifteen days following
its publication in a newspaper of general
circulation.
The above rule, in conjunction with Section
21, Rule 3 and Section 19, Rule 141 of the
Rules of Court, the Rule on Mandatory
Legal Aid Service and the Rule of
Procedure for Small Claims Cases, shall
form a solid base of rules upon which the
right of access to courts by the poor shall be
implemented. With these rules, we equip
the poor with the tools to effectively,
efficiently and easily enforce their rights in
the judicial system.
A Final Word
Equity will not suffer a wrong to be without a
remedy. Ubi jus ibi remedium. Where
there is a right, there must be a remedy.
The remedy must not only be effective and
efficient, but also readily accessible. For a
remedy that is inaccessible is no remedy at
all.
The Constitution guarantees the rights of
the poor to free access to the courts and to
adequate legal assistance. The legal aid
service rendered by the NCLA and legal aid
offices of IBP chapters nationwide
addresses only the right to adequate legal
assistance. Recipients of the service of the
NCLA and legal aid offices of IBP chapters
may enjoy free access to courts by
exempting them from the payment of fees
assessed in connection with the filing of a
complaint or action in court. With these twin
initiatives, the guarantee of Section 11,
Article III of Constitution is advanced and
access to justice is increased by bridging a
significant gap and removing a major
roadblock.

WHEREFORE, the Misamis Oriental

Chapter of the Integrated Bar of the
Philippines is hereby COMMENDED for
helping increase the access to justice by the
poor. The request of the Misamis Oriental
Chapter for the exemption from the payment
of filing, docket and other fees of the clients
of the legal aid offices of the various IBP
chapters is GRANTED. The Rule on the
Exemption From the Payment of Legal Fees
of the Clients of the National Committee on
Legal Aid (NCLA) and of the Legal Aid
Offices in the Local Chapters of the
Integrated Bar of the Philippines (IBP)
(which shall be assigned the docket number
A.M. No. 08-11-7-SC [IRR] provided in this
resolution is hereby APPROVED. In this
connection, the Clerk of Court
is DIRECTED to cause the publication of
the said rule in a newspaper of general
circulation within five days from the
promulgation of this resolution.

The Office of the Court Administrator is

hereby directed to promptly issue a circular
to inform all courts in the Philippines of the
import of this resolution.

SO ORDERED.
EN BANC
A. M. No. 09-6-9-SC               August 19,
2009
RE: Query (Question) of Mr. Roger C.
Prioreschi Re Exemption from Legal and
Filing Fees of the Good Shepherd
Foundation, Inc.
RESOLUTION
BERSAMIN, J.:
In his letter dated May 22, 2009 addressed
to the Chief Justice, Mr. Roger C.
Prioreschi, administrator of the Good
Shepherd Foundation, Inc., wrote:
The Good Shepherd Foundation, Inc. is
very grateful for your 1rst. Indorsement to
pay a nominal fee of Php 5,000.00 and the
balance upon the collection action of 10
million pesos, thus giving us access to
the Justice System previously denied by an
up-front excessive court fee.
The Hon. Court Administrator Jose Perez
pointed out to the need of complying with
OCA Circular No. 42-2005 and Rule 141
that reserves this "privilege" to indigent
persons. While judges are appointed to
interpret the law, this type of law seems to
be extremely detailed with requirements that
do not leave much room for interpretations.
In addition, this law deals mainly with
"individual indigent" and it does not include
Foundations or Associations that work with
and for the most Indigent persons. As seen
in our Article of Incorporation, since 1985
the Good Shepherd Foundation, Inc.
reached-out to the poorest among the poor,
to the newly born and abandoned babies, to
children who never saw the smile of their
mother, to old people who cannot afford a
few pesos to pay for "common
prescriptions", to broken families who
returned to a normal life. In other words, we
have been working hard for the very Filipino
people, that the Government and the
society cannot reach to, or have rejected or
abandoned them.
Can the Courts grant to our Foundation who
works for indigent and underprivileged
people, the same option granted to indigent
people?
The two Executive Judges, that we have
approached, fear accusations of favoritism
or other kind of attack if they approve
something which is not clearly and
specifically stated in the law or approved by
your HONOR.
Can your Honor help us once more?
Grateful for your understanding, God bless
you and your undertakings.
We shall be privileged if you find time to visit
our orphanage – the Home of Love – and
the Spiritual Retreat Center in Antipolo City.
To answer the query of Mr. Prioreschi, the
Courts cannot grant to foundations like the
Good Shepherd Foundation, Inc. the same
exemption from payment of legal fees
granted to indigent litigants even if the
foundations are working for indigent and
underprivileged people.
The basis for the exemption from legal and
filing fees is the free access clause,
embodied in Sec. 11, Art. III of the 1987
Constitution, thus:
Sec. 11. Free access to the courts and
quasi judicial bodies and adequate legal
assistance shall not be denied to any
person by reason of poverty.
The importance of the right to free access to
the courts and quasi judicial bodies and to
adequate legal assistance cannot be
denied. A move to remove the provision on
free access from the Constitution on the
ground that it was already covered by the
equal protection clause was defeated by the
desire to give constitutional stature to such
specific protection of the poor.1
In implementation of the right of free access
under the Constitution, the Supreme Court
promulgated rules, specifically, Sec. 21,
Rule 3, Rules of Court,2 and Sec. 19, Rule
141, Rules of Court,3 which respectively
state thus:
Sec. 21. Indigent party. — A party may be
authorized to litigate his action, claim or
defense as an indigent if the court, upon an
ex parte application and hearing, is satisfied
that the party is one who has no money or
property sufficient and available for food,
shelter and basic necessities for himself and
his family.
Such authority shall include an exemption
from payment of docket and other lawful
fees, and of transcripts of stenographic
notes which the court may order to be
furnished him. The amount of the docket
and other lawful fees which the indigent was
exempted from paying shall be a lien on any
judgment rendered in the case favorable to
the indigent, unless the court otherwise
provides.
Any adverse party may contest the grant of
such authority at any time before judgment
is rendered by the trial court. If the court
should determine after hearing that the
party declared as an indigent is in fact a
person with sufficient income or property,
the proper docket and other lawful fees shall
be assessed and collected by the clerk of
court. If payment is not made within the time
fixed by the court, execution shall issue for
the payment thereof, without prejudice to
such other sanctions as the court may
impose. (22a)1avvphi1
Sec. 19. Indigent litigants exempt from
payment of legal fees.– Indigent litigants (a)
whose gross income and that of their
immediate family do not exceed an amount
double the monthly minimum wage of an
employee and (b) who do not own real
property with a fair market value as stated in
the current tax declaration of more than
three hundred thousand (P300,000.00)
pesos shall be exempt from payment of
legal fees.
The legal fees shall be a lien on any
judgment rendered in the case favorable to
the indigent litigant unless the court
otherwise provides.
To be entitled to the exemption herein
provided, the litigant shall execute an
affidavit that he and his immediate family do
not earn a gross income abovementioned,
and they do not own any real property with
the fair value aforementioned, supported by
an affidavit of a disinterested person
attesting to the truth of the litigant’s affidavit.
The current tax declaration, if any, shall be
attached to the litigant’s affidavit.
Any falsity in the affidavit of litigant or
disinterested person shall be sufficient
cause to dismiss the complaint or action or
to strike out the pleading of that party,
without prejudice to whatever criminal
liability may have been incurred.
The clear intent and precise language of the
aforequoted provisions of the Rules of Court
indicate that only a natural party litigant
may be regarded as an indigent litigant.
The Good Shepherd Foundation, Inc., being
a corporation invested by the State with a
juridical personality separate and distinct
from that of its members,4 is a juridical
person. Among others, it has the power to
acquire and possess property of all kinds as
well as incur obligations and bring civil or
criminal actions, in conformity with the laws
and regulations of their organization.5 As a
juridical person, therefore, it cannot be
accorded the exemption from legal and filing
fees granted to indigent litigants.
That the Good Shepherd Foundation, Inc. is
working for indigent and underprivileged
people is of no moment. Clearly, the
Constitution has explicitly premised the free
access clause on a person’s poverty, a
condition that only a natural person can
suffer.
There are other reasons that warrant the
rejection of the request for exemption in
favor of a juridical person. For one,
extending the exemption to a juridical
person on the ground that it works for
indigent and underprivileged people may be
prone to abuse (even with the imposition of
rigid documentation requirements),
particularly by corporations and entities bent
on circumventing the rule on payment of the
fees. Also, the scrutiny of compliance with
the documentation requirements may prove
too time-consuming and wasteful for the
courts.
In view of the foregoing, the Good Shepherd
Foundation, Inc. cannot be extended the
exemption from legal and filing fees despite
its working for indigent and underprivileged
people.
SO ORDERED.