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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-11390

March 26, 1918

EL BANCO ESPAOL-FILIPINO, plaintiff-appellant,


vs.
VICENTE PALANCA, administrator of the estate of
Engracio Palanca Tanquinyeng, defendant-appellant.

Aitken and DeSelms for appellant.


Hartigan and Welch for appellee.
STREET, J.:
This action was instituted upon March 31, 1908, by "El Banco
Espanol-Filipino" to foreclose a mortgage upon various parcels of
real property situated in the city of Manila. The mortgage in
question is dated June 16, 1906, and was executed by the
original defendant herein, Engracio Palanca Tanquinyeng y
Limquingco, as security for a debt owing by him to the bank.
Upon March 31, 1906, the debt amounted to P218,294.10 and
was drawing interest at the rate of 8 per centum per annum,
payable at the end of each quarter. It appears that the parties to
this mortgage at that time estimated the value of the property in
question at P292,558, which was about P75,000 in excess of the
indebtedness. After the execution of this instrument by the
mortgagor, he returned to China which appears to have been his
native country; and he there died, upon January 29, 1810,
without again returning to the Philippine Islands.
As the defendant was a nonresident at the time of the institution
of the present action, it was necessary for the plaintiff in the
foreclosure proceeding to give notice to the defendant by
publication pursuant to section 399 of the Code of Civil
Procedure. An order for publication was accordingly obtained
from the court, and publication was made in due form in a
newspaper of the city of Manila. At the same time that the order
of the court should deposit in the post office in a stamped
envelope a copy of the summons and complaint directed to the
defendant at his last place of residence, to wit, the city of Amoy,
in the Empire of China. This order was made pursuant to the
following provision contained in section 399 of the Code of Civil
Procedure:
In case of publication, where the residence of a
nonresident or absent defendant is known, the judge
must direct a copy of the summons and complaint to
be forthwith deposited by the clerk in the post-office,
postage prepaid, directed to the person to be served,
at his place of residence
Whether the clerk complied with this order does not affirmatively
appear. There is, however, among the papers pertaining to this
case, an affidavit, dated April 4, 1908, signed by Bernardo Chan
y Garcia, an employee of the attorneys of the bank, showing
that upon that date he had deposited in the Manila post-office a
registered letter, addressed to Engracio Palanca Tanquinyeng, at
Manila, containing copies of the complaint, the plaintiff's
affidavit, the summons, and the order of the court directing
publication as aforesaid. It appears from the postmaster's
receipt that Bernardo probably used an envelope obtained from

CIVIL PROCEDURE

the clerk's office, as the receipt purports to show that the letter
emanated from the office.
The cause proceeded in usual course in the Court of First
Instance; and the defendant not having appeared, judgment
was, upon July 2, 1908, taken against him by default. Upon July
3, 1908, a decision was rendered in favor of the plaintiff. In this
decision it was recited that publication had been properly made
in a periodical, but nothing was said about this notice having
been given mail. The court, upon this occasion, found that the
indebtedness of the defendant amounted to P249,355. 32, with
interest from March 31, 1908. Accordingly it was ordered that
the defendant should, on or before July 6, 1908, deliver said
amount to the clerk of the court to be applied to the satisfaction
of the judgment, and it was declared that in case of the failure
of the defendant to satisfy the judgment within such period, the
mortgage property located in the city of Manila should be
exposed to public sale. The payment contemplated in said order
was never made; and upon July 8, 1908, the court ordered the
sale of the property. The sale took place upon July 30, 1908,
and the property was bought in by the bank for the sum of
P110,200. Upon August 7, 1908, this sale was confirmed by the
court.
About seven years after the confirmation of this sale, or to the
precise, upon June 25, 1915, a motion was made in this cause
by Vicente Palanca, as administrator of the estate of the original
defendant, Engracio Palanca Tanquinyeng y Limquingco,
wherein the applicant requested the court to set aside the order
of default of July 2, 1908, and the judgment rendered upon July
3, 1908, and to vacate all the proceedings subsequent thereto.
The basis of this application, as set forth in the motion itself,
was that the order of default and the judgment rendered
thereon were void because the court had never acquired
jurisdiction over the defendant or over the subject of the action.
At the hearing in the court below the application to vacate the
judgment was denied, and from this action of the court Vicente
Planca, as administrator of the estate of the original defendant,
has appealed. No other feature of the case is here under
consideration than such as related to the action of the court
upon said motion.
The case presents several questions of importance, which will be
discussed in what appears to be the sequence of most
convenient development. In the first part of this opinion we
shall, for the purpose of argument, assume that the clerk of the
Court of First Instance did not obey the order of the court in the
matter of mailing the papers which he was directed to send to
the defendant in Amoy; and in this connection we shall consider,
first, whether the court acquired the necessary jurisdiction to
enable it to proceed with the foreclosure of the mortgage and,
secondly, whether those proceedings were conducted in such
manner as to constitute due process of law.
The word "jurisdiction," as applied to the faculty of exercising
judicial power, is used in several different, though related,
senses since it may have reference (1) to the authority of the
court to entertain a particular kind of action or to administer a
particular kind of relief, or it may refer to the power of the court
over the parties, or (2) over the property which is the subject to
the litigation.
The sovereign authority which organizes a court determines the
nature and extent of its powers in general and thus fixes its
competency or jurisdiction with reference to the actions which it
may entertain and the relief it may grant.

AGUSTIN, E. P. | 1

Jurisdiction over the person is acquired by the voluntary


appearance of a party in court and his submission to its
authority, or it is acquired by the coercive power of legal process
exerted over the person.
Jurisdiction over the property which is the subject of the
litigation may result either from a seizure of the property under
legal process, whereby it is brought into the actual custody of
the law, or it may result from the institution of legal proceedings
wherein, under special provisions of law, the power of the court
over the property is recognized and made effective. In the latter
case the property, though at all times within the potential power
of the court, may never be taken into actual custody at all. An
illustration of the jurisdiction acquired by actual seizure is found
in attachment proceedings, where the property is seized at the
beginning of the action, or some subsequent stage of its
progress, and held to abide the final event of the litigation. An
illustration of what we term potential jurisdiction over the res, is
found in the proceeding to register the title of land under our
system for the registration of land. Here the court, without
taking actual physical control over the property assumes, at the
instance of some person claiming to be owner, to exercise a
jurisdiction in rem over the property and to adjudicate the title in
favor of the petitioner against all the world.
In the terminology of American law the action to foreclose a
mortgage is said to be a proceeding quasi in rem, by which is
expressed the idea that while it is not strictly speaking an action
in rem yet it partakes of that nature and is substantially such.
The expression "action in rem" is, in its narrow application, used
only with reference to certain proceedings in courts of admiralty
wherein the property alone is treated as responsible for the
claim or obligation upon which the proceedings are based. The
action quasi rem differs from the true action in rem in the
circumstance that in the former an individual is named as
defendant, and the purpose of the proceeding is to subject his
interest therein to the obligation or lien burdening the property.
All proceedings having for their sole object the sale or other
disposition of the property of the defendant, whether by
attachment, foreclosure, or other form of remedy, are in a
general way thus designated. The judgment entered in these
proceedings is conclusive only between the parties.
In speaking of the proceeding to foreclose a mortgage the
author of a well known treaties, has said:
Though nominally against person, such suits are to
vindicate liens; they proceed upon seizure; they treat
property as primarily indebted; and, with the
qualification above-mentioned, they are substantially
property actions. In the civil law, they are styled
hypothecary actions, and their sole object is the
enforcement of the lien against the res; in the
common law, they would be different in chancery did
not treat the conditional conveyance as a mere
hypothecation, and the creditor's right ass an
equitable lien; so, in both, the suit is real action so far
as it is against property, and seeks the judicial
recognition of a property debt, and an order for the
sale of the res. (Waples, Proceedings In Rem. sec.
607.)
It is true that in proceedings of this character, if the defendant
for whom publication is made appears, the action becomes as to
him a personal action and is conducted as such. This, however,
does not affect the proposition that where the defendant fails to
appear the action is quasi in rem; and it should therefore be

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considered with reference to the principles governing actions in


rem.
There is an instructive analogy between the foreclosure
proceeding and an action of attachment, concerning which the
Supreme Court of the United States has used the following
language:
If the defendant appears, the cause becomes mainly
a suit in personam, with the added incident, that the
property attached remains liable, under the control of
the court, to answer to any demand which may be
established against the defendant by the final
judgment of the court. But, if there is no appearance
of the defendant, and no service of process on him,
the case becomes, in its essential nature, a
proceeding in rem, the only effect of which is to
subject the property attached to the payment of the
defendant which the court may find to be due to the
plaintiff. (Cooper vs. Reynolds, 10 Wall., 308.)
In an ordinary attachment proceeding, if the defendant is not
personally served, the preliminary seizure is to, be considered
necessary in order to confer jurisdiction upon the court. In this
case the lien on the property is acquired by the seizure; and the
purpose of the proceedings is to subject the property to that
lien. If a lien already exists, whether created by mortgage,
contract, or statute, the preliminary seizure is not necessary;
and the court proceeds to enforce such lien in the manner
provided by law precisely as though the property had been
seized upon attachment. (Roller vs. Holly, 176 U. S., 398, 405;
44 L. ed., 520.) It results that the mere circumstance that in an
attachment the property may be seized at the inception of the
proceedings, while in the foreclosure suit it is not taken into
legal custody until the time comes for the sale, does not
materially affect the fundamental principle involved in both
cases, which is that the court is here exercising a jurisdiction
over the property in a proceeding directed essentially in rem.
Passing now to a consideration of the jurisdiction of the Court of
First Instance in a mortgage foreclosure, it is evident that the
court derives its authority to entertain the action primarily from
the statutes organizing the court. The jurisdiction of the court, in
this most general sense, over the cause of action is obvious and
requires no comment. Jurisdiction over the person of the
defendant, if acquired at all in such an action, is obtained by the
voluntary submission of the defendant or by the personal service
of process upon him within the territory where the process is
valid. If, however, the defendant is a nonresident and, remaining
beyond the range of the personal process of the court, refuses
to come in voluntarily, the court never acquires jurisdiction over
the person at all. Here the property itself is in fact the sole thing
which is impleaded and is the responsible object which is the
subject of the exercise of judicial power. It follows that the
jurisdiction of the court in such case is based exclusively on the
power which, under the law, it possesses over the property; and
any discussion relative to the jurisdiction of the court over the
person of the defendant is entirely apart from the case. The
jurisdiction of the court over the property, considered as the
exclusive object of such action, is evidently based upon the
following conditions and considerations, namely: (1) that the
property is located within the district; (2) that the purpose of the
litigation is to subject the property by sale to an obligation fixed
upon it by the mortgage; and (3) that the court at a proper
stage of the proceedings takes the property into custody, if
necessary, and expose it to sale for the purpose of satisfying the
mortgage debt. An obvious corollary is that no other relief can
be granted in this proceeding than such as can be enforced
against the property.

AGUSTIN, E. P. | 2

We may then, from what has been stated, formulated the


following proposition relative to the foreclosure proceeding
against the property of a nonresident mortgagor who fails to
come in and submit himself personally to the jurisdiction of the
court: (I) That the jurisdiction of the court is derived from the
power which it possesses over the property; (II) that jurisdiction
over the person is not acquired and is nonessential; (III) that
the relief granted by the court must be limited to such as can be
enforced against the property itself.
It is important that the bearing of these propositions be clearly
apprehended, for there are many expressions in the American
reports from which it might be inferred that the court acquires
personal jurisdiction over the person of the defendant by
publication and notice; but such is not the case. In truth the
proposition that jurisdiction over the person of a nonresident
cannot be acquired by publication and notice was never clearly
understood even in the American courts until after the decision
had been rendered by the Supreme Court of the United States in
the leading case of Pennoyer vs. Neff (95 U. S. 714; 24 L. ed.,
565). In the light of that decision, and of other decisions which
have subsequently been rendered in that and other courts, the
proposition that jurisdiction over the person cannot be thus
acquired by publication and notice is no longer open to question;
and it is now fully established that a personal judgment upon
constructive or substituted service against a nonresident who
does not appear is wholly invalid. This doctrine applies to all
kinds of constructive or substituted process, including service by
publication and personal service outside of the jurisdiction in
which the judgment is rendered; and the only exception seems
to be found in the case where the nonresident defendant has
expressly or impliedly consented to the mode of service. (Note to
Raher vs. Raher, 35 L. R. A. [N. S. ], 292; see also 50 L .R. A.,
585; 35 L. R. A. [N. S.], 312
The idea upon which the decision in Pennoyer vs. Neff (supra)
proceeds is that the process from the tribunals of one State
cannot run into other States or countries and that due process of
law requires that the defendant shall be brought under the
power of the court by service of process within the State, or by
his voluntary appearance, in order to authorize the court to pass
upon the question of his personal liability. The doctrine
established by the Supreme Court of the United States on this
point, being based upon the constitutional conception of due
process of law, is binding upon the courts of the Philippine
Islands. Involved in this decision is the principle that in
proceedings in rem or quasi in rem against a nonresident who is
not served personally within the state, and who does not appear,
the relief must be confined to the res, and the court cannot
lawfully render a personal judgment against him. (Dewey vs.
Des Moines, 173 U. S., 193; 43 L. ed., 665; Heidritter vs.
Elizabeth Oil Cloth Co., 112 U. S., 294; 28 L. ed., 729.)
Therefore in an action to foreclose a mortgage against a
nonresident, upon whom service has been effected exclusively
by publication, no personal judgment for the deficiency can be
entered. (Latta vs. Tutton, 122 Cal., 279; Blumberg vs. Birch, 99
Cal., 416.)
It is suggested in the brief of the appellant that the judgment
entered in the court below offends against the principle just
stated and that this judgment is void because the court in fact
entered a personal judgment against the absent debtor for the
full amount of the indebtedness secured by the mortgage. We
do not so interpret the judgment.
In a foreclosure proceeding against a nonresident owner it is
necessary for the court, as in all cases of foreclosure, to
ascertain the amount due, as prescribed in section 256 of the
Code of Civil Procedure, and to make an order requiring the

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defendant to pay the money into court. This step is a necessary


precursor of the order of sale. In the present case the judgment
which was entered contains the following words:
Because it is declared that the said defendant
Engracio Palanca Tanquinyeng y Limquingco, is
indebted in the amount of P249,355.32, plus the
interest, to the 'Banco Espanol-Filipino' . . . therefore
said appellant is ordered to deliver the above amount
etc., etc.
This is not the language of a personal judgment. Instead it is
clearly intended merely as a compliance with the requirement
that the amount due shall be ascertained and that the evidence
of this it may be observed that according to the Code of Civil
Procedure a personal judgment against the debtor for the
deficiency is not to be rendered until after the property has been
sold and the proceeds applied to the mortgage debt. (sec. 260).
The conclusion upon this phase of the case is that whatever may
be the effect in other respects of the failure of the clerk of the
Court of First Instance to mail the proper papers to the
defendant in Amoy, China, such irregularity could in no wise
impair or defeat the jurisdiction of the court, for in our opinion
that jurisdiction rest upon a basis much more secure than would
be supplied by any form of notice that could be given to a
resident of a foreign country.
Before leaving this branch of the case, we wish to observe that
we are fully aware that many reported cases can be cited in
which it is assumed that the question of the sufficiency of
publication or notice in a case of this kind is a question affecting
the jurisdiction of the court, and the court is sometimes said to
acquire jurisdiction by virtue of the publication. This phraseology
was undoubtedly originally adopted by the court because of the
analogy between service by the publication and personal service
of process upon the defendant; and, as has already been
suggested, prior to the decision of Pennoyer vs. Neff (supra) the
difference between the legal effects of the two forms of service
was obscure. It is accordingly not surprising that the modes of
expression which had already been molded into legal tradition
before that case was decided have been brought down to the
present day. But it is clear that the legal principle here involved
is not effected by the peculiar language in which the courts have
expounded their ideas.
We now proceed to a discussion of the question whether the
supposed irregularity in the proceedings was of such gravity as
to amount to a denial of that "due process of law" which was
secured by the Act of Congress in force in these Islands at the
time this mortgage was foreclosed. (Act of July 1, 1902, sec. 5.)
In dealing with questions involving the application of the
constitutional provisions relating to due process of law the
Supreme Court of the United States has refrained from
attempting to define with precision the meaning of that
expression, the reason being that the idea expressed therein is
applicable under so many diverse conditions as to make any
attempt ay precise definition hazardous and unprofitable. As
applied to a judicial proceeding, however, it may be laid down
with certainty that the requirement of due process is satisfied if
the following conditions are present, namely; (1) There must be
a court or tribunal clothed with judicial power to hear and
determine the matter before it; (2) jurisdiction must be lawfully
acquired over the person of the defendant or over the property
which is the subject of the proceeding; (3) the defendant must
be given an opportunity to be heard; and (4) judgment must be
rendered upon lawful hearing.

AGUSTIN, E. P. | 3

Passing at once to the requisite that the defendant shall have an


opportunity to be heard, we observe that in a foreclosure case
some notification of the proceedings to the nonresident owner,
prescribing the time within which appearance must be made, is
everywhere recognized as essential. To answer this necessity the
statutes generally provide for publication, and usually in addition
thereto, for the mailing of notice to the defendant, if his
residence is known. Though commonly called constructive, or
substituted service of process in any true sense. It is merely a
means provided by law whereby the owner may be admonished
that his property is the subject of judicial proceedings and that it
is incumbent upon him to take such steps as he sees fit to
protect it. In speaking of notice of this character a distinguish
master of constitutional law has used the following language:
. . . if the owners are named in the proceedings, and
personal notice is provided for, it is rather from
tenderness to their interests, and in order to make
sure that the opportunity for a hearing shall not be
lost to them, than from any necessity that the case
shall assume that form. (Cooley on Taxation [2d.
ed.], 527, quoted in Leigh vs. Green, 193 U. S., 79,
80.)
It will be observed that this mode of notification does not involve
any absolute assurance that the absent owner shall thereby
receive actual notice. The periodical containing the publication
may never in fact come to his hands, and the chances that he
should discover the notice may often be very slight. Even where
notice is sent by mail the probability of his receiving it, though
much increased, is dependent upon the correctness of the
address to which it is forwarded as well as upon the regularity
and security of the mail service. It will be noted, furthermore,
that the provision of our law relative to the mailing of notice
does not absolutely require the mailing of notice unconditionally
and in every event, but only in the case where the defendant's
residence is known. In the light of all these facts, it is evident
that actual notice to the defendant in cases of this kind is not,
under the law, to be considered absolutely necessary.
The idea upon which the law proceeds in recognizing the
efficacy of a means of notification which may fall short of actual
notice is apparently this: Property is always assumed to be in the
possession of its owner, in person or by agent; and he may be
safely held, under certain conditions, to be affected with
knowledge that proceedings have been instituted for its
condemnation and sale.
It is the duty of the owner of real estate, who is a
nonresident, to take measures that in some way he
shall be represented when his property is called into
requisition, and if he fails to do this, and fails to get
notice by the ordinary publications which have usually
been required in such cases, it is his misfortune, and
he must abide the consequences. (6 R. C. L., sec. 445
[p. 450]).
It has been well said by an American court:
If property of a nonresident cannot be reached by
legal process upon the constructive notice, then our
statutes were passed in vain, and are mere empty
legislative declarations, without either force, or
meaning; for if the person is not within the
jurisdiction of the court, no personal judgment can be
rendered, and if the judgment cannot operate upon
the property, then no effective judgment at all can be
rendered, so that the result would be that the courts

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would be powerless to assist a citizen against a


nonresident. Such a result would be a deplorable one.
(Quarl vs. Abbett, 102 Ind., 233; 52 Am. Rep., 662,
667.)
It is, of course universally recognized that the statutory
provisions relative to publication or other form of notice against
a nonresident owner should be complied with; and in respect to
the publication of notice in the newspaper it may be stated that
strict compliance with the requirements of the law has been held
to be essential. In Guaranty Trust etc. Co. vs. Green Cove etc.,
Railroad Co. (139 U. S., 137, 138), it was held that where
newspaper publication was made for 19 weeks, when the statute
required 20, the publication was insufficient.
With respect to the provisions of our own statute, relative to the
sending of notice by mail, the requirement is that the judge shall
direct that the notice be deposited in the mail by the clerk of the
court, and it is not in terms declared that the notice must be
deposited in the mail. We consider this to be of some
significance; and it seems to us that, having due regard to the
principles upon which the giving of such notice is required, the
absent owner of the mortgaged property must, so far as the due
process of law is concerned, take the risk incident to the possible
failure of the clerk to perform his duty, somewhat as he takes
the risk that the mail clerk or the mail carrier might possibly lose
or destroy the parcel or envelope containing the notice before it
should reach its destination and be delivered to him. This idea
seems to be strengthened by the consideration that placing upon
the clerk the duty of sending notice by mail, the performance of
that act is put effectually beyond the control of the plaintiff in
the litigation. At any rate it is obvious that so much of section
399 of the Code of Civil Procedure as relates to the sending of
notice by mail was complied with when the court made the
order. The question as to what may be the consequences of the
failure of the record to show the proof of compliance with that
requirement will be discussed by us further on.
The observations which have just been made lead to the
conclusion that the failure of the clerk to mail the notice, if in
fact he did so fail in his duty, is not such an irregularity, as
amounts to a denial of due process of law; and hence in our
opinion that irregularity, if proved, would not avoid the judgment
in this case. Notice was given by publication in a newspaper and
this is the only form of notice which the law unconditionally
requires. This in our opinion is all that was absolutely necessary
to sustain the proceedings.
It will be observed that in considering the effect of this
irregularity, it makes a difference whether it be viewed as a
question involving jurisdiction or as a question involving due
process of law. In the matter of jurisdiction there can be no
distinction between the much and the little. The court either has
jurisdiction or it has not; and if the requirement as to the mailing
of notice should be considered as a step antecedent to the
acquiring of jurisdiction, there could be no escape from the
conclusion that the failure to take that step was fatal to the
validity of the judgment. In the application of the idea of due
process of law, on the other hand, it is clearly unnecessary to be
so rigorous. The jurisdiction being once established, all that due
process of law thereafter requires is an opportunity for the
defendant to be heard; and as publication was duly made in the
newspaper, it would seem highly unreasonable to hold that
failure to mail the notice was fatal. We think that in applying the
requirement of due process of law, it is permissible to reflect
upon the purposes of the provision which is supposed to have
been violated and the principle underlying the exercise of judicial
power in these proceedings. Judge in the light of these
conceptions, we think that the provision of Act of Congress

AGUSTIN, E. P. | 4

declaring that no person shall be deprived of his property


without due process of law has not been infringed.
In the progress of this discussion we have stated the two
conclusions; (1) that the failure of the clerk to send the notice to
the defendant by mail did not destroy the jurisdiction of the
court and (2) that such irregularity did not infringe the
requirement of due process of law. As a consequence of these
conclusions the irregularity in question is in some measure shorn
of its potency. It is still necessary, however, to consider its effect
considered as a simple irregularity of procedure; and it would be
idle to pretend that even in this aspect the irregularity is not
grave enough. From this point of view, however, it is obvious
that any motion to vacate the judgment on the ground of the
irregularity in question must fail unless it shows that the
defendant was prejudiced by that irregularity. The least,
therefore, that can be required of the proponent of such a
motion is to show that he had a good defense against the action
to foreclose the mortgage. Nothing of the kind is, however,
shown either in the motion or in the affidavit which accompanies
the motion.
An application to open or vacate a judgment because of an
irregularity or defect in the proceedings is usually required to be
supported by an affidavit showing the grounds on which the
relief is sought, and in addition to this showing also a
meritorious defense to the action. It is held that a general
statement that a party has a good defense to the action is
insufficient. The necessary facts must be averred. Of course if a
judgment is void upon its face a showing of the existence of a
meritorious defense is not necessary. (10 R. C. L., 718.)
The lapse of time is also a circumstance deeply affecting this
aspect of the case. In this connection we quote the following
passage from the encyclopedic treatise now in course of
publication:
Where, however, the judgment is not void on its face,
and may therefore be enforced if permitted to stand
on the record, courts in many instances refuse to
exercise their quasi equitable powers to vacate a
judgement after the lapse of the term ay which it was
entered, except in clear cases, to promote the ends of
justice, and where it appears that the party making
the application is himself without fault and has acted
in good faith and with ordinary diligence. Laches on
the part of the applicant, if unexplained, is deemed
sufficient ground for refusing the relief to which he
might otherwise be entitled. Something is due to the
finality of judgments, and acquiescence or
unnecessary delay is fatal to motions of this
character, since courts are always reluctant to
interfere with judgments, and especially where they
have been executed or satisfied. The moving party
has the burden of showing diligence, and unless it is
shown affirmatively the court will not ordinarily
exercise its discretion in his favor. (15 R. C. L., 694,
695.)
It is stated in the affidavit that the defendant, Engracio Palanca
Tanquinyeng y Limquingco, died January 29, 1910. The
mortgage under which the property was sold was executed far
back in 1906; and the proceedings in the foreclosure were
closed by the order of court confirming the sale dated August 7,
1908. It passes the rational bounds of human credulity to
suppose that a man who had placed a mortgage upon property
worth nearly P300,000 and had then gone away from the scene
of his life activities to end his days in the city of Amoy, China,

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should have long remained in ignorance of the fact that the


mortgage had been foreclosed and the property sold, even
supposing that he had no knowledge of those proceedings while
they were being conducted. It is more in keeping with the
ordinary course of things that he should have acquired
information as to what was transpiring in his affairs at Manila;
and upon the basis of this rational assumption we are
authorized, in the absence of proof to the contrary, to presume
that he did have, or soon acquired, information as to the sale of
his property.
The Code of Civil Procedure, indeed, expressly declares that
there is a presumption that things have happened according to
the ordinary habits of life (sec. 334 [26]); and we cannot
conceive of a situation more appropriate than this for applying
the presumption thus defined by the lawgiver. In support of this
presumption, as applied to the present case, it is permissible to
consider the probability that the defendant may have received
actual notice of these proceedings from the unofficial notice
addressed to him in Manila which was mailed by an employee of
the bank's attorneys. Adopting almost the exact words used by
the Supreme Court of the United States in Grannis vs. Ordeans
(234 U. S., 385; 58 L. ed., 1363), we may say that in view of the
well-known skill of postal officials and employees in making
proper delivery of letters defectively addressed, we think the
presumption is clear and strong that this notice reached the
defendant, there being no proof that it was ever returned by the
postal officials as undelivered. And if it was delivered in Manila,
instead of being forwarded to Amoy, China, there is a probability
that the recipient was a person sufficiently interested in his
affairs to send it or communicate its contents to him.
Of course if the jurisdiction of the court or the sufficiency of the
process of law depended upon the mailing of the notice by the
clerk, the reflections in which we are now indulging would be
idle and frivolous; but the considerations mentioned are
introduced in order to show the propriety of applying to this
situation the legal presumption to which allusion has been made.
Upon that presumption, supported by the circumstances of this
case, ,we do not hesitate to found the conclusion that the
defendant voluntarily abandoned all thought of saving his
property from the obligation which he had placed upon it; that
knowledge of the proceedings should be imputed to him; and
that he acquiesced in the consequences of those proceedings
after they had been accomplished. Under these circumstances it
is clear that the merit of this motion is, as we have already
stated, adversely affected in a high degree by the delay in
asking for relief. Nor is it an adequate reply to say that the
proponent of this motion is an administrator who only qualified a
few months before this motion was made. No disability on the
part of the defendant himself existed from the time when the
foreclosure was effected until his death; and we believe that the
delay in the appointment of the administrator and institution of
this action is a circumstance which is imputable to the parties in
interest whoever they may have been. Of course if the minor
heirs had instituted an action in their own right to recover the
property, it would have been different.
It is, however, argued that the defendant has suffered prejudice
by reason of the fact that the bank became the purchaser of the
property at the foreclosure sale for a price greatly below that
which had been agreed upon in the mortgage as the upset price
of the property. In this connection, it appears that in article nine
of the mortgage which was the subject of this foreclosure, as
amended by the notarial document of July 19, 1906, the parties
to this mortgage made a stipulation to the effect that the value
therein placed upon the mortgaged properties should serve as a
basis of sale in case the debt should remain unpaid and the bank
should proceed to a foreclosure. The upset price stated in that

AGUSTIN, E. P. | 5

stipulation for all the parcels involved in this foreclosure was


P286,000. It is said in behalf of the appellant that when the
bank bought in the property for the sum of P110,200 it violated
that stipulation.
It has been held by this court that a clause in a mortgage
providing for a tipo, or upset price, does not prevent a
foreclosure, nor affect the validity of a sale made in the
foreclosure proceedings. (Yangco vs. Cruz Herrera and Wy Piaco,
11 Phil. Rep., 402; Banco-Espaol Filipino vs. Donaldson, Sim
and Co., 5 Phil. Rep., 418.) In both the cases here cited the
property was purchased at the foreclosure sale, not by the
creditor or mortgagee, but by a third party. Whether the same
rule should be applied in a case where the mortgagee himself
becomes the purchaser has apparently not been decided by this
court in any reported decision, and this question need not here
be considered, since it is evident that if any liability was incurred
by the bank by purchasing for a price below that fixed in the
stipulation, its liability was a personal liability derived from the
contract of mortgage; and as we have already demonstrated
such a liability could not be the subject of adjudication in an
action where the court had no jurisdiction over the person of the
defendant. If the plaintiff bank became liable to account for the
difference between the upset price and the price at which in
bought in the property, that liability remains unaffected by the
disposition which the court made of this case; and the fact that
the bank may have violated such an obligation can in no wise
affect the validity of the judgment entered in the Court of First
Instance.
In connection with the entire failure of the motion to show either
a meritorious defense to the action or that the defendant had
suffered any prejudice of which the law can take notice, we may
be permitted to add that in our opinion a motion of this kind,
which proposes to unsettle judicial proceedings long ago closed,
can not be considered with favor, unless based upon grounds
which appeal to the conscience of the court. Public policy
requires that judicial proceedings be upheld. The maximum here
applicable is non quieta movere. As was once said by Judge
Brewer, afterwards a member of the Supreme Court of the
United States:
Public policy requires that judicial proceedings be
upheld, and that titles obtained in those proceedings
be safe from the ruthless hand of collateral attack. If
technical defects are adjudged potent to destroy such
titles, a judicial sale will never realize that value of the
property, for no prudent man will risk his money in
bidding for and buying that title which he has reason
to fear may years thereafter be swept away through
some occult and not readily discoverable defect.
(Martin vs. Pond, 30 Fed., 15.)
In the case where that language was used an attempt was made
to annul certain foreclosure proceedings on the ground that the
affidavit upon which the order of publication was based
erroneously stated that the State of Kansas, when he was in fact
residing in another State. It was held that this mistake did not
affect the validity of the proceedings.
In the preceding discussion we have assumed that the clerk
failed to send the notice by post as required by the order of the
court. We now proceed to consider whether this is a proper
assumption; and the proposition which we propose to establish
is that there is a legal presumption that the clerk performed his
duty as the ministerial officer of the court, which presumption is
not overcome by any other facts appearing in the cause.

CIVIL PROCEDURE

In subsection 14 of section 334 of the Code of Civil Procedure it


is declared that there is a presumption "that official duty has
been regularly performed;" and in subsection 18 it is declared
that there is a presumption "that the ordinary course of business
has been followed." These presumptions are of course in no
sense novelties, as they express ideas which have always been
recognized. Omnia presumuntur rite et solemniter esse acta
donec probetur in contrarium. There is therefore clearly a legal
presumption that the clerk performed his duty about mailing this
notice; and we think that strong considerations of policy require
that this presumption should be allowed to operate with full
force under the circumstances of this case. A party to an action
has no control over the clerk of the court; and has no right to
meddle unduly with the business of the clerk in the performance
of his duties. Having no control over this officer, the litigant must
depend upon the court to see that the duties imposed on the
clerk are performed.
Other considerations no less potent contribute to strengthen the
conclusion just stated. There is no principle of law better settled
than that after jurisdiction has once been required, every act of
a court of general jurisdiction shall be presumed to have been
rightly done. This rule is applied to every judgment or decree
rendered in the various stages of the proceedings from their
initiation to their completion (Voorhees vs. United States Bank,
10 Pet., 314; 35 U. S., 449); and if the record is silent with
respect to any fact which must have been established before the
court could have rightly acted, it will be presumed that such fact
was properly brought to its knowledge. (The Lessee of Grignon
vs. Astor, 2 How., 319; 11 L. ed., 283.)
In making the order of sale [of the real state of a
decedent] the court are presumed to have adjudged
every question necessary to justify such order or
decree, viz: The death of the owners; that the
petitioners were his administrators; that the personal
estate was insufficient to pay the debts of the
deceased; that the private acts of Assembly, as to the
manner of sale, were within the constitutional power
of the Legislature, and that all the provisions of the
law as to notices which are directory to the
administrators have been complied with. . . . The
court is not bound to enter upon the record the
evidence on which any fact was decided. (Florentine
vs. Barton, 2 Wall., 210; 17 L. ed., 785.) Especially
does all this apply after long lapse of time.
Applegate vs. Lexington and Carter County Mining Co. (117 U.
S., 255) contains an instructive discussion in a case analogous to
that which is now before us. It there appeared that in order to
foreclose a mortgage in the State of Kentucky against a
nonresident debtor it was necessary that publication should be
made in a newspaper for a specified period of time, also be
posted at the front door of the court house and be published on
some Sunday, immediately after divine service, in such church as
the court should direct. In a certain action judgment had been
entered against a nonresident, after publication in pursuance of
these provisions. Many years later the validity of the proceedings
was called in question in another action. It was proved from the
files of an ancient periodical that publication had been made in
its columns as required by law; but no proof was offered to
show the publication of the order at the church, or the posting of
it at the front door of the court-house. It was insisted by one of
the parties that the judgment of the court was void for lack of
jurisdiction. But the Supreme Court of the United States said:
The court which made the decree . . . was a court of
general jurisdiction. Therefore every presumption not
inconsistent with the record is to be indulged in favor

AGUSTIN, E. P. | 6

of its jurisdiction. . . . It is to be presumed that the


court before making its decree took care of to see
that its order for constructive service, on which its
right to make the decree depended, had been
obeyed.
It is true that in this case the former judgment was the subject
of collateral , or indirect attack, while in the case at bar the
motion to vacate the judgment is direct proceeding for relief
against it. The same general presumption, however, is indulged
in favor of the judgment of a court of general jurisdiction,
whether it is the subject of direct or indirect attack the only
difference being that in case of indirect attack the judgment is
conclusively presumed to be valid unless the record affirmatively
shows it to be void, while in case of direct attack the
presumption in favor of its validity may in certain cases be
overcome by proof extrinsic to the record.
The presumption that the clerk performed his duty and that the
court made its decree with the knowledge that the requirements
of law had been complied with appear to be amply sufficient to
support the conclusion that the notice was sent by the clerk as
required by the order. It is true that there ought to be found
among the papers on file in this cause an affidavit, as required
by section 400 of the Code of Civil Procedure, showing that the
order was in fact so sent by the clerk; and no such affidavit
appears. The record is therefore silent where it ought to speak.
But the very purpose of the law in recognizing these
presumptions is to enable the court to sustain a prior judgment
in the face of such an omission. If we were to hold that the
judgment in this case is void because the proper affidavit is not
present in the file of papers which we call the record, the result
would be that in the future every title in the Islands resting upon
a judgment like that now before us would depend, for its
continued security, upon the presence of such affidavit among
the papers and would be liable at any moment to be destroyed
by the disappearance of that piece of paper. We think that no
court, with a proper regard for the security of judicial
proceedings and for the interests which have by law been
confided to the courts, would incline to favor such a conclusion.
In our opinion the proper course in a case of this kind is to hold
that the legal presumption that the clerk performed his duty still
maintains notwithstanding the absence from the record of the
proper proof of that fact.

proof that the clerk of the court failed in his duty and that,
instead of himself sending the requisite notice through the mail,
he relied upon Bernardo to send it for him. We do not think that
this is by any means a necessary inference. Of course if it had
affirmatively appeared that the clerk himself had attempted to
comply with this order and had directed the notification to
Manila when he should have directed it to Amoy, this would be
conclusive that he had failed to comply with the exact terms of
the order; but such is not this case. That the clerk of the
attorneys for the plaintiff erroneously sent a notification to the
defendant at a mistaken address affords in our opinion very
slight basis for supposing that the clerk may not have sent
notice to the right address.
There is undoubtedly good authority to support the position that
when the record states the evidence or makes an averment with
reference to a jurisdictional fact, it will not be presumed that
there was other or different evidence respecting the fact, or that
the fact was otherwise than stated. If, to give an illustration, it
appears from the return of the officer that the summons was
served at a particular place or in a particular manner, it will not
be presumed that service was also made at another place or in a
different manner; or if it appears that service was made upon a
person other than the defendant, it will not be presumed, in the
silence of the record, that it was made upon the defendant also
(Galpin vs. Page, 18 Wall., 350, 366; Settlemier vs. Sullivan, 97
U. S., 444, 449). While we believe that these propositions are
entirely correct as applied to the case where the person making
the return is the officer who is by law required to make the
return, we do not think that it is properly applicable where, as in
the present case, the affidavit was made by a person who, so far
as the provisions of law are concerned, was a mere
intermeddler.
The last question of importance which we propose to consider is
whether a motion in the cause is admissible as a proceeding to
obtain relief in such a case as this. If the motion prevails the
judgment of July 2, 1908, and all subsequent proceedings will be
set aside, and the litigation will be renewed, proceeding again
from the date mentioned as if the progress of the action had not
been interrupted. The proponent of the motion does not ask the
favor of being permitted to interpose a defense. His purpose is
merely to annul the effective judgment of the court, to the end
that the litigation may again resume its regular course.

In this connection it is important to bear in mind that under the


practice prevailing in the Philippine Islands the word "record" is
used in a loose and broad sense, as indicating the collective
mass of papers which contain the history of all the successive
steps taken in a case and which are finally deposited in the
archives of the clerk's office as a memorial of the litigation. It is
a matter of general information that no judgment roll, or book of
final record, is commonly kept in our courts for the purpose of
recording the pleadings and principal proceedings in actions
which have been terminated; and in particular, no such record is
kept in the Court of First Instance of the city of Manila. There is,
indeed, a section of the Code of Civil Procedure which directs
that such a book of final record shall be kept; but this provision
has, as a matter of common knowledge, been generally ignored.
The result is that in the present case we do not have the
assistance of the recitals of such a record to enable us to pass
upon the validity of this judgment and as already stated the
question must be determined by examining the papers contained
in the entire file.

There is only one section of the Code of Civil Procedure which


expressly recognizes the authority of a Court of First Instance to
set aside a final judgment and permit a renewal of the litigation
in the same cause. This is as follows:

But it is insisted by counsel for this motion that the affidavit of


Bernardo Chan y Garcia showing that upon April 4, 1908, he
sent a notification through the mail addressed to the defendant
at Manila, Philippine Islands, should be accepted as affirmative

When a judgment is rendered by a Court of First


Instance upon default, and a party thereto is unjustly
deprived of a hearing by fraud, accident, mistake or
excusable negligence, and the Court of First Instance

CIVIL PROCEDURE

SEC. 113. Upon such terms as may be just the court


may relieve a party or legal representative from the
judgment, order, or other proceeding taken against
him through his mistake, inadvertence, surprise, or
excusable neglect; Provided, That application thereof
be made within a reasonable time, but in no case
exceeding six months after such judgment, order, or
proceeding was taken.
An additional remedy by petition to the Supreme Court is
supplied by section 513 of the same Code. The first paragraph of
this section, in so far as pertinent to this discussion, provides as
follows:

AGUSTIN, E. P. | 7

which rendered the judgment has finally adjourned so


that no adequate remedy exists in that court, the
party so deprived of a hearing may present his
petition to the Supreme Court within sixty days after
he first learns of the rendition of such judgment, and
not thereafter, setting forth the facts and praying to
have judgment set aside. . . .
It is evident that the proceeding contemplated in this section is
intended to supplement the remedy provided by section 113;
and we believe the conclusion irresistible that there is no other
means recognized by law whereby a defeated party can, by a
proceeding in the same cause, procure a judgment to be set
aside, with a view to the renewal of the litigation.
The Code of Civil Procedure purports to be a complete system of
practice in civil causes, and it contains provisions describing with
much fullness the various steps to be taken in the conduct of
such proceedings. To this end it defines with precision the
method of beginning, conducting, and concluding the civil action
of whatever species; and by section 795 of the same Code it is
declared that the procedure in all civil action shall be in
accordance with the provisions of this Code. We are therefore of
the opinion that the remedies prescribed in sections 113 and 513
are exclusive of all others, so far as relates to the opening and
continuation of a litigation which has been once concluded.

a proceeding as proper under conditions different from those


defined by law. Upon the point of procedure here involved, we
refer to the case of People vs. Harrison (84 Cal., 607) wherein it
was held that a motion will not lie to vacate a judgment after the
lapse of the time limited by statute if the judgment is not void on
its face; and in all cases, after the lapse of the time limited by
statute if the judgment is not void on its face; and all cases,
after the lapse of such time, when an attempt is made to vacate
the judgment by a proceeding in court for that purpose an action
regularly brought is preferable, and should be required. It will be
noted taken verbatim from the California Code (sec. 473).
The conclusions stated in this opinion indicate that the judgment
appealed from is without error, and the same is accordingly
affirmed, with costs. So ordered.

Arellano, C.J., Torres, Carson, and Avancea, JJ., concur.

The motion in the present case does not conform to the


requirements of either of these provisions; and the consequence
is that in our opinion the action of the Court of First Instance in
dismissing the motion was proper.
If the question were admittedly one relating merely to an
irregularity of procedure, we cannot suppose that this
proceeding would have taken the form of a motion in the cause,
since it is clear that, if based on such an error, the came to late
for relief in the Court of First Instance. But as we have already
seen, the motion attacks the judgment of the court as void for
want of jurisdiction over the defendant. The idea underlying the
motion therefore is that inasmuch as the judgment is a nullity it
can be attacked in any way and at any time. If the judgment
were in fact void upon its face, that is, if it were shown to be a
nullity by virtue of its own recitals, there might possibly be
something in this. Where a judgment or judicial order is void in
this sense it may be said to be a lawless thing, which can be
treated as an outlaw and slain at sight, or ignored wherever and
whenever it exhibits its head.
But the judgment in question is not void in any such sense. It is
entirely regular in form, and the alleged defect is one which is
not apparent upon its face. It follows that even if the judgment
could be shown to be void for want of jurisdiction, or for lack of
due process of law, the party aggrieved thereby is bound to
resort to some appropriate proceeding to obtain relief. Under
accepted principles of law and practice, long recognized in
American courts, a proper remedy in such case, after the time
for appeal or review has passed, is for the aggrieved party to
bring an action to enjoin the judgment, if not already carried into
effect; or if the property has already been disposed of he may
institute suit to recover it. In every situation of this character an
appropriate remedy is at hand; and if property has been taken
without due process, the law concedes due process to recover it.
We accordingly old that, assuming the judgment to have been
void as alleged by the proponent of this motion, the proper
remedy was by an original proceeding and not by motion in the
cause. As we have already seen our Code of Civil Procedure
defines the conditions under which relief against a judgment
may be productive of conclusion for this court to recognize such

CIVIL PROCEDURE

AGUSTIN, E. P. | 8

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION

counterclaim and to pay attorney's fees in


the amount of P5.000.00.
SO ORDERED.

(Emphasis supplied).

As basis thereof, the CFI said:

G.R. No. 132524 December 29, 1998


FEDERICO C. SUNTAY, petitioner,
vs.
ISABEL COJUANGCO-SUNTAY * and HON. GREGORIO S.
SAMPAGA, Presiding Judge, Branch 78, Regional Trial
Court, Malolos, Bulacan, Respondents
MARTINEZ, J.:
Which should prevail between the ratio decidendi and the fallo of
a decision is the primary issue in this petition for certiorari under
Rule 65 filed by petitioner Federico C. Suntay who opposes
respondent Isabel's petition for appointment as administratrix of
her grandmother's estate by virtue of her right of representation.
The suit stemmed from the following:
On July 9, 1958, Emilio Aguinaldo Suntay (son of petitioner
Federico Suntay) and Isabel Cojuangco-Suntay were married in
the Portuguese Colony of Macao. Out of this marriage, three
children were born namely: Margarita Guadalupe, Isabel
Aguinaldo and Emilio Aguinaldo all surnamed Cojuangco Suntay.
After 4 years, the marriage soured so that in 1962, Isabel
Cojuangco-Suntay filed a criminal case 1 against her husband
Emilio Aguinaldo Suntay. In retaliation, Emilio Aguinaldo filed
before the then Court of First Instance (CFI) 2 a complaint for
legal separation against his wife, charging her, among others,
with infidelity and praying for the custody and care of their
children who were living with their mother. 3 The suit was
docketed as civil case number Q-7180.
On October 3, 1967, the trial court rendered a decision the
dispositive portion of which reads:
the marriage celebrated
between Emilio Aguinaldo Suntay and
Isabel Cojuangco-Suntay on July 9, 1958 is
hereby declared null and void and of no
effect as between the parties. It being
WHEREFORE,

admitted by the parties and shown by the


record that the question of the case and
custody of the three children have been
the subject of another case between the
same parties in another branch of this
Court in Special Proceeding No. 6428, the
same cannot be litigated in this case.
With regard to counterclaim, in view of the
manifestation of counsel that the third
party defendants are willing to pay
P50,000.00 for damages and that
defendant is willing to accept the offer
instead of her original demand for
P130,000.00, the defendant is awarded
said sum of P50,000.00 as her

CIVIL PROCEDURE

From February 1965 thru December 1965


plaintiff was confined in the Veterans
Memorial Hospital. Although at the time of
the trial of parricide case (September 8,
1967) the patient was already out of the
hospital he continued to be under
observation and treatment.
It is the opinion of Dr. Aramil that the
symptoms of the plaintiffs mental
aberration classified as schizophernia (sic)
had made themselves manifest even as
early as 1955; that the disease worsened
with time, until 1965 when he was actually
placed under expert neuro-psychiatrist
(sic) treatment; that even if the subject
has shown marked progress, the remains
bereft of adequate understanding of right
and wrong.
There is no controversy that the marriage
between the parties was effected on July
9, 1958, years after plaintiffs mental illness
had set in. This fact would justify a

declaration of nullity of the marriage under


Article 85 of the Civil Code which provides:

Art. 95. (sic) A marriage may be annulled


for nay of the following causes after ( sic)
existing at the time of the marriage:
xxx xxx xxx
(3) That either party

was
of unsound
mind, unless such
party, after coming
to reason, freely
cohabited with the
other as husband or
wife.
There is a dearth of proof at the time of
the marriage defendant knew about the
mental condition of plaintiff; and there is
proof that plaintiff continues to be without
sound reason. The charges in this very
complaint add emphasis to the findings of
the neuro-psychiatrist handling the patient,
that plaintiff really lives more in fancy than
in reality, a strong indication of
schizophernia (sic). 5 (Emphasis supplied).
On June 1, 1979, Emilio Aguinaldo
predeceased his mother, the decedent
Aguinaldo-Suntay. The latter is respondent
paternal grandmother. The decedent died on
1990 without leaving a will. 6

Suntay
Cristina
Isabel's
June 4,

AGUSTIN, E. P. | 9

Five years later or on October 26, 1995, respondent Isabel


Aguinaldo Cojuangco Suntay filed before the Regional Trial Court
(RTC) 7 a petition for issuance in her favor of Letters of
Administration of the Intestate Estate of her late grandmother
Cristina Aguinaldo-Suntay which case was docketed as Special
Proceeding Case No. 117-M-95. In her petition, she alleged
among others, that she is one of the legitimate grandchildren of
the decedent and prayed that she be appointed as administratrix
of the estate. 8
On December 15, 1995, petitioner filed an Opposition claiming
that he is the surviving spouse of the decedent, that he has
been managing the conjugal properties even while the decedent
has been alive and is better situated to protect the integrity of
the estate than the petitioner, that petitioner and her family
have been alienated from the decedent and the Oppositor for
more than thirty (30) years and thus, prayed that Letters of
Administration be issued instead to him. 9
On September 22, 1997 or almost two years after filing an
opposition, petitioner moved to dismiss the special proceeding
case alleging in the main that respondent Isabel should not be
appointed as administratrix of the decedent's estate. In support
thereof, petitioner argues that under Article 992 of the Civil Code
an illegitimate child has no right to succeed by right of
representation the legitimate relatives of her father or mother.
Emilio Aguinaldo Suntay, respondent Isabel's father predeceased
his mother, the late Cristina Aguinaldo Suntay and thus, opened
succession by representation. Petitioner contends that as a
consequence of the declaration by the then CFI of Rizal that the
marriage of respondent Isabel's parents is "null and void," the
latter is an illegitimate child, and has no right nor interest in the
estate of her paternal grandmother the decedent. 10 On
October 16, 1997, the trial court issued the assailed order
denying petitioner's Motion to Dismiss. 11 When his motion for
reconsideration was denied by the trial court in an order dated
January 9, 1998, 12 petitioner, as mentioned above filed this
petition.
Petitioner imputes grave abuse of discretion to respondent court
in denying his motion to dismiss as well as his motion for
reconsideration on the grounds that: (a) a motion to dismiss is
appropriate in a special proceeding for the settlement of estate
of a deceased person; (b) the motion to dismiss was timely filed;
(c) the dispositive portion of the decision declaring the marriage
of respondent Isabel's parents "null and void" must be upheld;
and (d) said decision had long become final and had, in fact,
been executed.
On the other hand, respondent Isabel asserts that petitioner's
motion to dismiss was alte having been filed after the opposition
was already filed in court, the counterpart of an answer in an
ordinary civil action and that petitioner in his opposition likewise
failed to specifically deny respondent Isabel's allegation that she
is a legitimate child of Emilio Aguinaldo Suntay, the decedent's
son. She further contends that petitioner proceeds from a
miscomprehension of the judgment in Civil Case No. Q-7180 and
the erroneous premise that there is a conflict between the body
of the decision and its dispositive portion because in an action
for annulment of a marriage, the court either sustains the
validity of the marriage or nullifies it. It does not, after hearing
declare a marriage "voidable" otherwise, the court will fail to
decide and lastly, that the status of marriages under Article 85 of
the Civil Code before they are annulled is "voidable."
The petition must fail.

CIVIL PROCEDURE

Certiorari as a special civil action can be availed of only if there

is concurrence of the essential requisites, to wit: (a) the tribunal,


board or officer exercising judicial functions has acted without or
in excess of jurisdiction or with grave abuse of discretion
amounting to lack or in excess of jurisdiction, and (b) there is no
appeal, nor any plain, speedy and adequate remedy in the
ordinary course of law for the purpose of annulling or modifying
the
proceeding. 13 There must be a capricious, arbitrary and
whimsical exercise of power for it to prosper. 14
A reading of the
respondent court
petitioner's motion
quoted thereunder,

assailed order, however, shows that the


did not abuse its discretion in denying
to dismiss, pertinent portions of which are
to wit:
The arguments of both parties judiciously
and objectively assessed and the pertinent
laws applied, the Court finds that a motion
to dismiss at this juncture is inappropriate
considering the peculiar nature of this
special proceeding as distinguished from
an ordinary civil action. At the outset, this
proceeding was not adversarial in nature
and the petitioner was not called upon to
assert a cause of action against a
particular defendant. Furthermore, the
State has a vital interest in the
maintenance of the proceedings, not only
because of the taxes due it, but also
because if no heirs qualify, the State shall
acquire the estate by escheat.
xxx xxx xxx
The court rules, for the purpose of
establishing the personality of the
petitioner to file and maintain this special
proceedings, that in the case bench, the
body of the decision determines the nature
of the action which is for annulment, not
declaration of nullity.
The oppositor's contention that the fallo of
the questioned decision (Annex "A"
Motion) prevails over the body thereof is
not without any qualification. It holds true
only when the dispositive portion of a final
decision is definite, clear and unequivocal
and can be wholly given effect without
need of interpretation or construction.
Where there is ambiguity or uncertainty,
the opinion or body of the decision may be
referred to for purposes of construing the
judgment (78 SCRA 541 citing Morelos v.
Go Chin Ling; and Heirs of Juan Presto v.
Galang). The reason is that the dispositive
portion must find support from the
decision's ratio decidendi.
Per decision of the Court of First Instance
Branch IX of Quezon City, marked as
Annex "A" of oppositor's motion, the
marriage of Emilio Aguinaldo Suntay and
Isabel Cojuangco-Suntay was annulled on
the basis of Art. 85 par. 3 of the Civil Code

AGUSTIN, E. P. | 10

which refers to marriages which are


considered voidable. Petitioner being
conceived and born of a voidable marriage
before the decree of annulment, she is
considered legitimate (Art. 89, par. 2, Civil
Code of the Phils.). 15

totally wiped out. The status of children born in voidable


marriages is governed by the second paragraph of Article 89
which provides that:

The trial court correctly ruled that "a motion to dismiss at this
juncture is inappropriate." The 1997 Rules of Civil Procedure
governs the procedure to be observed in actions, civil or criminal
and special proceedings. 16 The Rules do not only apply to
election cases, land registration, cadastral, naturalization and
insolvency proceedings, and other cases not therein provided
for.

conceived thereafter shall have the same


status,
rights
and
obligations
as
acknowledged natural children, and are
also called natural children by legal fiction.
21
(Emphasis supplied).

Special proceedings being one of the actions under the coverage


of the Rules on Civil Procedure, a motion to dismiss filed
thereunder would fall under Section 1, Rule 16 thereof. Said rule
provides that the motion to dismiss may be filed "within the time
for but before filing the answer to the complaint." Clearly, the
motion should have been filed on or before the filing of
petitioner's opposition 17 which is the counterpart of an answer
in ordinary civil actions.
Not only was petitioner's motion to dismiss filed out of time, it
was filed almost two years after respondent Isabel was already
through with the presentation of her witnesses and evidence and
petitioner had presented two witnesses. The filing of the motion
to dismiss is not only improper but also dilatory.
The respondent court, far from deviating or straying off course
from established jurisprudence on this matter, as petitioner
asserts, had in fact faithfully observed the law and legal
precedents in this case. In fact, the alleged conflict between the
body of the decision and the dispositive portion thereof which
created the ambiguity or uncertainty in the decision of the CFI of
Rizal is reconcilable. The legal basis for setting aside the
marriage of respondent Isabel's parents is clear under paragraph
3, Article 85 of the New Civil Code, the law in force prior to the
enactment of the Family Code.
Petitioner, however, strongly insists that the dispositive portion
of the CFI decision has categorically declared that the marriage
of respondent Isabel's parents is "null and void" and that the
legal effect of such declaration is that the marriage from its
inception is void and the children born out of said marriage are
illegitimate. Such argument cannot be sustained. Articles 80, 81,
82 and 83 18 of the New Civil Code classify what marriages are
void while Article 85 enumerates the causes for which a
marriage may be annulled. 19
The fundamental distinction between void and voidable
marriages is that a void marriage is deemed never to have taken
place at all. The effects of void marriages, with respect to
property relations of the spouses are provided for under Article
144 of the Civil Code. Children born of such marriages who are
called natural children by legal fiction have the same status,
rights and obligations as acknowledged natural children under
Article 89 20 irrespective of whether or not the parties to the void
marriage are in good faith or in bad faith.
On the other hand, a voidable marriage, is considered valid and
produces all its civil effects, until it is set aside by final judgment
of a competent court in an action for annulment. Juridically, the
annulment of a marriage dissolves the special contract as if it
had never been entered into but the law makes express
provisions to prevent the effects of the marriage from being

CIVIL PROCEDURE

Children conceived of voidable marriages


before the decree of annulment shall be
considered legitimate; and children

Stated otherwise, the annulment of "the marriage by


the court abolishes the legal character of the society
formed by the putative spouses, but it cannot destroy
the juridical consequences which the marital union
produced during its continuance." 22
Indeed, the terms "annul" and "null and void" have different
legal connotations and implications, Annul means to reduce to
nothing; annihilate; obliterate; to make void or of no effect; to
nullify; to abolish; to do away with 23 whereas null and void is
something that does not exist from the beginning. A marriage
that is annulled presupposes that it subsists but later ceases to
have legal effect when it is terminated through a court action.
But in nullifying a marriage, the court simply declares a status or
condition which already exists from the very beginning.
There is likewise no merit in petitioner's argument that it is the
dispositive portion of the decision which must control as to
whether or not the marriage of respondent Isabel's parents was
void or voidable. Such argument springs from a
miscomprehension of the judgment in Civil Case No. Q-7180 and
the erroneous premise that there is a conflict between the body
of the decision and its dispositive portion.
Parenthetically, it is an elementary principle of procedure that
the resolution of the court in a given issue as embodied in the
dispositive part of a decision or order is the controlling factor as
to settlement of rights of the parties and the questions
presented, notwithstanding statement in the body of the
decision or order which may be somewhat confusing, 24 the
same is not without a qualification. The foregoing rule holds true
only when the dispositive part of a final decision or order is
definite, clear and unequivocal and can be wholly given effect
without need of interpretation or construction-which usually is
"the case where the order or decision in question is that of a
court not of record which is not constitutionally required to state
the facts and the law on which the judgment is based." 25
Assuming that a doubt or uncertainty exists between the
dispositive portion and the body of the decision, effort must be
made to harmonize the whole body of the decision in order to
give effect to the intention, purpose and judgment of the court.
In Republic v. de los Angeles 26 the Court said:
Additionally, Article 10 of the Civil Code
states that "[i]n case of doubt in the
interpretation or application of laws, it is
presumed that the lawmaking body
intended right and justice to prevail." This

mandate of law, obviously cannot be any


less binding upon the courts in relation to
its judgments.

AGUSTIN, E. P. | 11

. . .The judgment must be read in its


entirety, and must be construed as a whole
so as to bring all of its parts into harmony
as far as this can be done by fair and
reasonable interpretation and so as to give
effect to every word and part if possible,
and to effectuate the intention and
purpose of the Court, consistent with the
provisions of the organic law. (49 C.J.S.,
pp. 863-864) [Emphasis supplied].
Thus, a reading of the pertinent portions of the decision of the
CFI of Rizal quoted earlier shows that the marriage is voidable:
It is the opinion of Dr. Aramil that the
symptoms of the plaintiffs mental
aberration classified as schizophernia (sic)
had made themselves manifest even as
early as 1955; that the disease worsened
with time, until 1965 when he was actually
placed under expert neuro-psychiatrict
(sic) treatment; that even if the subject
has shown marked progress, he remains
bereft of adequate understanding of right
and wrong.
There is no controversy that the marriage
between the parties was effected on July
9, 1958, years after plaintiff's mental
illness had set in. This fact would justify a
declaration of nullity of the marriage under
Article 85 of the Civil Code which provides:
Art. 95 (sic) A marriage may be annulled
for any of the following causes, existing at
the time of the marriage:

marriage on October 3, 1967 are considered


legitimate. For purposes of seeking appointment as
estate administratrix, the legitimate grandchildren,
including respondent Isabel, may invoke their
successional right of representation the estate of their
grandmother Cristina Aguinaldo Suntay after their
father, Emilio Aguinaldo Suntay, had predeceased
their grandmother. This is, however, without
prejudice to a determination by the courts of whether
the Letters of Administration may be granted to her.
Neither do the Court adjudged herein the
successional rights of the personalities involved over
the decedent's estate.
It would not therefore be amiss to reiterate at this point what
the Court, speaking through Chief Justice Ruiz Castro,
emphasized to "all magistrates of all levels of the judicial
hierarchy that extreme degree of care should be exercised in the
formulation of the dispositive portion of a decision, because it is
this portion that is to be executed once the decision becomes
final. The adjudication of the rights and obligations of thoe
parties, and the dispositions made as well as the directions and
instructions given by the court in the premises in conformity with
the body of the decision, must all be spelled out clearly,
distinctly and unequivocally leaving absolutely no room for
dispute, debate or interpretation. 28
WHEREFORE, finding no grave abuse of discretion, the instant
petition is DISIMISSED.
SO ORDERED.

Bellosillo, Puno and Mendoza, JJ., concur.

xxx xxx xxx


(3) That either party was of unsound mind,
unless such party, after coming to reason,
freely cohabited with the other as husband
and wife;
xxx xxx xxx
There is a dearth of proof at the time of
the marriage defendant knew about the
mental condition of plaintiff; and there is
proof that plaintiff continues to be without
sound reason. The charges in this very
handling the patient, that plaintiff really
lives more in fancy than in reality, a strong
indication of schizophernia (sic). 27
Inevitably, the decision of the CFI of Rizal declared
null and void the marriage of respondent Isabel's
parents based on paragraph 3, Article 85 of the New
Civil Code. The legal consequences as to the rights of
the children are therefore governed by the first clause
of the second paragraph of Article 89. A contrary
interpretation would be anathema to the rule just
above-mentioned. Based on said provision the
children of Emilio Aguinaldo Suntay and Isabel
Cojuangco-Suntay who were conceived and born prior
to the decree of the trial court setting aside their

CIVIL PROCEDURE

AGUSTIN, E. P. | 12

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 133000

October 2, 2001

PATRICIA NATCHER, petitioner,


vs.
HON. COURT OF APPEALS AND THE HEIR OF GRACIANO
DEL ROSARIO LETICIA DEL ROSARIO, EMILIA DEL
RESORIO MANANGAN, ROSALINDA FUENTES LLANA,
RODOLFO FUENTES, ALBERTO FUENTES, EVELYN DEL
ROSARIO, and EDUARDO DEL ROSARIO, respondent..
BUENA, J.:
May a Regional Trial Court, acting as a court of general
jurisdiction in an action for reconveyance annulment of title with
damages, adjudicate matters relating to the settlement of the
estate of a deceased person particularly on questions as to
advancement of property made by the decedent to any of the
heirs?
Sought to be reversed in this petition for review on certiorari
under Rule 45 is the decision1 of public respondent Court of
Appeals, the decretal portion of which declares:
"Wherefore in view of the foregoing considerations,
judgment appealed from is reversed and set aside
and another one entered annulling the Deed of Sale
executed by Graciano Del Rosario in favor of
defendant-appellee Patricia Natcher, and ordering the
Register of Deeds to Cancel TCT No. 186059 and
reinstate TCT No. 107443 without prejudice to the
filing of a special proceeding for the settlement of the
estate of Graciano Del Rosario in a proper court. No
costs.
"So ordered."
Spouses Graciano del Rosario and Graciana Esguerra were
registered owners of a parcel of land with an area of 9,322
square meters located in Manila and covered by Transfer
Certificate of Title No. 11889. Upon the death of Graciana in
1951, Graciano, together with his six children, namely: Bayani,
Ricardo, Rafael, Leticia, Emiliana and Nieves, entered into an
extrajudicial settlement of Graciana's estate on 09 February 1954
adjudicating and dividing among themselves the real property
subject of TCT No. 11889. Under the agreement, Graciano
received 8/14 share while each of the six children received 1/14
share of the said property. Accordingly, TCT No. 11889 was
cancelled, and in lieu thereof, TCT No. 35980 was issued in the
name of Graciano and the Six children.1wphi1.nt
Further, on 09 February 1954, said heirs executed and forged an
"Agreement of Consolidation-Subdivision of Real Property with
Waiver of Rights" where they subdivided among themselves the
parcel of land covered by TCT No. 35980 into several lots.
Graciano then donated to his children, share and share alike, a
portion of his interest in the land amounting to 4,849.38 square
meters leaving only 447.60 square meters registered under
Graciano's name, as covered by TCT No. 35988. Subsequently,
the land subject of TCT No. 35988 was further subdivided into
two separate lots where the first lot with a land area of 80.90

CIVIL PROCEDURE

square meter was registered under TCT No. 107442 and the
second lot with a land area of 396.70 square meters was
registered under TCT No. 107443. Eventually, Graciano sold the
first lot2 to a third person but retained ownership over the
second lot.3
On 20 March 1980, Graciano married herein petitioner Patricia
Natcher. During their marriage, Graciano sold the land covered
by TCT No. 107443 to his wife Patricia as a result of which TCT
No. 1860594 was issued in the latter's name. On 07 October
1985,Graciano died leaving his second wife Patricia and his six
children by his first marriage, as heirs.
In a complaint5 filed in Civil Case No. 71075 before the Regional
Trial Court of Manila, Branch 55, herein private respondents
alleged that upon Graciano's death, petitioner Natcher, through
the employment of fraud, misrepresentation and forgery,
acquired TCT No. 107443, by making it appear that Graciano
executed a Deed of Sale dated 25 June 19876 in favor herein
petitioner resulting in the cancellation of TCT No. 107443 and
the issuance of TCT no. 186059 in the name of Patricia Natcher.
Similarly, herein private respondents alleged in said complaint
that as a consequence of such fraudulent sale, their legitimes
have been impaired.
In her answer7 dated 19 August 1994, herein petitioner Natcher
averred that she was legally married to Graciano in 20 March
1980 and thus, under the law, she was likewise considered a
compulsory heir of the latter. Petitioner further alleged that
during Graciano's lifetime, Graciano already distributed, in
advance, properties to his children, hence, herein private
respondents may not anymore claim against Graciano's estate or
against herein petitioner's property.
After trial, the Regional Trial Court of Manila, Branch 55,
rendered a decision dated 26 January 1996 holding:8
"1) The deed of sale executed by the late Graciano
del Rosario in favor of Patricia Natcher is prohibited
by law and thus a complete nullity. There being no
evidence that a separation of property was agreed
upon in the marriage settlements or that there has
been decreed a judicial separation of property
between them, the spouses are prohibited from
entering (into) a contract of sale;
"2) The deed as sale cannot be likewise regarded as a
valid donation as it was equally prohibited by law
under Article 133 of the New Civil Code;
"3) Although the deed of sale cannot be regarded as
such or as a donation, it may however be regarded as
an extension of advance inheritance of Patricia
Natcher being a compulsory heir of the deceased."
On appeal, the Court of Appeals reversed and set aside the
lower court's decision ratiocinating, inter alia:
"It is the probate court that has exclusive jurisdiction
to make a just and legal distribution of the estate.
The court a quo, trying an ordinary action for
reconveyance / annulment of title, went beyond its
jurisdiction when it performed the acts proper only in
a special proceeding for the settlement of estate of a
deceased person. XXX

AGUSTIN, E. P. | 13

"X X X Thus the court a quo erred in regarding the


subject property as advance inheritance. What the
court should have done was merely to rule on the
validity of (the) sale and leave the issue on
advancement to be resolved in a separate proceeding
instituted for that purpose. XXX"
Aggrieved, herein petitioner seeks refuge under our protective
mantle through the expediency of Rule 45 of the Rules of Court
and assails the appellate court's decision "for being contrary to
law and the facts of the case."
We concur with the Court of Appeals and find no merit in the
instant petition.
Section 3, Rule 1 of the 1997 Rules of Civil Procedure defines
civil action and special proceedings, in this wise:
"XXX a) A civil action is one by which a party sues
another for the enforcement or protection of a right,
or the prevention or redress of a wrong.
"A civil action may either be ordinary or special. Both
are government by the rules for ordinary civil actions,
subject to specific rules prescribed for a special civil
action.
"XXX
"c) A special proceeding is a remedy by which a party
seeks to establish a status, a right or a particular
fact."
As could be gleaned from the foregoing, there lies a marked
distinction between an action and a special proceeding. An
action is a formal demand of one's right in a court of justice in
the manner prescribed by the court or by the law. It is the
method of applying legal remedies according to definite
established rules. The term "special proceeding" may be defined
as an application or proceeding to establish the status or right of
a party, or a particular fact. Usually, in special proceedings, no
formal pleadings are required unless the statute expressly so
provides. In special proceedings, the remedy is granted
generally upon an application or motion."9
Citing American Jurisprudence, a noted authority in Remedial
Law expounds further:
"It may accordingly be stated generally that actions
include those proceedings which are instituted and
prosecuted according to the ordinary rules and
provisions relating to actions at law or suits in equity,
and that special proceedings include those
proceedings which are not ordinary in this sense, but
is instituted and prosecuted according to some special
mode as in the case of proceedings commenced
without summons and prosecuted without regular
pleadings, which are characteristics of ordinary
actions. XXX A special proceeding must therefore be
in the nature of a distinct and independent
proceeding for particular relief, such as may be
instituted independently of a pending action, by
petition or motion upon notice."10

CIVIL PROCEDURE

Applying these principles, an action for reconveyance and


annulment of title with damages is a civil action, whereas
matters relating to settlement of the estate of a deceased person
such as advancement of property made by the decedent,
partake of the nature of a special proceeding, which
concomitantly requires the application of specific rules as
provided for in the Rules of Court.
Clearly, matters which involve settlement and distribution of the
estate of the decedent fall within the exclusive province of the
probate court in the exercise of its limited jurisdiction.
Thus, under Section 2, Rule 90 of the Rules of Court, questions
as to advancement made or alleged to have been made by the
deceased to any heir may be heard and determined by the
court having jurisdiction of the estate proceedings; and
the final order of the court thereon shall be binding on the
person raising the questions and on the heir.
While it may be true that the Rules used the word "may", it is
nevertheless clear that the same provision11 contemplates a
probate court when it speaks of the "court having jurisdiction of
the estate proceedings".
Corollarily, the Regional Trial Court in the instant case, acting in
its general jurisdiction, is devoid of authority to render an
adjudication and resolve the issue of advancement of the real
property in favor of herein petitioner Natcher, inasmuch as Civil
Case No. 471075 for reconveyance and annulment of title with
damages is not, to our mind, the proper vehicle to thresh out
said question. Moreover, under the present circumstances, the
RTC of Manila, Branch 55 was not properly constituted as a
probate court so as to validly pass upon the question of
advancement made by the decedent Graciano Del Rosario to his
wife, herein petitioner Natcher.
At this point, the appellate court's disquisition is elucidating:
"Before a court can make a partition and distribution
of the estate of a deceased, it must first settle the
estate in a special proceeding instituted for the
purpose. In the case at hand, the court a quo
determined the respective legitimes of the plaintiffsappellants and assigned the subject property owned
by the estate of the deceased to defendant-appellee
without observing the proper proceedings provided
(for) by the Rules of Court. From the aforecited
discussions, it is clear that trial courts trying an
ordinary action cannot resolve to perform acts
pertaining to a special proceeding because it is
subject to specific prescribed rules. Thus, the court a
quo erred in regarding the subject property as an
advance inheritance."12
In resolving the case at bench, this Court is not unaware of our
pronouncement in Coca vs. Borromeo13 and Mendoza vs.
Teh14 that whether a particular matter should be resolved by
the Regional Trial Court (then Court of First Instance) in the
exercise of its general jurisdiction or its limited probate
jurisdiction is not a jurisdictional issue but a mere question of
procedure. In essence, it is procedural question involving a
mode of practice "which may be waived".15
Notwithstanding, we do not see any waiver on the part of herein
private respondents inasmuch as the six children of the decedent
even assailed the authority of the trail court, acting in its general

AGUSTIN, E. P. | 14

jurisdiction, to rule on this specific issue of advancement made


by the decedent to petitioner.
Analogously, in a train of decisions, this Court has consistently
enunciated the long standing principle that although generally, a
probate court may not decide a question of title or ownership,
yet if the interested parties are all heirs, or the question is
one of collation or advancement, or the parties consent to
the assumption of jurisdiction by the probate court and the
rights of third parties are not impaired, then the probate court is
competent to decide the question of ownership. 16
Similarly in Mendoza vs. Teh, we had occasion to hold:
"In the present suit, no settlement of estate is
involved, but merely an allegation seeking
appointment as estate administratrix which does not
necessarily involve settlement of estate that
would have invited the exercise of the limited
jurisdiction of a probate court.17 (emphasis
supplied)
Of equal importance is that before any conclusion about the
legal share due to a compulsory heir may be reached, it is
necessary that certain steps be taken first. 18 The net estate of
the decedent must be ascertained, by deducting all payable
obligations and charges from the value of the property owned by
the deceased at the time of his death; then, all donations
subject to collation would be added to it. With the partible estate
thus determined, the legitime of the compulsory heir or heirs can
be established; and only thereafter can it be ascertained
whether or not a donation had prejudiced the legitimes.19
A perusal of the records, specifically the antecedents and
proceedings in the present case, reveals that the trial court failed
to observe established rules of procedure governing the
settlement of the estate of Graciano Del Rosario. This Court sees
no cogent reason to sanction the non-observance of these wellentrenched rules and hereby holds that under the prevailing
circumstances, a probate court, in the exercise of its limited
jurisdiction, is indeed the best forum to ventilate and adjudge
the issue of advancement as well as other related matters
involving the settlement of Graciano Del Rosario's
estate.1wphi1.nt
WHEREFORE, premises considered, the assailed decision of the
Court of Appeals is hereby AFFIRMED and the instant petition
is DISMISSED for lack of merit.
SO ORDERED.

Bellosillo, Mendoza, Quisumbing, De Leon, Jr., Davide, Jr., JJ.,


concur.

CIVIL PROCEDURE

AGUSTIN, E. P. | 15

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 150206

March 13, 2009

Heirs of TEOFILO GABATAN, namely: LOLITA GABATAN,


POMPEYO GABATAN, PEREGRINO GABATAN, REYNALDO
GABATAN, NILA GABATAN AND JESUS JABINIS, RIORITA
GABATAN TUMALA and FREIRA GABATAN, Petitioners,
vs.
Hon. COURT OF APPEALS and LOURDES EVERO PACANA,
Respondents.

similar case was previously filed by respondent against Teofilos


wife, Rita Vda. de Gabatan, on February 21, 1978, docketed as
Civil Case No. 5840 but the case was dismissed on May 3, 1983
for lack of interest. Finally, petitioners contended that the
complaint lacks or states no cause of action or, if there was any,
the same has long prescribed and/or has been barred by laches.
On June 20, 1989, the complaint was amended wherein the
heirs of Teofilo were individually named, to wit: Lolita Gabatan,
Pompeyo Gabatan, Peregrino Gabatan, Reynaldo Gabatan, Nila
Gabatan and Jesus Jabinis, Riorita Gabatan Tumal and Freira
Gabatan.
On July 30, 1990, petitioners filed an amended answer,
additionally alleging that the disputed land was already covered
by OCT No. P-3316 in the name of the heirs of Juan Gabatan
represented by petitioner Riorita Gabatan (Teofilos daughter).

DECISION
LEONARDO-DE CASTRO, J.:
Assailed and sought to be set aside in the instant petition for
review on certiorari are the Decision1 dated April 28, 2000, and
Resolution2 dated September 12, 2001 of the Court of Appeals
(CA), in CA G.R. CV No. 52273. The challenged Decision affirmed
the decision3 of the Regional Trial Court (RTC) of Cagayan de
Oro City, Branch 19, dated October 20, 1995 in Civil Case No.
89-092, an action for Recovery of Property and Ownership and
Possession, thereat commenced by respondent Lourdes Evero
Pacana against petitioners, heirs of Teofilo Gabatan, Jesus
Jabinis and Catalino Acantilado.

On October 20, 1995, the RTC rendered a decision in favor of


respondent, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendants, declaring the plaintiff the
owner of Lot No. 3095 C-5 situated at Calinugan, Balulang,
Cagayan de Oro City; and ordering the defendants represented
by Riorita Gabatan Tumala to RECONVEY Original Certificate of
Title No. P-3316 in favor of plaintiff Lourdes Evero Pacana, free
of any encumbrance; ordering the defendants to pay P10,000.00
by way of moral damages; P10,000.00 as Attorneys fees; and
P2,000.00 for litigation expenses.
SO ORDERED.4

Subject of the present controversy is a 1.1062 hectare parcel of


land, identified as Lot 3095 C-5 and situated at Calinugan,
Balulang, Cagayan de Oro City. This lot was declared for taxation
in the name of Juan Gabatan. In the complaint before the RTC,
respondent alleged that she is the sole owner of Lot 3095 C-5,
having inherited the same from her deceased mother,
Hermogena Gabatan Evero (Hermogena). Respondent further
claimed that her mother, Hermogena, is the only child of Juan
Gabatan and his wife, Laureana Clarito. Respondent alleged that
upon the death of Juan Gabatan, Lot 3095 C-5 was entrusted to
his brother, Teofilo Gabatan (Teofilo), and Teofilos wife, Rita
Gabatan, for administration. It was also claimed that prior to her
death Hermogena demanded for the return of the land but to no
avail. After Hermogenas death, respondent also did the same
but petitioners refused to heed the numerous demands to
surrender the subject property. According to respondent, when
Teofilo and his wife died, petitioners Jesus Jabinis and Catalino
Acantilado took possession of the disputed land despite
respondents demands for them to vacate the same.
In their answer, petitioners denied that respondents mother
Hermogena was the daughter of Juan Gabatan with Laureana
Clarito and that Hermogena or respondent is the rightful heir of
Juan Gabatan. Petitioners maintained that Juan Gabatan died
single in 1934 and without any issue and that Juan was survived
by one brother and two sisters, namely: Teofilo (petitioners
predecessor-in-interest), Macaria and Justa. These siblings
and/or their heirs, inherited the subject land from Juan Gabatan
and have been in actual, physical, open, public, adverse,
continuous and uninterrupted possession thereof in the concept
of owners for more than fifty (50) years and enjoyed the fruits
of the improvements thereon, to the exclusion of the whole
world including respondent. Petitioners clarified that Jesus
Jabinis and Catalino Acantilado have no interest in the subject
land; the former is merely the husband of Teofilos daughter
while the latter is just a caretaker. Petitioners added that a

CIVIL PROCEDURE

Aggrieved, petitioners appealed to the CA whereat their recourse


was docketed as CA-G.R. CV No. 52273.
On April 28, 2000, the CA rendered the herein challenged
Decision affirming that of the RTC. Dispositively, the Decision
reads:
WHEREFORE, premises considered, the questioned decision of
the lower court dated October 20, 1995 is hereby AFFIRMED.
With costs against appellants.
SO ORDERED.
Discounting petitioners argument that respondent is not related
to Juan Gabatan, the CA declared that respondents claim of
filiation with Juan Gabatan was sufficiently established during
trial. Thus, the CA echoed a long line of jurisprudence that
findings of fact of the trial court are entitled to great weight and
are not disturbed except for cogent reasons, such as when the
findings of fact are not supported by evidence.
The CA likewise gave weight to the Deed of Absolute Sale 5
executed by Macaria Gabatan de Abrogar, Teofilo, Hermogena
and heirs of Justa Gabatan, wherein Hermogena was identified
as an heir of Juan Gabatan:
x x x HERMOGENA GABATAN, of legal age, married, Filipino
citizen and presently residing at Kolambugan, Lanao del Norte,
Philippines, as Heir of the deceased, JUAN GABATAN; x x x.

AGUSTIN, E. P. | 16

To the CA, the Deed of Absolute Sale on July 30, 1966


containing such declaration which was signed by Teofilo and the
latters nearest relatives by consanguinity, is a tangible proof
that they acknowledged Hermogenas status as the daughter of
Juan Gabatan. Applying Section 38, Rule 1306 of the Rules of
Court on the declaration against interest, the CA ruled that
petitioners could not deny that even their very own father,
Teofilo formally recognized Hermogenas right to heirship from
Juan Gabatan which ultimately passed on to respondent.
As to the issue of prescription, the CA ruled that petitioners
possession of the disputed property could not ripen into
acquisitive prescription because their predecessor-in-interest,
Teofilo, never held the property in the concept of an
owner.lawphil.net
Aggrieved, petitioners are now with this Court via the present
recourse principally contending that the CA committed the
following reversible errors:
FIRST ERROR: The lower court erred in not declaring
that Juan Gabatan died single and without issue;
SECOND ERROR: The lower court erred in declaring
the plaintiff-appellee (respondent) as the sole and
surviving heir of Juan Gabatan, the only child of a
certain Hermogena Clareto "GABATAN";
THIRD ERROR: The lower court erred in declaring
that a certain Hermogena Clareto "GABATAN" is the
child and sole heir of Juan Gabatan;
FOURTH ERROR: The lower court erred in failing to
appreciate by preponderance of evidence in favor of
the defendants-appellants (petitioners) claim that
they and the heirs of Justa and Macaria both
surnamed Gabatan are the sole and surviving heirs of
Juan Gabatan and, therefore, entitled to inherit the
land subject matter hereof;
FIFTH ERROR: The lower court erred in not declaring
that the cause of action of plaintiff-appellee
(respondent) if any, has been barred by laches and/or
prescription.7
Before proceeding to the merits of the case, we must pass upon
certain preliminary matters.
In general, only questions of law may be raised in a petition for
review on certiorari under Rule 45 of the Rules of Court.
Questions of fact cannot be the subject of this particular mode
of appeal, for this Court is not a trier of facts.8 It is not our
function to examine and evaluate the probative value of the
evidence presented before the concerned tribunal upon which its
impugned decision or resolution is based.91avvphi1
However, there are established exceptions to the rule on
conclusiveness of the findings of fact by the lower courts, such
as (1) when the findings are grounded entirely on speculation,
surmises or conjectures; (2) when the inference made is
manifestly mistaken; (3) when there is grave abuse of
discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of facts are
conflicting; (6) when in making its findings the Court of Appeals
went beyond the issues of the case, or its findings are contrary
to the admissions of both the appellant and the appellee; (7)

CIVIL PROCEDURE

when the findings are contrary to the trial court; (8) when the
findings are conclusions without citation of specific evidence on
which they are based; (9) when the facts set forth in the petition
as well as in the petitioners main and reply briefs are not
disputed by the respondent; (10) when the findings of fact are
premised on the supposed absence of evidence and contradicted
by the evidence on record; and (11) when the Court of Appeals
manifestly overlooked certain relevant facts not disputed by the
parties, which, if properly considered, would justify a different
conclusion.10
Moreover, our rules recognize the broad discretionary power of
an appellate court to waive the lack of proper assignment of
errors and to consider errors not assigned. Thus, the Court is
clothed with ample authority to review rulings even if they are
not assigned as errors in the appeal in these instances: (a)
grounds not assigned as errors but affecting jurisdiction over the
subject matter; (b) matters not assigned as errors on appeal but
are evidently plain or clerical errors within contemplation of law;
(c) matters not assigned as errors on appeal but consideration of
which is necessary in arriving at a just decision and complete
resolution of the case or to serve the interests of justice or to
avoid dispensing piecemeal justice; (d) matters not specifically
assigned as errors on appeal but raised in the trial court and are
matters of record having some bearing on the issue submitted
which the parties failed to raise or which the lower court
ignored; (e) matters not assigned as errors on appeal but closely
related to an error assigned; and (f) matters not assigned as
errors on appeal but upon which the determination of a question
properly assigned, is dependent. 11
In the light of the foregoing established doctrines, we now
proceed to resolve the merits of the case.
The respondents main cause of action in the court a quo is the
recovery of ownership and possession of property. It is
undisputed that the subject property, Lot 3095 C-5, was owned
by the deceased Juan Gabatan, during his lifetime. 12 Before us
are two contending parties, both insisting to be the legal heir(s)
of the decedent.
Jurisprudence dictates that the determination of who are the
legal heirs of the deceased must be made in the proper special
proceedings in court, and not in an ordinary suit for recovery of
ownership and possession of property. This must take
precedence over the action for recovery of possession and
ownership. The Court has consistently ruled that the trial court
cannot make a declaration of heirship in the civil action for the
reason that such a declaration can only be made in a special
proceeding. Under Section 3, Rule 1 of the 1997 Revised Rules
of Court, a civil action is defined as one by which a party sues
another for the enforcement or protection of a right, or the
prevention or redress of a wrong while a special proceeding is a
remedy by which a party seeks to establish a status, a right, or a
particular fact. It is then decisively clear that the declaration of
heirship can be made only in a special proceeding inasmuch as
the petitioners here are seeking the establishment of a status or
right.13
In the early case of Litam, et al. v. Rivera,14 this Court ruled that
the declaration of heirship must be made in a special
proceeding, and not in an independent civil action. This doctrine
was reiterated in Solivio v. Court of Appeals15 where the Court
held:
xxx where despite the pendency of the special proceedings for
the settlement of the intestate estate of the deceased Rafael
Litam, the plaintiffs-appellants filed a civil action in which they

AGUSTIN, E. P. | 17

claimed that they were the children by a previous marriage of


the deceased to a Chinese woman, hence, entitled to inherit his
one-half share of the conjugal properties acquired during his
marriage to Marcosa Rivera, the trial court in the civil case
declared that the plaintiffs-appellants were not children of the
deceased, that the properties in question were paraphernal
properties of his wife, Marcosa Rivera, and that the latter was
his only heir. On appeal to this Court, we ruled that such
declarations (that Marcosa Rivera was the only heir of the
decedent) is improper, in Civil Case No. 2071, it being within the

exclusive competence of the court in Special Proceedings No.


1537, in which it is not as yet, in issue, and, will not be,
ordinarily, in issue until the presentation of the project of
partition.

In the more recent case of Milagros Joaquino v. Lourdes


Reyes,16 the Court reiterated its ruling that matters relating to
the rights of filiation and heirship must be ventilated in the
proper probate court in a special proceeding instituted precisely
for the purpose of determining such rights. Citing the case of
Agapay v. Palang,17 this Court held that the status of an
illegitimate child who claimed to be an heir to a decedents
estate could not be adjudicated in an ordinary civil action which,
as in this case, was for the recovery of property.
However, we are not unmindful of our decision in Portugal v.
Portugal-Beltran,18 where the Court relaxed its rule and allowed
the trial court in a proceeding for annulment of title to determine
the status of the party therein as heirs, to wit:
It appearing, however, that in the present case the only property
of the intestate estate of Portugal is the Caloocan parcel of land,
to still subject it, under the circumstances of the case, to a
special proceeding which could be long, hence, not expeditious,
just to establish the status of petitioners as heirs is not only
impractical; it is burdensome to the estate with the costs and
expenses of an administration proceeding. And it is superfluous
in light of the fact that the parties to the civil case subject of
the present case, could and had already in fact presented
evidence before the trial court which assumed jurisdiction over
the case upon the issues it defined during pre-trial.
In fine, under the circumstances of the present case, there being
no compelling reason to still subject Portugals estate to
administration proceedings since a determination of petitioners
status as heirs could be achieved in the civil case filed by
petitioners (Vide Pereira v. Court of Appeals, 174 SCRA 154
[1989]; Intestate Estate of Mercado v. Magtibay, 96 Phil. 383
[1955]), the trial court should proceed to evaluate the evidence
presented by the parties during the trial and render a decision
thereon upon the issues it defined during pre-trial, x x x.
(emphasis supplied)
Similarly, in the present case, there appears to be only one
parcel of land being claimed by the contending parties as their
inheritance from Juan Gabatan. It would be more practical to
dispense with a separate special proceeding for the
determination of the status of respondent as the sole heir of
Juan Gabatan, specially in light of the fact that the parties to
Civil Case No. 89-092, had voluntarily submitted the issue to the
RTC and already presented their evidence regarding the issue of
heirship in these proceeding. Also the RTC assumed jurisdiction
over the same and consequently rendered judgment thereon.
We GRANT the petition.

CIVIL PROCEDURE

After a meticulous review of the records of this case, we find


insufficient and questionable the basis of the RTC in conferring
upon respondent the status of sole heir of Juan Gabatan.
Respondent, in asserting to be entitled to possession and
ownership of the property, pinned her claim entirely on her
alleged status as sole heir of Juan Gabatan. It was incumbent
upon her to present preponderant evidence in support of her
complaint.
Under the Civil Code, the filiation of legitimate children is
established by any of the following:
ART. 265. The filiation of legitimate children is proved by the
record of birth appearing in the Civil Register, or by an authentic
document or a final judgment.
ART. 266. In the absence of the titles indicated in the preceding
article, the filiation shall be proved by the continuous possession
of status of a legitimate child.
ART. 267. In the absence of a record of birth, authentic
document, final judgment or possession of status, legitimate
filiation may be proved by any other means allowed by the Rules
of Court and special laws.
Here, two conflicting birth certificates19 of respondent were
presented at the RTC. Respondent, during her direct testimony,
presented and identified a purported certified true copy of her
typewritten birth certificate which indicated that her mothers
maiden name was "Hermogena Clarito Gabatan." Petitioners, on
the other hand, presented a certified true copy of respondents
handwritten birth certificate which differed from the copy
presented by respondent. Among the differences was
respondents mothers full maiden name which was indicated as
"Hermogena Calarito" in the handwritten birth certificate.
In resolving this particular issue, the trial court ruled in this wise:
The parties are trying to outdo with (sic) each other by
presenting two conflicting Certificate (sic) of Live Birth of plaintiff
herein, Lourdes Evero Pacana, which are Exhibit "A" for the
plaintiff and Exhibit "1" for the defendants. Which of this (sic) is
genuine, and which is falsified. These (sic) issue is crucial and
requires serious scrutiny. The Court is of the observation that
Exhibit "A" for the plaintiff which is a certified true copy is in due
form and bears the "as is and where is" rule. It has the
impression of the original certificate. The forms (sic) is an old
one used in the 1950s. Her mothers maiden name appearing
thereof is Hermogina (sic) Clarito Gabatan. While Exhibit "1", the
entries found thereof (sic) is handwritten which is very unusual
and of dubious source. The form used is of latest vintage. The
entry on the space for mothers maiden name is Hermogena
Calarito. There seems to be an apparent attempt to thwart
plaintiffs mother filiation with the omission of the surname
Gabatan. Considering these circumstances alone the Court is
inclined to believe that Exhibit "A" for the plaintiff is far more
genuine and authentic certificate of live birth. 20
Having carefully examined the questioned birth certificates, we
simply cannot agree with the above-quoted findings of the trial
court. To begin with, Exhibit A, as the trial court noted, was an
original typewritten document, not a mere photocopy or
facsimile. It uses a form of 1950s vintage21 but this Court is
unable to concur in the trial courts finding that Exhibit 1 22 was
of a later vintage than Exhibit A which was one of the trial

AGUSTIN, E. P. | 18

courts bases for doubting the authenticity of Exhibit 1. On the


contrary, the printed notation on the upper left hand corner of
Exhibit 1 states "Municipal Form No. 102 (Revised, January
1945)" which makes it an older form than Exhibit A. Thus, the
trial courts finding regarding which form was of more recent
vintage was manifestly contradicted by the evidence on record.
No actual signature appears on Exhibit A except that of a certain
Maximo P. Noriga, Deputy Local Civil Registrar of the Office of
the Local Civil Registrar, Cagayan de Oro City, who purportedly
certified on July 6, 1977 that Exhibit A was a true copy of
respondents birth certificate. The names of the attendant at
birth (Petra Sambaan) and the local civil registrar (J.L. Rivera) in
1950 were typewritten with the notation "(Sgd.)" also merely
typewritten beside their names. The words "A certified true
copy: July 6, 1977" above the signature of Maximo P. Noriga on
Exhibit A appear to be inscribed by the same typewriter as the
very entries in Exhibit A. It would seem that Exhibit A and the
information stated therein were prepared and entered only in
1977. Significantly, Maximo P. Noriga was never presented as a
witness to identify Exhibit A. Said document and the signature of
Maximo P. Noriga therein were identified by respondent herself
whose self-serving testimony cannot be deemed sufficient
authentication of her birth certificate.
We cannot subscribe to the trial courts view that since the
entries in Exhibit 1 were handwritten, Exhibit 1 was the one of
dubious credibility. Verily, the certified true copies of the
handwritten birth certificate of respondent (petitioners Exhibits
1 and 8) were duly authenticated by two competent witnesses;
namely, Rosita Vidal (Ms. Vidal), Assistant Registration Officer of
the Office of the City Civil Registrar, Cagayan de Oro City and
Maribeth E. Cacho (Ms. Cacho), Archivist of the National
Statistics Office (NSO), Sta. Mesa, Manila. Both witnesses
testified that: (a) as part of their official duties they have
custody of birth records in their respective offices, 23 and (b) the
certified true copy of respondents handwritten birth certificate is
a faithful reproduction of the original birth certificate registered
in their respective offices.24 Ms. Vidal, during her testimony,
even brought the original of the handwritten birth certificate
before the trial court and respondents counsel confirmed that
the certified true copy (which was eventually marked as Exhibit
1) was a faithful reproduction of the original. 25 Ms. Vidal likewise
categorically testified that no other copy of respondents birth
certificate exists in their records except the handwritten birth
certificate.26 Ms. Cacho, in turn, testified that the original of
respondents handwritten birth certificate found in the records of
the NSO Manila (from which Exhibit 8 was photocopied) was the
one officially transmitted to their office by the Local Civil Registry
Office of Cagayan de Oro.27 Both Ms. Vidal and Ms. Cacho
testified and brought their respective offices copies of
respondents birth certificate in compliance with subpoenas
issued by the trial court and there is no showing that they were
motivated by ill will or bias in giving their testimonies. Thus,
between respondents Exhibit A and petitioners Exhibits 1 and 8,
the latter documents deserve to be given greater probative
weight.
Even assuming purely for the sake of argument that the birth
certificate presented by respondent (Exhibit A) is a reliable
document, the same on its face is insufficient to prove
respondents filiation to her alleged grandfather, Juan Gabatan.
All that Exhibit A, if it had been credible and authentic, would
have proven was that respondents mother was a certain
"Hermogena Clarito Gabatan." It does not prove that same
"Hermogena Clarito Gabatan" is the daughter of Juan Gabatan.
Even the CA held that the conflicting certificates of live birth of
respondent submitted by the parties only proved the filiation of
respondent to Hermogena.28

CIVIL PROCEDURE

It was absolutely crucial to respondents cause of action that she


convincingly proves the filiation of her mother to Juan Gabatan.
To reiterate, to prove the relationship of respondents mother to
Juan Gabatan, our laws dictate that the best evidence of such
familial tie was the record of birth appearing in the Civil Register,
or an authentic document or a final judgment. In the absence of
these, respondent should have presented proof that her mother
enjoyed the continuous possession of the status of a legitimate
child. Only in the absence of these two classes of evidence is the
respondent allowed to present other proof admissible under the
Rules of Court of her mothers relationship to Juan Gabatan.
However, respondents mothers (Hermogenas) birth certificate,
which would have been the best evidence of Hermogenas
relationship to Juan Gabatan, was never offered as evidence at
the RTC. Neither did respondent present any authentic
document or final judgment categorically evidencing
Hermogenas relationship to Juan Gabatan.
Respondent relied on the testimony of her witnesses, Frisco
Lawan, Felicisima Nagac Pacana and Cecilia Nagac Villareal who
testified that they personally knew Hermogena (respondents
mother) and/or Juan Gabatan, that they knew Juan Gabatan was
married to Laureana Clarito and that Hermogena was the child
of Juan and Laureana. However, none of these witnesses had
personal knowledge of the fact of marriage of Juan to Laureana
or the fact of birth of Hermogena to Juan and Laureana. They
were not yet born or were very young when Juan supposedly
married Laureana or when Hermogena was born and they all
admitted that none of them were present at Juan and
Laureanas wedding or Hermogenas birth. These witnesses
based their testimony on what they had been told by, or heard
from, others as young children. Their testimonies were, in a
word, hearsay.
Other circumstances prevent us from giving full faith to
respondents witnesses testimonies. The records would show
that they cannot be said to be credible and impartial witnesses.
Frisco Lawan testified that he was the son of Laureana by a man
other than Juan Gabatan and was admittedly not at all related to
Juan Gabatan.29 His testimony regarding the relationships within
the Gabatan family is hardly reliable. As for Felicisima Nagac
Pacana and Cecilia Nagac Villareal who are children of Justa
Gabatan Nagac,30 this Court is wary of according probative
weight to their testimonies since respondent admitted during her
cross-examination that her (respondents) husband is the son of
Felicisima Nagac Pacana.31 In other words, although these
witnesses are indeed blood relatives of petitioners, they are also
the mother and the aunt of respondents husband. They cannot
be said to be entirely disinterested in the outcome of the case.
Aside from the testimonies of respondents witnesses, both the
RTC and the CA relied heavily on a photocopy of a Deed of
Absolute Sale32 (Exhibit H) presented by respondent and which
appeared to be signed by the siblings and the heirs of the
siblings of Juan Gabatan. In this document involving the sale of
a lot different from Lot 3095 C-5, "Hermogena Gabatan as heir
of the deceased Juan Gabatan" was indicated as one of the
vendors. The RTC deemed the statement therein as an
affirmation or recognition by Teofilo Gabatan, petitioners
predecessor in interest, that Hermogena Gabatan was the heir of
Juan Gabatan.33 The CA considered the same statement as a
declaration against interest on the part of Teofilo Gabatan.34
However, the admission of this Deed of Absolute Sale, including
its contents and the signatures therein, as competent evidence
was vigorously and repeatedly objected to by petitioners
counsel for being a mere photocopy and not being properly

AGUSTIN, E. P. | 19

authenticated.35 After a close scrutiny of the said photocopy of


the Deed of Absolute Sale, this Court cannot uphold the
admissibility of the same.
Under the best evidence rule, when the subject of inquiry is the
contents of a document, no evidence shall be admissible other
than the original document itself. 36 Although the best evidence
rule admits of exceptions and there are instances where the
presentation of secondary evidence would be allowed, such as
when the original is lost or the original is a public record, the
basis for the presentation of secondary evidence must still be
established. Thus, in Department of Education Culture and
Sports v. Del Rosario,37 we held that a party must first
satisfactorily explain the loss of the best or primary evidence
before he can resort to secondary evidence. A party must first
present to the court proof of loss or other satisfactory
explanation for non-production of the original instrument.
In the case at bar, a perusal of the transcript of the testimony of
Felicisima Nagac Pacana (who identified the photocopy of the
Deed of Absolute Sale) plainly shows that she gave no testimony
regarding the whereabouts of the original, whether it was lost or
whether it was recorded in any public office.
There is an ostensible attempt to pass off Exhibit H as an
admissible public document. For this, respondent relied on the
stamped notation on the photocopy of the deed that it is a
certified true xerox copy and said notation was signed by a
certain Honesto P. Velez, Sr., Assessment Officer, who seems to
be an officer in the local assessors office. Regarding the
authentication of public documents, the Rules of Court38 provide
that the record of public documents, when admissible for any
purpose, may be evidenced by an official publication thereof or
by a copy attested by the officer having legal custody of the
record, or by his deputy.39 The attestation of the certifying
officer must state, in substance, that the copy is a correct copy
of the original, or a specific part thereof, as the case may be.40
To begin with, no proof whatsoever was presented by
respondent that an original of Exhibit H was registered or exists
in the records of the local assessors office. Furthermore, the
stamped certification of Honesto P. Velez is insufficient
authentication of Exhibit H since Velezs certification did not
state that Exhibit H was a true copy from the original. Even
worse, Velez was not presented as a witness to attest that
Exhibit H was a true copy from the original. Indeed, it is highly
doubtful that Velez could have made such an attestation since
the assessors office is not the official repository of original
notarized deeds of sale and could not have been the legal
custodian contemplated in the rules.
It is the notary public who is mandated by law to keep an
original of the Deed of Absolute Sale in his notarial register and
to forward the same to the proper court. It is the notary public
or the proper court that has custody of his notarial register that
could have produced the original or a certified true copy thereof.
Instead, the Deed of Absolute Sale was identified by Felicisima
Nagac Pacana who, despite appearing to be a signatory thereto,
is not a disinterested witness and as can be gleaned from her
testimony, she had no personal knowledge of the preparation of
the alleged certified true copy of the Deed of Absolute Sale. She
did not even know who secured a copy of Exhibit H from the
assessors office.41 To be sure, the roundabout and defective
manner of authentication of Exhibit H renders it inadmissible for
the purpose it was offered, i.e. as proof that Teofilo Gabatan
acknowledged or admitted the status of Hermogena Gabatan as
heir of Juan Gabatan.

CIVIL PROCEDURE

Even if we are to overlook the lack of proper authentication of


Exhibit H and consider the same admissible, it still nonetheless
would have only provided proof that a certain Hermogena
Gabatan was the heir of Juan Gabatan. Exhibit H does not show
the filiation of respondent to either Hermogena Gabatan or Juan
Gabatan. As discussed above, the only document that
respondent produced to demonstrate her filiation to "Hermogena
Gabatan" (respondents Exhibit A) was successfully put in doubt
by contrary evidence presented by petitioners.
As for the issue of laches, we are inclined to likewise rule against
respondent. According to respondents own testimony,42 Juan
Gabatan died sometime in 1933 and thus, the cause of action of
the heirs of Juan Gabatan to recover the decedents property
from third parties or to quiet title to their inheritance accrued in
1933. Yet, respondent and/or her mother Hermogena, if they
were truly the legal heirs of Juan Gabatan, did not assert their
rights as such. It is only in 1978 that respondent filed her first
complaint to recover the subject property, docketed as Civil Case
No. 5840, against Rita Gabatan, the widow of Teofilo Gabatan. 43
However, that case was dismissed without prejudice for failure
to prosecute.44 Again, respondent waited until 1989 to refile her
cause of action, i.e. the present case. 45 She claimed that she
waited until the death of Rita Gabatan to refile her case out of
respect because Rita was then already old.46
We cannot accept respondents flimsy reason. It is precisely
because Rita Gabatan and her contemporaries (who might have
personal knowledge of the matters litigated in this case) were
advancing in age and might soon expire that respondent should
have exerted every effort to preserve valuable evidence and
speedily litigate her claim. As we held in Republic of the
Philippines v. Agunoy: "Vigilantibus, sed non dormientibus, jura
subveniunt, the law aids the vigilant, not those who sleep on
their rights[O]ne may not sleep on a right while expecting to
preserve it in its pristine purity."47
All in all, this Court finds that respondent dismally failed to
substantiate, with convincing, credible and independently
verifiable proof, her assertion that she is the sole heir of Juan
Gabatan and thus, entitled to the property under litigation.
Aggravating the weakness of her evidence were the
circumstances that (a) she did not come to court with clean
hands for she presented a tampered/altered, if not outright
spurious, copy of her certificate of live birth and (b) she
unreasonably delayed the prosecution of her own cause of
action. If the Court cannot now affirm her claim, respondent has
her own self to blame.
WHEREFORE, the petition is GRANTED. The Court of Appeals
Decision in CA-G.R. CV No. 52273, affirming the decision of the
Regional Trial Court in Civil Case No. 89-092, is hereby
REVERSED and SET ASIDE. The complaint and amended
complaint in Civil Case No. 89-092 are DISMISSED for lack of
merit.
SO ORDERED.
TERESITA J. LEONARDO-DE CASTRO
Associate Justice

AGUSTIN, E. P. | 20

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. No. 75919 May 7, 1987
MANCHESTER DEVELOPMENT CORPORATION, ET AL.,
petitioners,
vs.
COURT OF APPEALS, CITY LAND DEVELOPMENT
CORPORATION, STEPHEN ROXAS, ANDREW LUISON,
GRACE LUISON and JOSE DE MAISIP, respondents.

Tanjuatco, Oreta and Tanjuatco for petitioners.


Pecabar Law Offices for private respondents.
RESOLUTION
GANCAYCO, J.:
Acting on the motion for reconsideration of the resolution of the
Second Division of January 28,1987 and another motion to refer
the case to and to be heard in oral argument by the Court En
Banc filed by petitioners, the motion to refer the case to the
Court en banc is granted but the motion to set the case for oral
argument is denied.
Petitioners in support of their contention that the filing fee must
be assessed on the basis of the amended complaint cite the case
of Magaspi vs. Ramolete. 1 They contend that the Court of
Appeals erred in that the filing fee should be levied by
considering the amount of damages sought in the original
complaint.
The environmental facts of said case differ from the present in
that
1. The Magaspi case was an action for recovery of ownership
and possession of a parcel of land with damages. 2 While the
present case is an action for torts and damages and specific
performance with prayer for temporary restraining order, etc. 3
2. In the Magaspi case, the prayer in the complaint seeks not
only the annulment of title of the defendant to the property, the
declaration of ownership and delivery of possession thereof to
plaintiffs but also asks for the payment of actual moral,
exemplary damages and attorney's fees arising therefrom in the
amounts specified therein. 4 However, in the present case, the
prayer is for the issuance of a writ of preliminary prohibitory
injunction during the pendency of the action against the
defendants' announced forfeiture of the sum of P3 Million paid
by the plaintiffs for the property in question, to attach such
property of defendants that maybe sufficient to satisfy any
judgment that maybe rendered, and after hearing, to order
defendants to execute a contract of purchase and sale of the
subject property and annul defendants' illegal forfeiture of the
money of plaintiff, ordering defendants jointly and severally to
pay plaintiff actual, compensatory and exemplary damages as
well as 25% of said amounts as maybe proved during the trial as
attorney's fees and declaring the tender of payment of the
purchase price of plaintiff valid and producing the effect of

CIVIL PROCEDURE

payment and to make the injunction permanent. The amount of


damages sought is not specified in the prayer although the body
of the complaint alleges the total amount of over P78 Million as
damages suffered by plaintiff. 5
3. Upon the filing of the complaint there was an honest
difference of opinion as to the nature of the action in the
Magaspi case. The complaint was considered as primarily an
action for recovery of ownership and possession of a parcel of
land. The damages stated were treated as merely to the main
cause of action. Thus, the docket fee of only P60.00 and P10.00
for the sheriff's fee were paid. 6
In the present case there can be no such honest difference of
opinion. As maybe gleaned from the allegations of the complaint
as well as the designation thereof, it is both an action for
damages and specific performance. The docket fee paid upon
filing of complaint in the amount only of P410.00 by considering
the action to be merely one for specific performance where the
amount involved is not capable of pecuniary estimation is
obviously erroneous. Although the total amount of damages
sought is not stated in the prayer of the complaint yet it is
spelled out in the body of the complaint totalling in the amount
of P78,750,000.00 which should be the basis of assessment of
the filing fee.
4. When this under-re assessment of the filing fee in this case
was brought to the attention of this Court together with similar
other cases an investigation was immediately ordered by the
Court. Meanwhile plaintiff through another counsel with leave of
court filed an amended complaint on September 12, 1985 for the
inclusion of Philips Wire and Cable Corporation as co-plaintiff and
by emanating any mention of the amount of damages in the
body of the complaint. The prayer in the original complaint was
maintained. After this Court issued an order on October 15, 1985
ordering the re- assessment of the docket fee in the present
case and other cases that were investigated, on November 12,
1985 the trial court directed plaintiffs to rectify the amended
complaint by stating the amounts which they are asking for. It
was only then that plaintiffs specified the amount of damages in
the body of the complaint in the reduced amount of
P10,000,000.00. 7 Still no amount of damages were specified in
the prayer. Said amended complaint was admitted.
On the other hand, in the Magaspi case, the trial court ordered
the plaintiffs to pay the amount of P3,104.00 as filing fee
covering the damages alleged in the original complaint as it did
not consider the damages to be merely an or incidental to the
action for recovery of ownership and possession of real property.
8
An amended complaint was filed by plaintiff with leave of court
to include the government of the Republic as defendant and
reducing the amount of damages, and attorney's fees prayed for
to P100,000.00. Said amended complaint was also admitted. 9
In the Magaspi case, the action was considered not only one for
recovery of ownership but also for damages, so that the filing
fee for the damages should be the basis of assessment.
Although the payment of the docketing fee of P60.00 was found
to be insufficient, nevertheless, it was held that since the
payment was the result of an "honest difference of opinion as to
the correct amount to be paid as docket fee" the court "had
acquired jurisdiction over the case and the proceedings
thereafter had were proper and regular." 10 Hence, as the
amended complaint superseded the original complaint, the
allegations of damages in the amended complaint should be the
basis of the computation of the filing fee. 11

AGUSTIN, E. P. | 21

In the present case no such honest difference of opinion was


possible as the allegations of the complaint, the designation and
the prayer show clearly that it is an action for damages and
specific performance. The docketing fee should be assessed by
considering the amount of damages as alleged in the original
complaint.

SO ORDERED.

As reiterated in the Magaspi case the rule is well-settled "that a


case is deemed filed only upon payment of the docket fee
regardless of the actual date of filing in court . 12 Thus, in the
present case the trial court did not acquire jurisdiction over the
case by the payment of only P410.00 as docket fee. Neither can
the amendment of the complaint thereby vest jurisdiction upon
the Court. 13 For an legal purposes there is no such original
complaint that was duly filed which could be amended.
Consequently, the order admitting the amended complaint and
all subsequent proceedings and actions taken by the trial court
are null and void.
The Court of Appeals therefore, aptly ruled in the present case
that the basis of assessment of the docket fee should be the
amount of damages sought in the original complaint and not in
the amended complaint.
The Court cannot close this case without making the observation
that it frowns at the practice of counsel who filed the original
complaint in this case of omitting any specification of the
amount of damages in the prayer although the amount of over
P78 million is alleged in the body of the complaint. This is clearly
intended for no other purpose than to evade the payment of the
correct filing fees if not to mislead the docket clerk in the
assessment of the filing fee. This fraudulent practice was
compounded when, even as this Court had taken cognizance of
the anomaly and ordered an investigation, petitioner through
another counsel filed an amended complaint, deleting all
mention of the amount of damages being asked for in the body
of the complaint. It was only when in obedience to the order of
this Court of October 18, 1985, the trial court directed that the
amount of damages be specified in the amended complaint, that
petitioners' counsel wrote the damages sought in the much
reduced amount of P10,000,000.00 in the body of the complaint
but not in the prayer thereof. The design to avoid payment of
the required docket fee is obvious.
The Court serves warning that it will take drastic action upon a
repetition of this unethical practice.
To put a stop to this irregularity, henceforth all complaints,
petitions, answers and other similar pleadings should specify the
amount of damages being prayed for not only in the body of the
pleading but also in the prayer, and said damages shall be
considered in the assessment of the filing fees in any case. Any
pleading that fails to comply with this requirement shall not bib
accepted nor admitted, or shall otherwise be expunged from the
record.
The Court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee. An amendment of the
complaint or similar pleading will not thereby vest jurisdiction in
the Court, much less the payment of the docket fee based on
the amounts sought in the amended pleading. The ruling in the
Magaspi case 14 in so far as it is inconsistent with this
pronouncement is overturned and reversed.
WHEREFORE, the motion for reconsideration is denied for lack of
merit.

CIVIL PROCEDURE

AGUSTIN, E. P. | 22

Republic of the Philippines


SUPREME COURT
Manila
EN BANC
G.R. Nos. 79937-38 February 13, 1989
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS
and D.J. WARBY, petitioners,
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge,
Branch 104, Regional Trial Court, Quezon City and
MANUEL CHUA UY PO TIONG, respondents.

Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law


Offices for petitioners. Tanjuatco, Oreta, Tanjuatco, Berenguer &
Sanvicente Law Offices for private respondent.

GANCAYCO, J.:
Again the Court is asked to resolve the issue of whether or not a
court acquires jurisdiction over a case when the correct and
proper docket fee has not been paid.
On February 28, 1984, petitioner Sun Insurance Office, Ltd.
(SIOL for brevity) filed a complaint with the Regional Trial Court
of Makati, Metro Manila for the consignation of a premium
refund on a fire insurance policy with a prayer for the judicial
declaration of its nullity against private respondent Manuel Uy Po
Tiong. Private respondent as declared in default for failure to file
the required answer within the reglementary period.
On the other hand, on March 28, 1984, private respondent filed
a complaint in the Regional Trial Court of Quezon City for the
refund of premiums and the issuance of a writ of preliminary
attachment which was docketed as Civil Case No. Q-41177,
initially against petitioner SIOL, and thereafter including E.B.
Philipps and D.J. Warby as additional defendants. The complaint
sought, among others, the payment of actual, compensatory,
moral, exemplary and liquidated damages, attorney's fees,
expenses of litigation and costs of the suit. Although the prayer
in the complaint did not quantify the amount of damages sought
said amount may be inferred from the body of the complaint to
be about Fifty Million Pesos (P50,000,000.00).
Only the amount of P210.00 was paid by private respondent as
docket fee which prompted petitioners' counsel to raise his
objection. Said objection was disregarded by respondent Judge
Jose P. Castro who was then presiding over said case. Upon the
order of this Court, the records of said case together with
twenty-two other cases assigned to different branches of the
Regional Trial Court of Quezon City which were under
investigation for under-assessment of docket fees were
transmitted to this Court. The Court thereafter returned the said
records to the trial court with the directive that they be re-raffled
to the other judges in Quezon City, to the exclusion of Judge
Castro. Civil Case No. Q-41177 was re-raffled to Branch 104, a
sala which was then vacant.
On October 15, 1985, the Court en banc issued a Resolution in
Administrative Case No. 85-10-8752-RTC directing the judges in
said cases to reassess the docket fees and that in case of

CIVIL PROCEDURE

deficiency, to order its payment. The Resolution also requires all


clerks of court to issue certificates of re-assessment of docket
fees. All litigants were likewise required to specify in their
pleadings the amount sought to be recovered in their
complaints.
On December 16, 1985, Judge Antonio P. Solano, to whose sala
Civil Case No. Q-41177 was temporarily assigned, issuedan order
to the Clerk of Court instructing him to issue a certificate of
assessment of the docket fee paid by private respondent and, in
case of deficiency, to include the same in said certificate.
On January 7, 1984, to forestall a default, a cautionary answer
was filed by petitioners. On August 30,1984, an amended
complaint was filed by private respondent including the two
additional defendants aforestated.
Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177
was thereafter assigned, after his assumption into office on
January 16, 1986, issued a Supplemental Order requiring the
parties in the case to comment on the Clerk of Court's letterreport signifying her difficulty in complying with the Resolution
of this Court of October 15, 1985 since the pleadings filed by
private respondent did not indicate the exact amount sought to
be recovered. On January 23, 1986, private respondent filed a
"Compliance" and a "Re-Amended Complaint" stating therein a
claim of "not less than Pl0,000,000. 00 as actual compensatory
damages" in the prayer. In the body of the said second
amended complaint however, private respondent alleges actual
and compensatory damages and attorney's fees in the total
amount of about P44,601,623.70.
On January 24, 1986, Judge Asuncion issued another Order
admitting the second amended complaint and stating therein
that the same constituted proper compliance with the Resolution
of this Court and that a copy thereof should be furnished the
Clerk of Court for the reassessment of the docket fees. The
reassessment by the Clerk of Court based on private
respondent's claim of "not less than P10,000,000.00 as actual
and compensatory damages" amounted to P39,786.00 as docket
fee. This was subsequently paid by private respondent.
Petitioners then filed a petition for certiorari with the Court of
Appeals questioning the said order of Judie Asuncion dated
January 24, 1986.
On April 24, 1986, private respondent filed a supplemental
complaint alleging an additional claim of P20,000,000.00 as
d.qmages so the total claim amounts to about P64,601,623.70.
On October 16, 1986, or some seven months after filing the
supplemental complaint, the private respondent paid the
additional docket fee of P80,396.00. 1
On August 13, 1987, the Court of Appeals rendered a decision
ruling, among others, as follows:
WHEREFORE,
rendered:

judgment

is

hereby

1. Denying due course to the petition in


CA-G.R. SP No. 1, 09715 insofar as it seeks
annulment of the order
(a) denying petitioners' motion to dismiss
the complaint, as amended, and

AGUSTIN, E. P. | 23

(b) granting the writ of preliminary


attachment, but giving due course to the
portion
thereof
questioning
the
reassessment of the docketing fee, and
requiring the Honorable respondent Court
to reassess the docketing fee to be paid by
private respondent on the basis of the
amount of P25,401,707.00. 2
Hence, the instant petition.
During the pendency of this petition and in conformity with the
said judgment of respondent court, private respondent paid the
additional docket fee of P62,432.90 on April 28, 1988. 3
The main thrust of the petition is that the Court of Appeals erred
in not finding that the lower court did not acquire jurisdiction
over Civil Case No. Q-41177 on the ground of nonpayment of
the correct and proper docket fee. Petitioners allege that while it
may be true that private respondent had paid the amount of
P182,824.90 as docket fee as herein-above related, and
considering that the total amount sought to be recovered in the
amended and supplemental complaint is P64,601,623.70 the
docket fee that should be paid by private respondent is
P257,810.49, more or less. Not having paid the same, petitioners
contend that the complaint should be dismissed and all incidents
arising therefrom should be annulled. In support of their theory,
petitioners cite the latest ruling of the Court in Manchester
Development Corporation vs. CA, 4 as follows:
The Court acquires jurisdiction over any
case only upon the payment of the
prescribed docket fee. An amendment of
the complaint or similar pleading will not
thereby vest jurisdiction in the Court, much
less the payment of the docket fee based
on the amounts sought in the amended
pleading. The ruling in the Magaspi Case in
so far as it is inconsistent with this
pronouncement
is
overturned
and
reversed.
On the other hand, private respondent claims that the ruling in
Manchester cannot apply retroactively to Civil Case No. Q41177
for at the time said civil case was filed in court there was no
such Manchester ruling as yet. Further, private respondent avers
that what is applicable is the ruling of this Court in Magaspi v.
Ramolete, 5 wherein this Court held that the trial court acquired
jurisdiction over the case even if the docket fee paid was
insufficient.
The contention that Manchester cannot apply retroactively to
this case is untenable. Statutes regulating the procedure of the
courts will be construed as applicable to actions pending and
undetermined at the time of their passage. Procedural laws are
retrospective in that sense and to that extent. 6
In Lazaro vs. Endencia and Andres, 7 this Court held that the
payment of the full amount of the docket fee is an indispensable
step for the perfection of an appeal. In a forcible entry and
detainer case before the justice of the peace court of Manaoag,
Pangasinan, after notice of a judgment dismissing the case, the
plaintiff filed a notice of appeal with said court but he deposited
only P8.00 for the docket fee, instead of P16.00 as required,
within the reglementary period of appeal of five (5) days after
receiving notice of judgment. Plaintiff deposited the additional
P8.00 to complete the amount of the docket fee only fourteen

CIVIL PROCEDURE

(14) days later. On the basis of these facts, this court held that
the Court of First Instance did notacquire jurisdiction to hear and
determine the appeal as the appeal was not thereby perfected.
In Lee vs. Republic, 8 the petitioner filed a verified declaration of
intention to become a Filipino citizen by sending it through
registered mail to the Office of the Solicitor General in 1953 but
the required filing fee was paid only in 1956, barely 5V2 months
prior to the filing of the petition for citizenship. This Court ruled
that the declaration was not filed in accordance with the legal
requirement that such declaration should be filed at least one
year before the filing of the petition for citizenship. Citing Lazaro,
this Court concluded that the filing of petitioner's declaration of
intention on October 23, 1953 produced no legal effect until the
required filing fee was paid on May 23, 1956.
In Malimit vs. Degamo, 9 the same principles enunciated in
Lazaro and Lee were applied. It was an original petition for quo
warranto contesting the right to office of proclaimed candidates
which was mailed, addressed to the clerk of the Court of First
Instance, within the one-week period after the proclamation as
provided therefor by law. 10 However, the required docket fees
were paid only after the expiration of said period. Consequently,
this Court held that the date of such payment must be deemed
to be the real date of filing of aforesaid petition and not the date
when it was mailed.
Again, in Garica vs, Vasquez, 11 this Court reiterated the rule
that the docket fee must be paid before a court will act on a
petition or complaint. However, we also held that said rule is not
applicable when petitioner seeks the probate of several wills of
the same decedent as he is not required to file a separate action
for each will but instead he may have other wills probated in the
same special proceeding then pending before the same court.
Then in Magaspi, 12 this Court reiterated the ruling in Malimit
and Lee that a case is deemed filed only upon payment of the
docket fee regardless of the actual date of its filing in court. Said
case involved a complaint for recovery of ownership and
possession of a parcel of land with damages filed in the Court of
First Instance of Cebu. Upon the payment of P60.00 for the
docket fee and P10.00 for the sheriffs fee, the complaint was
docketed as Civil Case No. R-11882. The prayer of the complaint
sought that the Transfer Certificate of Title issued in the name of
the defendant be declared as null and void. It was also prayed
that plaintiff be declared as owner thereof to whom the proper
title should be issued, and that defendant be made to pay
monthly rentals of P3,500.00 from June 2, 1948 up to the time
the property is delivered to plaintiff, P500,000.00 as moral
damages, attorney's fees in the amount of P250,000.00, the
costs of the action and exemplary damages in the amount of
P500,000.00.
The defendant then filed a motion to compel the plaintiff to pay
the correct amount of the docket fee to which an opposition was
filed by the plaintiff alleging that the action was for the recovery
of a parcel of land so the docket fee must be based on its
assessed value and that the amount of P60.00 was the correct
docketing fee. The trial court ordered the plaintiff to pay
P3,104.00 as filing fee.
The plaintiff then filed a motion to admit the amended complaint
to include the Republic as the defendant. In the prayer of the
amended complaint the exemplary damages earlier sought was
eliminated. The amended prayer merely sought moral damages
as the court may determine, attorney's fees of P100,000.00 and
the costs of the action. The defendant filed an opposition to the
amended complaint. The opposition notwithstanding, the

AGUSTIN, E. P. | 24

amended complaint was admitted by the trial court. The trial


court reiterated its order for the payment of the additional
docket fee which plaintiff assailed and then challenged before
this Court. Plaintiff alleged that he paid the total docket fee in
the amount of P60.00 and that if he has to pay the additional
fee it must be based on the amended complaint.
The question posed, therefore, was whether or not the plaintiff
may be considered to have filed the case even if the docketing
fee paid was not sufficient. In Magaspi, We reiterated the rule
that the case was deemed filed only upon the payment of the
correct amount for the docket fee regardless of the actual date
of the filing of the complaint; that there was an honest
difference of opinion as to the correct amount to be paid as
docket fee in that as the action appears to be one for the
recovery of property the docket fee of P60.00 was correct; and
that as the action is also one, for damages, We upheld the
assessment of the additional docket fee based on the damages
alleged in the amended complaint as against the assessment of
the trial court which was based on the damages alleged in the
original complaint.
However, as aforecited, this Court overturned Magaspi in
Manchester. Manchester involves an action for torts and
damages and specific performance with a prayer for the
issuance of a temporary restraining order, etc. The prayer in said
case is for the issuance of a writ of preliminary prohibitory
injunction during the pendency of the action against the
defendants' announced forfeiture of the sum of P3 Million paid
by the plaintiffs for the property in question, the attachment of
such property of defendants that may be sufficient to satisfy any
judgment that may be rendered, and, after hearing, the issuance
of an order requiring defendants to execute a contract of
purchase and sale of the subject property and annul defendants'
illegal forfeiture of the money of plaintiff. It was also prayed that
the defendants be made to pay the plaintiff jointly and severally,
actual, compensatory and exemplary damages as well as 25% of
said amounts as may be proved during the trial for attorney's
fees. The plaintiff also asked the trial court to declare the tender
of payment of the purchase price of plaintiff valid and sufficient
for purposes of payment, and to make the injunction permanent.
The amount of damages sought is not specified in the prayer
although the body of the complaint alleges the total amount of
over P78 Millon allegedly suffered by plaintiff.
Upon the filing of the complaint, the plaintiff paid the amount of
only P410.00 for the docket fee based on the nature of the
action for specific performance where the amount involved is not
capable of pecuniary estimation. However, it was obvious from
the allegations of the complaint as well as its designation that
the action was one for damages and specific performance. Thus,
this court held the plaintiff must be assessed the correct docket
fee computed against the amount of damages of about P78
Million, although the same was not spelled out in the prayer of
the complaint.
Meanwhile, plaintiff through another counsel, with leave of
court, filed an amended complaint on September 12, 1985 by
the inclusion of another co-plaintiff and eliminating any mention
of the amount of damages in the body of the complaint. The
prayer in the original complaint was maintained.
On October 15, 1985, this Court ordered the re-assessment of
the docket fee in the said case and other cases that were
investigated. On November 12, 1985, the trial court directed the
plaintiff to rectify the amended complaint by stating the amounts
which they were asking for. This plaintiff did as instructed. In
the body of the complaint the amount of damages alleged was

CIVIL PROCEDURE

reduced to P10,000,000.00 but still no amount of damages was


specified in the prayer. Said amended complaint was admitted.
Applying the principle in Magaspi that "the case is deemed filed
only upon payment of the docket fee regardless of the actual
date of filing in court," this Court held that the trial court did not
acquire jurisdiction over the case by payment of only P410.00
for the docket fee. Neither can the amendment of the complaint
thereby vest jurisdiction upon the Court. For all legal purposes
there was no such original complaint duly filed which could be
amended. Consequently, the order admitting the amended
complaint and all subsequent proceedings and actions taken by
the trial court were declared null and void. 13
The present case, as above discussed, is among the several
cases of under-assessment of docket fee which were
investigated by this Court together with Manchester. The facts
and circumstances of this case are similar to Manchester. In the
body of the original complaint, the total amount of damages
sought amounted to about P50 Million. In the prayer, the
amount of damages asked for was not stated. The action was
for the refund of the premium and the issuance of the writ of
preliminary attachment with damages. The amount of only
P210.00 was paid for the docket fee. On January 23, 1986,
private respondent filed an amended complaint wherein in the
prayer it is asked that he be awarded no less than
P10,000,000.00 as actual and exemplary damages but in the
body of the complaint the amount of his pecuniary claim is
approximately P44,601,623.70. Said amended complaint was
admitted and the private respondent was reassessed the
additional docket fee of P39,786.00 based on his prayer of not
less than P10,000,000.00 in damages, which he paid.
On April 24, 1986, private respondent filed a supplemental
complaint alleging an additional claim of P20,000,000.00 in
damages so that his total claim is approximately P64,601,620.70.
On October 16, 1986, private respondent paid an additional
docket fee of P80,396.00. After the promulgation of the decision
of the respondent court on August 31, 1987 wherein private
respondent was ordered to be reassessed for additional docket
fee, and during the pendency of this petition, and after the
promulgation of Manchester, on April 28, 1988, private
respondent paid an additional docket fee of P62,132.92.
Although private respondent appears to have paid a total
amount of P182,824.90 for the docket fee considering the total
amount of his claim in the amended and supplemental complaint
amounting to about P64,601,620.70, petitioner insists that
private respondent must pay a docket fee of P257,810.49.
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

AGUSTIN, E. P. | 25

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.
WHEREFORE, the petition is DISMISSED for lack of merit. The
Clerk of Court of the court a quo is hereby instructed to reassess
and determine the additional filing fee that should be paid by
private respondent considering the total amount of the claim
sought in the original complaint and the supplemental complaint
as may be gleaned from the allegations and the prayer thereof
and to require private respondent to pay the deficiency, if any,
without pronouncement as to costs.
SO ORDERED.

Fernan (C.J), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz,


Paras, Feliciano, Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino,
Medialdea and Regalado, JJ., concur.

CIVIL PROCEDURE

AGUSTIN, E. P. | 26

Republic of the Philippines


SUPREME COURT
Manila

2 ) Actual damages, as proven;


3 ) Moral and nominal damages as the
Honorable Court may fix ;

EN BANC

4) P30,000.00, "as attorney's fees, and


representation fees of P5,000.00 per day
of appearance;" 4

G.R. Nos. 88075-77 December 20, 1989


MAXIMO TACAY, PONCIANO PANES and ANTONIA NOEL,
petitioners,
vs.
REGIONAL TRIAL COURT OF TAGUM Davao del Norte,
Branches 1 and 2, Presided by Hon. Marcial Fernandez
and Hon. Jesus Matas, respectively, PATSITA GAMUTAN,
Clerk of Court, and GODOFREDO PINEDA, respondents.

RESOLUTION
NARVASA, J.:
1

three

(3) actions for recovery of possession (acciones publicianas 2 )


were separately instituted by Godofredo Pineda against three (3)
defendants, docketed as follows:
1) vs. Antonia Noel Civil Case No. 2209
2) vs. Ponciano Panes Civil Case No. 2210
3) vs. Maximo Tacay Civil Case No. 2211.
Civil Cases Numbered 2209 and 2211 were raffled to Branch I of
the Trial Court, presided over by Judge Marcial Hernandez. Civil
No. 2210 was assigned to Branch 2, presided over by Judge
Jesus Matas.
The complaints 3 all alleged the same essential facts (1) Pineda
was the owner of a parcel of land measuring 790 square meters,
his ownership being evidenced by TCT No. T-46560; (2) the
previous owner had allowed the defendants to occupy portions
of the land by mere tolerance; (3) having himself need to use
the property, Pineda had made demands on the defendants to
vacate the property and pay reasonable rentals therefor, but
these demands had been refused; and (4) the last demand had
been made more than a year prior to the commencement of
suit. The complaints prayed for the same reliefs, to wit:
1) that plaintiff be declared owner of the
areas occupied by the defendants;
2) that defendants and their "privies and
allies" be ordered to vacate and deliver the
portions of the land usurped by them;
3) that each defendant be ordered to pay:
1 ) P 2,000 as monthly rents from
February, 1987;

CIVIL PROCEDURE

4) that he (Pineda) be granted such


"further relief and remedies ... just and
equitable in the premises.
The prayer of each complaint contained a handwritten notation
(evidently made by plaintiff's counsel) reading, "P5,000.00 as
and for," immediately above the typewritten words, "Actual
damages, as proven," the intention apparently being to make
the entire phrase read, " P5,000.00 as and for actual damages
as proven. 5

Eduardo C. De Vera for petitioners.

In the Regional Trial Court at Tagum, Davao del Norte,

and

Motions to dismiss were filed in behalf of each of the defendants


by common counsel . 6 Every motion alleged that the Trial Court
had not acquired jurisdiction of the case
. . . for the reason that the ... complaint
violates the mandatory and clear provision
of Circular No. 7 of the ... Supreme Court
dated March 24,1988, by failing to specify
all the amounts of damages which plaintiff
is claiming from defendant;" and
. . . for ... failure (of the complaint) to
even allege the basic requirement as to the
assessed value of the subject lot in
dispute.
Judge Matas denied the motion to dismiss filed in Civil Case No.
2210 but ordered the expunction of the "allegations in paragraph
11 of the ... complaint regarding moral as well as nominal
damages . 7 On motion of defendant Panes, Judge Matas later
ordered the striking out, too, of the "handwritten amount of
'P5,000. 00 as and for.' including the typewritten words 'actual
damages as proven' ... in sub-paragraph b of paragraph 4 in the
conclusion and prayer of the complaint ..." 8
The motions to dismiss submitted in Civil Cases Numbered 2211
and 2209 were also denied in separate orders promulgated by
Judge Marcial Fernandez. 9 His Order in Case No. 2209 dated
March 15, 1989 (a) declared that since the "action at bar is for
Reivindicatoria, Damages and Attorney's fees ... (d)efinitely this
Court has the exclusive jurisdiction," (b) that the claims for
actual, moral and nominal damages "are only one aspect of the
cause of action," and (c) because of absence of specification of
the amounts claimed as moral, nominal and actual damages,
they should be "expunged from the records."
Ascribing grave abuse of discretion to both Judges Matas and
Fernandez in the rendition of the Orders above described, the
defendants in all three (3) actions have filed with this Court a
"Joint Petition" for certiorari, prohibition and mandamus, with
prayer for temporary restraining order and/or writ of preliminary
prohibitory injunction," praying essentially that said orders be
annulled and respondent judges directed to dismiss all the

AGUSTIN, E. P. | 27

complaints "without prejudice to private respondent Pineda's refiling a similar complaint that complies with Circular No. 7." The
joint petition (a) re-asserted the proposition that because the
complaints had failed to state the amounts being claimed as
actual, moral and nominal damages, the Trial Courts a quo had
not acquired jurisdiction over the three (3) actions in questionindeed, the respondent Clerk of Court should not have accepted
the complaints which initiated said suits, and (b) it was not
proper merely to expunge the claims for damages and allow "the
so-called cause of action for "reivindicatoria" remain for trial" by
itself. 10
The joint petition should be, as it is hereby, dismissed.
It should be dismissed for failure to comply with this Court's
Circular No. 1-88 (effective January 1, 1989). The copies of the
challenged Orders thereto attached 11 were not certified by the
proper Clerk of Court or his duly authorized representative.
Certification was made by the petitioners' counsel, which is not
allowed.
The petition should be dismissed, too, for another equally
important reason. It fails to demonstrate any grave abuse of
discretion on the part of the respondent Judges in rendering the
Orders complained of or, for that matter, the existence of any
proper cause for the issuance of the writ of mandamus. On the
contrary, the orders appear to have correctly applied the law to
the admitted facts.
It is true that the complaints do not state the amounts being
claimed as actual, moral and nominal damages. It is also true,
however, that the actions are not basically for the recovery of
sums of money. They are principally for recovery of possession
of real property, in the nature of an accion publiciana.
Determinative of the court's jurisdiction in this type of actions is
the nature thereof, not the amount of the damages allegedly
arising from or connected with the issue of title or possession,
and regardless of the value of the property. Quite obviously, an
action for recovery of possession of real property (such as an
accion plenaria de possesion) or the title thereof, 12 or for
partition or condemnation of, or the foreclosure of a mortgage
on, said real property 13 - in other words, a real action-may be
commenced and prosecuted without an accompanying claim for
actual, moral, nominal or exemplary damages; and such an
action would fall within the exclusive, original jurisdiction of the
Regional Trial Court.
Batas Pambansa Bilang 129 provides that Regional Trial Courts
shall exercise exclusive original jurisdiction inter alia over "all
civil actions which involve the title to, or possession of, real
property, or any interest therein, except actions for forcible entry
into and unlawful detainer of lands or buildings, original
jurisdiction over which is conferred upon Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts." 14 The rule applies regardless of the value of the real
property involved, whether it be worth more than P20,000.00 or
not, infra. The rule also applies even where the complaint
involving realty also prays for an award of damages; the amount
of those damages would be immaterial to the question of the
Court's jurisdiction. The rule is unlike that in other cases e.g.,
actions simply for recovery of money or of personal property, 15
or actions in admiralty and maritime jurisdiction 16 in which the
amount claimed, 17 or the value of the personal property, is
determinative of jurisdiction; i.e., the value of the personal
property or the amount claimed should exceed twenty thousand
pesos (P20,000.00) in order to be cognizable by the Regional
Trial Court.

CIVIL PROCEDURE

Circular No. 7 of this Court, dated March 24, 1988, cannot thus
be invoked, as the petitioner does, as authority for the dismissal
of the actions at bar. That circular, avowedly inspired by the
doctrine laid down in Manchester Development Corporation v.
Court of appeals, 149 SCRA 562 (May 7, 1987), has but limited
application to said actions, as shall presently be discussed.
Moreover, the rules therein laid down have since been clarified
and amplified by the Court's subsequent decision in Sun
Insurance Office, Ltd. (SIOL) v. Asuncion, et al. , G.R. Nos.
79937-38, February 13, 1989.
Circular No. 7 was aimed at the practice of certain parties who
omit from the prayer of their complaints "any specification of the
amount of damages," the omission being "clearly intended for no
other purposes than to evade the payment of the correct filing
fees if not to mislead the docket clerk, in the assessment of the
filing fee." The following rules were therefore set down:
1. All complaints, petitions, answers, and similar pleadings
should specify the amount of damages being prayed for not only
in the body of the pleading but also in the prayer, and said
damages shall be considered in the assessment of the filing fees
in any case.
2. Any pleading that fails to comply with this requirement shall
not be accepted nor admitted, or shall otherwise be expunged
from the record.
3. 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 clarificatory and additional rules laid down in Sun Insurance
Office, Ltd. v. Asuncion, supra, read as follows:
1. It is not simply the filing of the complaint or appropriate
initiatory pleading, but (also) 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.
As will be noted, the requirement in Circular No. 7 that
complaints, petitions, answers, and similar pleadings should
specify the amount of damages being prayed for not only in the
body of the pleading but also in the prayer, has not been

AGUSTIN, E. P. | 28

altered. What has been revised is the rule that subsequent


"amendment of the complaint or similar pleading will not thereby
vest jurisdiction in the Court, much less the payment of the
docket fee based on the amount sought in the amended
pleading," the trial court now being authorized to allow payment
of the fee within a reasonable time but in no case beyond the
applicable prescriptive or reglementary period. Moreover, a new
rule has been added, governing awards of claims not specified in
the pleading - i.e., damages arising after the filing of the
complaint or similar pleading-as to which the additional filing fee
therefor shall constitute a lien on the judgment.
Now, under the Rules of Court, docket or filing fees are assessed
on the basis of the "sum claimed," on the one hand, or the
"value of the property in litigation or the value of the estate," on
the other. 18 There are, in other words, as already above
intimated, actions or proceedings involving real property, in
which the value of the property is immaterial to the court's
jurisdiction, account thereof being taken merely for assessment
of the legal fees; and there are actions or proceedings, involving
personal property or the recovery of money and/or damages, in
which the value of the property or the amount of the demand is
decisive of the trial court's competence (aside from being the
basis for fixing the corresponding docket fees). 19

fee. And it is not divested of that authority by the circumstance


that it may not have acquired jurisdiction over the accompanying
claims for damages because of lack of specification thereof.
What should be done is simply to expunge those claims for
damages as to which no amounts are stated, which is what the
respondent Courts did, or allow, on motion, a reasonable time
for the amendment of the complaints so as to allege the precise
amount of each item of damages and accept payment of the
requisite fees therefor within the relevant prescriptive period.
WHEREFORE,
the
petition
pronouncement as to costs.

is

DISMISSED,

without

Fernan, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,


Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, GrioAquino, Medialdea and Regalado, JJ., concur.

Where the action is purely for the recovery of money or


damages, the docket fees are assessed on the basis of the
aggregate amount claimed, exclusive only of interests and costs.
In this case, the complaint or similar pleading should, according
to Circular No. 7 of this Court, "specify the amount of damages
being prayed for not only in the body of the pleading but also in
the prayer, and said damages shall be considered in the
assessment of the filing fees in any case."
Two situations may arise. One is where the complaint or similar
pleading sets out a claim purely for money or damages and
there is no precise statement of the amounts being claimed. In
this event the rule is that the pleading will "not be accepted nor
admitted, or shall otherwise be expunged from the record." In
other words, the complaint or pleading may be dismissed, or the
claims as to which the amounts are unspecified may be
expunged, although as aforestated the Court may, on motion,
permit amendment of the complaint and payment of the fees
provided the claim has not in the meantime become time-barred.
The other is where the pleading does specify the amount of
every claim, but the fees paid are insufficient; and here again,
the rule now is that the court may allow a reasonable time for
the payment of the prescribed fees, or the balance thereof, and
upon such payment, the defect is cured and the court may
properly take cognizance of the action, unless in the meantime
prescription has set in and consequently barred the right of
action.
Where the action involves real property and a related claim for
damages as well, the legal fees shall be assessed on the basis of
both (a) the value of the property and (b) the total amount of
related damages sought. The Court acquires jurisdiction over the
action if the filing of the initiatory pleading is accompanied by
the payment of the requisite fees, or, if the fees are not paid at
the time of the filing of the pleading, as of the time of full
payment of the fees within such reasonable time as the court
may grant, unless, of course, prescription has set in the
meantime. But where-as in the case at bar-the fees prescribed
for an action involving real property have been paid, but the
amounts of certain of the related damages (actual, moral and
nominal) being demanded are unspecified, the action may not
be dismissed. The Court undeniably has jurisdiction over the
action involving the real property, acquiring it upon the filing of
the complaint or similar pleading and payment of the prescribed

CIVIL PROCEDURE

AGUSTIN, E. P. | 29

Republic of the Philippines


SUPREME COURT
Manila

Conversion rate to peso

x 43_

TOTAL ..

P69,756,000.00
(roundoff)

THIRD DIVISION
G.R. No. 151242

Computation based on Rule 141:

June 15, 2005

PROTON PILIPINAS CORPORATION, AUTOMOTIVE


PHILIPPINES, ASEA ONE CORPORATION and AUTOCORP,
Petitioners,
vs.
BANQUE NATIONALE DE PARIS,1 Respondent.
DECISION
CARPIO MORALES, J.:
It appears that sometime in 1995, petitioner Proton Pilipinas
Corporation (Proton) availed of the credit facilities of herein
respondent, Banque Nationale de Paris (BNP). To guarantee the
payment of its obligation, its co-petitioners Automotive
Corporation Philippines (Automotive), Asea 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 agreements dated
June 4, 1996,3 January 14, 1997,4 and April 24, 1997.5
Under the terms of the trust receipt agreements, Proton would
receive imported passenger motor vehicles and hold them in
trust for BNP. Proton would be free to sell the vehicles subject to
the condition that it would deliver the proceeds of the sale to
BNP, to be applied to its obligations to it. In case the vehicles
are not sold, Proton would return them to BNP, together with all
the accompanying documents of title.

COURT

JDF

P 69,756,000.00

P 69.606.000.00

- 150,000.00

x .003

69,606,000.00

208,818.00

x .002

+ 450.00

139,212.00

P 209,268.00

+ 150.00
P 139,362.00
LEGAL
:

P139,362.00
+
209,268.00
P348,630.00

x 1% = P3,486.30

P 139,362.00
+
209,268.00
3,486.00

Allegedly, Proton failed to deliver the proceeds of the sale and


return the unsold motor vehicles.
Pursuant to the corporate guarantee, BNP demanded from
Automotive, Asea and Autocorp the payment of the amount of
US$1,544,984.406 representing Proton's total outstanding
obligations. These guarantors refused to pay, however. Hence,
BNP filed on September 7, 1998 before the Makati Regional Trial
Court (RTC) a complaint against petitioners praying that they be
ordered to pay (1) US$1,544,984.40 plus accrued interest and
other related charges thereon subsequent to August 15, 1998
until fully paid and (2) an amount equivalent to 5% of all sums
due from petitioners as attorney's fees.
The Makati RTC Clerk of Court assessed the docket fees which
BNP paid at P352,116.307 which was computed as follows:8

$ 844,674.07
171,120.53
529,189.80
$1,544,984.40
$ 77,249.22
TOTAL ..

CIVIL PROCEDURE

$1,622,233.62

P 352,116.30

- Total fees paid by the


plaintiff

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:

AGUSTIN, E. P. | 30

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 P
43.21 to US$1. In the absence of any office guide of the rate of

CIVIL PROCEDURE

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 = P43.00, the
exchange rate on September 7, 1998 when the complaint was
filed having been pegged at US $1 = P43.21. Thus, by
petitioners' computation, BNP's claim as of August 15, 1998 was
actually P70,096,714.72,24 not P69,756,045.66.
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

AGUSTIN, E. P. | 31

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).
Chief Justice

CLAUDIO

TEEHANKEE

(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

CIVIL PROCEDURE

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 v. Regional Trial Court of Tagum, Davao
del Norte27 where the Supreme Court held,
Where the action is purely for the recovery of money or
damages, the docket fees are assessed on the basis of the
aggregate amount claimed, exclusive only of interests
and costs.28 (Emphasis and underscoring supplied),
it made an overpayment.
When Tacay was decided in 1989, the pertinent rule applicable
was Section 5 (a) of Rule 141 which provided for the following:
SEC. 5. Clerks of Regional Trial Courts. - (a) For filing an action
or proceeding, or a permissive counter-claim or cross-claim not

AGUSTIN, E. P. | 32

arising out of the same transaction subject of the complaint, a


third-party complaint and a complaint in intervention and for all
services in the same, if the sum claimed, exclusive of
interest, of the value of the property in litigation, or the
value of the estate, is:

1.

Less
than
P
.

2.

P 5,000.00 or more but less than P


10,000.00

48.00

1.

Not more than

3.

P 10,000.00 or more but less than P


20,000.00 ..

64.00

2.

P 100,000.00, or more but not more


than P 150,000.00

600.00

4.

P 20,000.00 or more but less than P


40,000.00 ..

80.00

3.

For each P 1,000.00 in excess of P


150,000.00 .

5.00

5.

P 40,000.00 or more but less than P


60,000.00 ..

120.00

6.

P 60,000.00 or more but less than P


80,000.00 .

160.00

7.

P 80,000.00 or more but less than P


150,000.00

200.00

8.

And for each P 1,000.00 in excess of


P 150,000.00 .....

4.00

9.

When the value of the case cannot be


estimated

400.00

10.

11.

5,000.00

When the case does not concern


property
(naturalization,
adoption,
legal
separation, etc.) .....
In forcible entry and illegal detainer
cases
appealed
from
inferior
courts
.

P
32.00

(a) For filing an action or a permissive counterclaim or money


claim against an estate not based on judgment, or for filing with
leave of court a third-party, fourth-party, etc. complaint, or a
complaint in intervention, and for all clerical services in the
same, if the total sum claimed, inclusive of interest,
damages of whatever kind, attorney's fees, litigation
expenses, and costs, or the stated value of the property
in litigation, is:

64.00

40.00

If the case concerns real estate, the assessed value thereof shall
be considered in computing the fees.
In case the value of the property or estate or the sum claim is
less or more in accordance with the appraisal of the court, the
difference of fees shall be refunded or paid as the case may be.
When the complaint in this case was filed in 1998, however, as
correctly pointed out by petitioners, Rule 141 had been amended
by Administrative Circular No. 11-9429 which provides:
BY RESOLUTION OF THE COURT, DATED JUNE 28, 1994,
PURSUANT TO SECTION 5 (5) OF ARTICLE VIII OF THE
CONSTITUTION, RULE 141, SECTION 7 (a) AND (d), and
SECTION 8 (a) and (b) OF THE RULES OF COURT ARE HEREBY
AMENDED TO READ AS FOLLOWS:
RULE
LEGAL FEES
xxx
Sec. 7. Clerks of Regional Trial Courts

CIVIL PROCEDURE

141

100,000.00

P
400.00

xxx
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:

1.

Not
more
than
P
...

20,000.00

P
120.00

2.

More than P 20,000.00 but not more


than P 100,000.00 .

400.00

3.

More than P 100,000.00 but not more


than P 200,000.00

850.00

(Emphasis and underscoring supplied)


The clerk of court should thus have assessed the filing fee by
taking into consideration "the total sum claimed, inclusive of
interest, damages of whatever kind, attorney's fees, litigation
expenses, and costs, or the stated value of the property in
litigation." Respondent's and the Court of Appeals' reliance then
on Tacay was not in order.
Neither was, for the same reason, the Court of Appeals' reliance
on the 1989 case of Ng Soon v. Alday,30 where this Court held:
The failure to state the rate of interest demanded was
not fatal not only because it is the Courts which ultimately fix
the same, but also because Rule 141, Section 5(a) of the
Rules of Court, itemizing the filing fees, speaks of "the
sum claimed, exclusive of interest." This clearly implies
that the specification of the interest rate is not that
indispensable.
Factually, therefore, not everything was left to "guesswork" as
respondent Judge has opined. The sums claimed were
ascertainable, sufficient enough to allow a computation pursuant
to Rule 141, section 5(a).

AGUSTIN, E. P. | 33

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."
In other words, a final determination is still to be made by the
Court, and the fees ultimately found to be payable will either be
additionally paid by the party concerned or refunded to him, as
the case may be. The above provision clearly allows an initial
payment of the filing fees corresponding to the estimated
amount of the claim subject to adjustment as to what later may
be proved.
". . . there is merit in petitioner's claim that the third paragraph
of Rule 141, Section 5(a) clearly contemplates a situation where
an amount is alleged or claimed in the complaint but is less or
more than what is later proved. If what is proved is less than
what was claimed, then a refund will be made; if more,
additional fees will be exacted. Otherwise stated, what is subject
to adjustment is the difference in the fee and not the whole
amount" (Pilipinas Shell Petroleum Corp., et als., vs. Court of
Appeals, et als., G.R. No. 76119, April 10, 1989). 32 (Emphasis
and underscoring supplied)
Respecting the Court of Appeals' conclusion that the clerk of
court did not err when he applied the exchange rate of US $1 =
P43.00 "[i]n the absence of any office guide of the rate of
exchange which said court functionary was duty bound to
follow,[hence,] the rate he applied is presumptively correct," the
same does not lie. The presumption of regularity of the clerk of
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 = P43.21.
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.

CIVIL PROCEDURE

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

AGUSTIN, E. P. | 34

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.

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

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, 1998 42
and pay the corresponding docket fee therefor.

Associate Justice

CARPIO

MORALES

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

CIVIL PROCEDURE

AGUSTIN, E. P. | 35

Republic of the Philippines


SUPREME COURT
SECOND DIVISION
ADM. MATTER NO. RTJ-04-1848 October 25, 2005
(Formerly OCA I.P.I. No. 03-1804-RTJ)
Philippine Amusement and Gaming Corporation
(PAGCOR), represented by Atty. Carlos R. Bautista, Jr.,
Complainant,
vs.
HON. ROMULO A. LOPEZ, CHICO-NAZARIO,* Presiding
Judge, Branch 34, Regional Trial Court, Manila,
Respondent.
RESOLUTION
AUSTRIA-MARTINEZ, J.:
PAGCOR filed the instant administrative complaint against Judge
Romulo A. Lopez of the Regional Trial Court (RTC) of Manila,
Branch 34, seeking his dismissal from the service for alleged
gross ignorance of the law and for his disbarment for such
ignorance, violation of the lawyers oath and the Code of
Professional Responsibility.
The administrative complaint stemmed from the proceedings in
Civil Case No. 00-99133,1 entitled, Filipinas Gaming

Entertainment Totalizator Corporation (FILGAME) vs. PAGCOR,


Department of Interior and Local Government (DILG), and
Secretary Alfredo S. Lim, filed with the RTC of Manila and
assigned by raffle to Branch 34 presided by respondent Judge.
The antecedents and the pertinent proceedings that transpired
therein are as follows:

On June 17, 1999, PAGCOR entered into an Agreement with


FILGAME and BELLE Jai-Alai Corporation (BELLE) for the
resumption of the Jai-Alai operations in the country.2 FILGAME
and BELLE jointly agreed to provide funds, at no cost to
complainant, for pre-operating expenses and working capital.
PAGCOR shall manage, operate and control all aspects of the
Jai-Alai operations.
On October 19, 2000, the Office of the President of the
Philippines issued a Memorandum addressed to Alicia Ll. Reyes,
then PAGCOR Chairperson and Chief Executive Officer, directing
her to take immediate steps to close down all PAGCOR facilities
and outlets in Jai-Alai, on-line bingo and internet casino gaming.
On October 20, 2000, DILG, through then Secretary Alfredo S.
Lim, caused the closure of the Jai-Alai main fronton.
Thus, on November 6, 2000, FILGAME and BELLE filed the case
for Specific Performance and Injunction with prayer for Damages
and Temporary Restraining Order (TRO), and Writ of Preliminary
Injunction3 against PAGCOR, DILG and Secretary Alfredo Lim,
docketed as Civil Case No. 00-99133 and raffled to herein
respondent Judge.
On November 10, 2000, respondent issued a writ of temporary
restraining order effective for 20 days.

CIVIL PROCEDURE

On November 29, 2000, this Court rendered a decision in the


cases, entitled, Raoul B. Del Mar vs. PAGCOR, BELLE and
FILGAME and Federico S. Sandoval II and Michael T. Defensor
vs. PAGCOR,4 the decretal portion of which reads:
WHEREFORE, the petitions are GRANTED. Respondents
PAGCOR, Belle Jai-Alai Corporation and Filipinas Gaming
Entertainment Totalizator Corporation are enjoined from
managing, maintaining and operating jai-alai games, and from
enforcing the agreement entered into by them for that purpose.
Motions for Reconsideration filed by PAGCOR, BELLE and
FILGAME were subsequently denied.
Consequently, FILGAME and BELLE filed a Motion to Admit
Amended Complaint5 with the trial court where the cause of
action was changed, i.e., from Specific Performance to Recovery
of Sum of Money, inasmuch as plaintiffs could no longer ask for
specific performance of their agreement with complainant since
the Court had declared the agreement without force and effect.
Thus, FILGAME and BELLE sought to recover their pre-operating
expenses and/or investments totaling P1,562,145,661.87
including the goodwill money of P200,000,000.00 which they
allegedly invested with the complainant. Complainant filed an
opposition on the ground that there is a substantial change in
the complaint and cause of action.
On November 27, 2001, respondent issued an Order 6 admitting
the amended complaint and directing complainant and DILG to
file their answer.
Complainant filed a motion to dismiss the amended complaint7
on the ground that the trial court had not acquired jurisdiction
over the case for failure of the plaintiffs to pay the prescribed
docket fees considering that the docket fee originally paid was
only P1,212.00. It claimed that per the affidavit of Atty. Ma.
Concepcion Gloria,8 complainants representative, she attested to
the fact that as computed by the Docket Fee Assessor, the
amended complaint, which sought recovery of the
P1,562,145,661.87 including the P200,000,000 goodwill money,
should have docket fees of P15,775,903.68.
On June 19, 2002, respondent issued an Order9 denying
complainants motion to dismiss and directed it to file its answer.
Respondent judge made the following ratiocination:
Considering the parties arguments, this Court is of the opinion
and so holds that there is no basis for dismissing the amended
complaint since the original complaint was filed and the
corresponding docket fee was paid by the plaintiff, the Court had
acquired jurisdiction over the said complaint. Having done so,
and considering the rule for the payment of the docket fees set
forth in the Sun Insurance Office, Ltd. with respect to initiatory
pleadings, there is no firm ground to dismiss the Amended
Complaint.
Under the said ruling "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." If a
late payment of the docket fee is allowed in filing initiatory
pleading to vest jurisdiction to the Court, with more reason the
same leniency should be afforded in an amended
pleading/complaint which sets out additional/new cause of
action necessitating the increase of the docket fee. The plaintiff
is correct in not immediately paying the additional filing fee
before the amended complaint is admitted for why will it pay

AGUSTIN, E. P. | 36

when there is no assurance that the amended complaint will be


admitted.

administrative case because there was no longer any legal


impediment with the resolution of the certiorari case.

Once jurisdiction is acquired and vested in a Court, said Court


maintains its jurisdiction until judgment is had. (Aruego, Jr., et
al. vs. CA, 254 SCRA 711-719). Such acquired jurisdiction is not
lost by the amendment of a pleading that raises additional/new
cause(s) of action. The jurisdiction of a Court is not lost even if
additional docket fees are required by reason of the amendment.

Complainant charges respondent for gross ignorance of the law


and procedure in (1) admitting the amended complaint of
plaintiffs FILGAME and BELLE in Civil Case No. 00-99133 despite
the fact that (a) the amended complaint is a total change of
theory of the case; and (b) that the required filing fees for the
amended complaint were not paid; and (2) in rendering
summary judgment (a) despite the fact that respondent found
the existence of 13 factual issues to be resolved; (b) without
conducting a hearing on the motion for summary judgment; (c)
based on the alleged implied admission rather than on the
personal knowledge of witnesses and other affiants; and (d)
despite the fact that plaintiffs were estopped from denying the
existence of these 13 issues raised in the pre-trial order.

In the same ruling in Sun Insurance case, "any additional filing


(docket) fee shall constitute a lien on the judgment and that 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 provided that the cause of action has not
prescribed."
Moreover in Yuchengco vs. Republic, 333 SCRA 368, 381, the
Supreme Court even allowed the payment of the filing fees
beyond the prescriptive period.
Complainant then filed its Answer with compulsory
counterclaim.10 A pre-trial conference was conducted. On
October 10, 2002, respondent issued a Pre-trial Order and at the
same time directed the parties to submit their respective
comments and/or manifestations on the said order. The pre-trial
order listed 13 issues to be resolved.
During the October 25, 2002 hearing, FILGAME and BELLE
manifested their intention to file a Motion for Summary
Judgment which they subsequently filed. Complainant filed its
opposition thereto. Respondent did not conduct any hearing on
the motion for summary judgment.
On May 19, 2003, respondent rendered his decision by way of
Summary Judgment11 in favor of FILGAME and BELLE where
complainant was ordered to return and pay the sum of
P1,562,145,661.87, representing the amount of pre-operating
expenses and/or investment including the goodwill money given
by plaintiffs and the release of P500,000.00 cash bond posted in
support of the TRO.
On June 10, 2003, complainant filed its notice of appeal 12 which
was subsequently withdrawn.
On June 12, 2003, complainant filed with the Court of Appeals
(CA) a petition for certiorari seeking the annulment of the
respondents decision by way of summary judgment for having
been rendered without or in excess of jurisdiction and with grave
abuse of discretion.13
On July 8, 2003, complainant filed the present administrative
case charging respondent with gross ignorance of the law and
for violations of the Lawyers Oath and Code of Professional
Responsibility in connection with his actions in Civil Case No. 0099133.
In a Resolution dated January 26, 2004,14 we deferred action on
this complaint until the final resolution of the petition for
certiorari filed before the CA.
On January 21, 2004, a judgment by compromise agreement 15
was rendered by the CA in the certiorari case filed with it and an
entry of judgment was subsequently made. 16 Thereafter,
complainant sought the continuation of the pending

CIVIL PROCEDURE

Complainant contends that respondent denied its motion to


dismiss the amended complaint without requiring plaintiffs
FILGAME and BELLE to pay the correct docket fees within a
reasonable time from the admission of the amended complaint,
thus the court is deprived of its lawful docket fees in the amount
of P15,774,691.68; that respondents reliance on the third rule
enunciated in the Sun Insurance, i.e., allowing docket fee to
constitute as lien on the judgment, finds no application in the
civil case since the P1.5 Billion claim is not in the nature of an
award not specified in the pleading.
Complainant claims that respondent Judge was grossly ignorant
of the law when he disregarded the 13 factual issues
enumerated in his Pre-trial Order dated October 10, 2002 and
rendered a summary judgment on the case; that in rendering a
summary judgment, he disposed of the case with undue haste
thus depriving it of its day in court; that no hearing was
conducted by respondent for purposes of resolving FILGAME and
BELLEs motion for summary judgment as provided under
Section 3, Rule 35 of the Rules on Civil Procedure; that although
opposition, reply and rejoinder were submitted by the parties,
the same appeared to be inadequate considering the mandatory
nature of the summary hearing.
Complainant avers that respondent granted summary judgment
based on its alleged implied admissions when it failed to
specifically deny certain material allegations in the amended
complaint and other pleadings of FILGAME and BELLE; that such
is contrary to Section 5, Rule 35 and jurisprudence.
In his Comment, respondent denied having committed gross
ignorance of the law in admitting the amended complaint since
dismissal is not the consequence provided for in not paying the
right docket fee at the time the complaint or initiatory pleading is
filed; that the trial court acquires jurisdiction over a claim by the
filing of appropriate pleading and payment of the prescribed
filing fee but when subsequently the judgment awards a claim
not specified in the pleading, the additional filing fee therefor
shall constitute a lien on the judgment.
He argues that the grant of summary judgment despite the
existence of a list of issues in his Pre-trial Order dated October
10, 2002 was not even final and only listed issues or matters
which complainant refused to admit when counsel for BELLE and
FILGAME asked for stipulations; that the holding of a trial type
hearing is not absolutely indispensable for the court to rule on a
motion for summary judgment; that he granted the motion for
summary judgment not solely on the implied admissions made
by complainant but based on the evidence on record and that
complainants contention that plaintiffs are estopped from
challenging the list of issues in the Pre-trial Order is without

AGUSTIN, E. P. | 37

basis since plaintiffs had vigorously insisted for a summary


judgment.
Complainant filed a Reply where it claimed that because of
respondents undue haste in rendering summary judgment,
some of its evidence were suppressed.
Respondent filed his Rejoinder where he stated that in his Order
dated February 19, 2004, he required the payment of additional
docket fees on the amended complaint which was complied
with; that since it was the clerk of court who computed the
same, any deficiency can still be collected by issuing another
order. He denied the suppression of evidence since the alleged
evidence were not attached to its answer to the amended
complaint.
Complainant filed a Sur-rejoinder claiming that the additional
docket fees were based on the compromise agreement entered
by the parties in the CA in the amount of P120 million and not in
the amended complaint for recovery of money in the amount of
P1.56 billion.
In a Resolution dated September 15, 2004, 17 the Court referred
the case to Justice Noel G. Tijam of the CA for investigation,
report and recommendation.
The Investigating Justice submitted his Report recommending
the dismissal of the administrative and the disbarment complaint
against respondent for patent lack of merit, based on the
following findings:

Anent the issue on non-payment of docket fees on the amended


complaint Based on the evidence, the undersigned Investigator finds that
Respondent Judge did not commit gross ignorance of the law in
admitting the amended complaint. There is no evidence that the
respondent Judge acted in bad faith or was motivated by fraud,
dishonesty or corruption in issuing the assailed order.
It is a well-settled rule that once the jurisdiction of the court
attaches, it continues until the case is finally terminated. The
trial court cannot be ousted therefrom by subsequent
happenings of events, although of a character would have
prevented jurisdiction from attaching in the first instance.
The trial court validly acquired jurisdiction over the amended
complaint. In the case of PNOC Shipping and Transport Corp. vs.
CA, the Supreme Court ruled that the plaintiffs failure to pay the
docket fee corresponding to its increased claim for damages to
P600,000.00 under the amended complaint should not be
considered as having curtailed the lower courts jurisdiction.
Pursuant to the ruling in Sun Insurance Office, Ltd. vs. Asuncion,
the unpaid docket fee should be considered as a lien on the
judgment even though private respondent therein specified the
amount of P600,000.00 as its claim for damages in its amended
complaint. Besides, it is too late in the day to invoke lack of
jurisdiction because the case decided by the respondent Judge
elevated on appeal to the Court of Appeals has become final and
executory when PAGCOR voluntarily entered into a compromise
agreement in the Court of Appeals.
Respondent Judge did not deviate from the rules when he did
not dismiss the amended complaint for failure to pay the
additional docket fee because the court may still require the
same to be paid within a reasonable time and in no case beyond

CIVIL PROCEDURE

the prescriptive period. The timely payment of docket fees is


jurisdictional, but considerations of law and equity come into the
picture. Despite the jurisdictional nature on the rule on the
payment of the docket fee, the court still has discretion to relax
the rule in meritorious cases.
Furthermore, the undersigned Investigator agrees with
Respondent Judges argument that the assailed Order was
consistent with Sec. 3, Rule 10 of the Rules on Civil Procedure,
as amended and the ruling in the case of Pagubo vs. CA. Indeed,
although an amendment may substantially change or alter the
cause of action or defense, the same must serve the higher
interests of substantial justice, and prevent delay and equally
promote the laudable objective of the rules which is to secure a
"just, speedy and inexpensive disposition of every action and
proceedings."
Contrary to PAGCORs claim that Respondent Judge failed to
issue an order to collect the additional docket fees, the evidence
shows that Respondent Judge in fact issued an Order dated
February 19, 2004, directing the Clerk of Court of the RTC of
Manila to collect and require payment of docket fees within 15
days. The order was issued after the entry of judgment on a
compromise which automatically lifted the TRO which earlier
prevented the Respondent Judge from directing Belle and
Filgame to pay the additional fees. Moreover, at PAGCORs
instance, Respondent Judge issued another Order dated October
26, 2004 directing the Clerk of Court to recompute the docket
fee.

As to the claim that respondent judge rendered summary


judgment despite the 13 factual issues embodied in the Pre-trial
Order and that he did not find that plaintiffs are estopped from
denying these factual issues
Section 10 of Rule 8 of the Rules provides that if the defendant
is without knowledge or information sufficient to form a belief as
to the truth of the material averment in the complaint, he is
bound to so state and this shall have the effect of denial. In such
a case it is indispensable that the matter denied for lack of
knowledge is alleged be clearly set forth so that the adverse
party is informed of what is denied.
A scrutiny of the amended answer of PAGCOR in Civil Case No.
00-99133, shows that PAGCOR actually knows the gross and net
income from the Jai-Alai operations, the tax paid by PAGCOR
and the pre-operating expenses of Belle and Filgame.
Considering that the Agreement between PAGCOR and Filgame
and Belle provided that PAGCOR shall manage, operate and
control all aspects of Jai-Alai operation pursuant to its franchise,
it would have been unbelievable for them not to know the gross
and net income from the Jai-Alai operations from June 1999 to
December 2000; the tax paid by PAGCOR to BIR; and the effect
of Jai- Alai operations on the government revenues and where
the income of PAGCOR was used. Furthermore, Belle and
Filgame had furnished PAGCOR a copy of the amount of preoperating per request of PAGCOR as evidenced by a letter dated
September 15, 1999 of Edgardo M. del Fonso, President of Belle
Jai-Alai Corporation addressed to Renaldo Tenorio, President and
Chief Operating Officer of PAGCOR and the receipt of which was
not denied by PAGCOR.
PAGCORs blanket denial of the said allegations in the amended
complaint is ineffective because such facts are within PAGCORs
knowledge. Thus, said denial was properly treated as an
admission.

AGUSTIN, E. P. | 38

Indeed, in a similar case, PNB vs. Court of Appeals, the private


respondent therein denied the averments in the complaint
regarding the fact of withdrawal of $14,056.25 in PCIB-Cagayan
de Oro City Account No. 16087 and the surrounding
circumstances of said withdrawal. The private respondent,
however, admitted the averment in the complaint that he is the
sole signatory of the subject account. The Supreme Court
considered said denial as ineffective because such fact was
within the knowledge of the private respondent, being the sole
signatory to the said account. Private respondents denial was
consequently declared by the Supreme Court as equivalent to an
admission.
Respondent Judge, therefore, correctly granted the motion for
summary judgment based on the Agreement dated June 17,
1999 and the stipulation made by PAGCORs counsel, Atty.
Bautista, regarding the records of summary operations covering
the period of June 1999 to October 2000 being true and correct,
having been prepared by a responsible officer of PAGCOR and
based on the existing records of PAGCOR.
All told, based on the evidence, PAGCOR was privy to all the
material allegations in the amended complaint relating to the JaiAlai operations. It would have been incredulous for PAGCOR to
claim ignorance or lack of knowledge of said material allegations.
Convincingly, Respondent Judge had sufficient basis to render
summary judgment.

As to the claim that the summary judgment was rendered


without hearing Based on the evidence,we find that Respondent Judge did not
commit gross ignorance of the law in not conducting a trial type
hearing in resolving the motion for summary judgment. Wellsettled is the rule that, in proceedings for summary judgment,
the court is merely expected to act chiefly on the basis of what is
on the records of the case and that the hearing contemplated in
the Rules is not de riguer as its purpose is only to determine
whether the issues are genuine or not and not to receive
evidence on issues set up in the pleadings.
Based on the records and the evidence presented, the trial type
hearing on the motion was dispensable in view of the fact that
PAGCORs blanket/ineffective denial in its answer to the
amended complaint had the effect of an admission, thus, did not
raise any genuine issues. Furthermore, a hearing on the motion
for summary judgment was not necessary considering that the
evidence necessary for the resolution of the same was already
part of the records. It is evident from the records, particularly in
the minutes of the hearings held on November 22, 2002 and
February 10, 2003, as well as Respondent Judges Order issued
on even dates, that PAGCOR was given ample opportunity to be
heard and present its evidence in opposition to the motion for
summary judgment, but PAGCOR chose not to adduce any such
evidence. The scheduled hearing on the motion for summary
judgment was cancelled and the motion was considered
submitted for resolution without PAGCOR objecting on the
absence of a hearing. PAGCOR, therefore, cannot now insist that
Respondent Judge should have conducted a hearing on the
motion.

As to the claim that respondent Judge granted the summary


judgment based on complainants implied admissions It is a recognized rule in summary judgment that the trial court
can determine whether there is genuine issue on the basis of the

CIVIL PROCEDURE

pleadings, admissions, documents, affidavits, and/or counteraffidavits submitted by the parties. On the basis of this rule
PAGCOR cannot claim that Respondent Judge was grossly
ignorant of the law and procedure when he rendered summary
judgment based on implied admissions of the material facts in
the amended complaint and not on personal knowledge of
witnesses and other affiants. PAGCOR cannot rely solely on
Section 5, Rule 35 of the Rules of Court because the provision
pertains only to cases when affidavits and supporting papers are
submitted to establish whether there is genuine issue. Such
supporting affidavits must be made on personal knowledge.
Section 1, Rule 35 is explicit that the movant of the motion for
summary judgment can support his motion with affidavits,
depositions and admissions. It is illogical to claim that a motion
for summary judgment must be resolved based on affidavits
alone, considering that the Rules are clear that the motion can
likewise be supported by depositions and admissions.

As to complainants claim that respondent Judge should be


disbarred because he violated the laws, rules and legal principles
-

The complaint for violation of lawyers oath and Code of


Professional Responsibility is not meritorious.
The complaint for disbarment is unfounded. There was no gross
ignorance of the law and procedure committed by the
Respondent Judge. Considering the evidence presented,
Respondent Judge conducted the proceedings in accordance
with the applicable laws and procedure. To constitute gross
ignorance of the law, the judges actuation must not only be
contrary to law and jurisprudence, the judge must have also
been moved by bad faith, fraud, dishonesty or corruption. The
records are also bereft of any showing of bad faith, fraud,
dishonesty and corruption on the part of the Respondent Judge.
It is settled that in administrative proceedings, the complainant
has the burden of substantiating the charges asseverated in the
complaint. The complainant has the burden of proving the
allegations in the complaint with substantial evidence. In the
absence of evidence to the contrary, the presumption that
respondent has regularly performed his duties will prevail.
Applying the same in the case, PAGCOR failed to support its
allegations with substantial and competent evidence to warrant
the dismissal and disbarment of the Respondent Judge.
As a matter of policy, in the absence of fraud, dishonesty, and
corruption, the acts of the judge in his judicial capacity are not
subject of disciplinary action even though such acts are
erroneous. He cannot be subjected to liability civil, criminal, or
administrative for any of his official acts, no matter how
erroneous, as long as he acts in good faith. Only judicial errors
tainted with fraud, dishonesty, gross ignorance, bad faith or
deliberate intent to do an injustice will be administratively
sanctioned. To hold otherwise, would be to render the judicial
office untenable, for no one is called upon to try the facts or
interpret the law in the process of administering justice can be
infallible in his judgment.
Well-settled is the rule that, if a party is prejudiced by the orders
of a judge, his remedy lies with the proper court for proper
judicial action and not with the office of the Court Administrator
by means of an administrative complaint. It is an established
doctrine and policy that disciplinary proceedings and criminal
actions against judges are not complementary or suppletory of,
nor a substitute for, these judicial remedies, whether ordinary or
extraordinary. Resort to and exhaustion of these judicial
remedies, as well as entry of judgment in the corresponding

AGUSTIN, E. P. | 39

action or proceeding, is pre-requisite for the taking of other


measure against the person of the judges concerned. It is only
after the available judicial remedies have been exhausted and
the appellate court have spoken with finality, the door to an
inquiry into his criminal, civil and administrative liability may be
said to have opened or closed.

expenses and working capital, plaintiffs had to file an amended


complaint which seeks the recovery of their expenses. Although
the amended complaint substantially changed the cause of
action of plaintiffs FILGAME and BELLE, the admission thereof by
respondent is allowed under Section 3, Rule 10 and
jurisprudence.

Here, the administrative complaint was filed by the Complainant


pending the resolution of PAGCORs Petition for Certiorari filed
before the Court of Appeals. As such, the filing of this
administrative case was in disregard of the rules, if not
malicious. Indeed, Civil Case No. 0099133 has not been resolved
with finality at the time the administrative complaint was filed
with the Supreme Court. Also, a review of the records of the
case discloses the fact that counsels of PAGCOR were negligent
in handling their case. Clearly, this baseless administrative case
was filed merely to harass Respondent Judge in the hope that
the negligence of PAGCORs counsel would be conveniently
overlooked or unjustifiably mitigated.

The Court also finds that respondent was not guilty of gross
ignorance of the law when he admitted the amended complaint
despite the non-payment by plaintiffs FILGAME and BELLE of
additional docket fees on the amended complaint. In Sun
Insurance Office, Ltd. vs. Asuncion,19 the Court laid down the
rules on the payment of docket fees as follows:

The Court agrees with the findings and recommendation of the


Investigating Justice that the administrative complaint against
respondent be dismissed.
The Court finds no gross ignorance of law committed by
respondent when he admitted the amended complaint
notwithstanding that such amended complaint substantially
altered the cause of action of plaintiffs FILGAME and BELLE.
Section 3, Rule 10 of the Rules of Court, provides:
SECTION 3. Amendments by leave of court. Except as provided
in the next preceding section, substantial amendments may be
made only upon leave of court. But such leave may be refused if
it appears to the court that the motion was made with intent to
delay. Orders of the court upon the matters provided in this
section shall be made upon motion filed in court, and after
notice to the adverse party, and an opportunity to be heard.
As held in Valenzuela vs. CA,18
Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil
Procedure amended the former rule in such manner that the
phrase "or that the cause of action or defense is substantially
altered" was stricken-off and not retained in the new rules. The
clear import of such amendment in Section 3, Rule 10 is
that under the new rules, "the amendment may (now)
substantially alter the cause of action or defense." This
should only be true, however, when despite a substantial change
or alteration in the cause of action or defense, the amendments
sought to be made shall serve the higher interests of substantial
justice, and prevent delay and equally promote the laudable
objective of the rules which is to secure a "just, speedy and
inexpensive
disposition
of
every
action
and
proceeding.(emphasis supplied).
The original complaint filed by the plaintiffs was for specific
performance and injunction with prayer for damages and for
TRO and writ of preliminary injunction against complainant while
the amended complaint was for recovery of sum of money. Such
amendment to the original complaint was filed by plaintiffs
FILGAME and BELLE after the Supreme Court decision declared
that complainant could not enter into a joint agreement with
other corporations to operate the Jai-Alai, and that the
Agreement dated June 17, 1999 entered into between
complainant and the plaintiffs is null and void. However, since
plaintiffs had provided funds for complainants pre-operating

CIVIL PROCEDURE

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 subjectmatter 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.20
Respondent is correct in ruling in his Order dated June 19, 2002
that the court had jurisdiction over the amended complaint as it
had acquired jurisdiction over the case when the original
complaint was filed and the corresponding docket fee was paid
thereon. 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. Respondent also stated in the same order
that this Court in the Sun Insurance case had further declared
that "any additional filing (docket) fee shall constitute a lien on
the judgment and that 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 provided that the cause of
action has not prescribed."
In PNOC Shipping and Transport Corporation vs. CA,21 the Court
held:
With respect to petitioner's contention that the lower court did
not acquire jurisdiction over the amended complaint increasing
the amount of damages claimed to P600,000.00, we agree with
the Court of Appeals that the lower court acquired jurisdiction
over the case when private respondent paid the docket fee
corresponding to its claim in its original complaint. Its failure to
pay the docket fee corresponding to its increased claim for
damages under the amended complaint should not be
considered as having curtailed the lower court's jurisdiction.

AGUSTIN, E. P. | 40

Pursuant to the ruling in Sun Insurance Office, Ltd. (SIOL) v.


Asuncion, the unpaid docket fee should be considered as a lien
on the judgment even though private respondent specified the
amount of P600,000.00 as its claim for damages in its amended
complaint.22
Thus, the unpaid additional docket fees should be considered as
a lien on the judgment even though plaintiffs had specified the
amount of P1,562,145,661.87 in the prayer of the amended
complaint.
Moreover, the issue of jurisdiction for non-payment of additional
docket fees is deemed abandoned as there was neither a motion
for reconsideration nor a petition questioning such Order filed by
complainant. In fact, when the amended complaint was admitted
and respondent directed complainant to file its answer, the latter
filed its Answer with compulsory counterclaim and without
questioning the jurisdiction of the trial court on the ground of
insufficient payment of docket fees. Complainant even invoked
the courts authority when it asked for affirmative relief on its
counterclaim, thus it is estopped from challenging the courts
jurisdiction.23
Moreover, as observed by the Investigating Justice, "it is too late
in the day to invoke lack of jurisdiction because the civil case
decided by the respondent which was elevated on appeal to the
CA has become final and executory when complainant voluntarily
entered into a compromise agreement in the CA."24 Thus, the
issues raised in the petition for certiorari were not actually
resolved. Thus, it becomes necessary for the Court to determine
in the present administrative case whether or not respondent is
guilty of gross ignorance of the law.
Respondent, in his Order dated February 19, 2004, after the
entry of judgment on the compromise agreement, directed
plaintiffs BELLE and FILGAME to cause the computation of the
additional docket on the amended complaint, of which the Clerk
of Court of Manila is directed to collect. Plaintiffs paid the
amount of P1,058,732.48. However, it appeared that based on
the affidavit of the collecting agent, she assessed the docket
fees based on the judgment on the compromise which was
presented to her by the plaintiffs and not on the amended
complaint as stated in the respondents Order dated February
19, 2004, thus docket fees collected were still insufficient. If the
amount of docket fees paid is insufficient considering the
amount of the claim, the clerk of court of the lower court
involved or his duly authorized deputy has the responsibility of
making a deficiency assessment,25 thus it is no longer the fault
of respondent when there was a mistake in the assessment.
However, when the matter was brought to the attention of
respondent by complainant in its sur-rejoinder in this
administrative complaint, respondent called the attention of the
clerk of court where she was asked to recompute the same so
that proper order can be issued.26 Respondent, on November 18,
2004, issued another Order based on the compliance report
submitted by the Clerk of Court that plaintiffs have still to pay
the amount of P14,717,171.19 based on the claim in the
amended complaint by directing the plaintiffs to pay within 15
days from receipt. These actuations of respondent are in
accordance with the Sun Insurance case.
Anent complainants claim that respondent was grossly ignorant
of the law in rendering summary judgment (a) based on implied
admissions; (b) notwithstanding the 13 factual issues embodied
in respondents Pre-Trial Order dated October 10, 2002; and (c)
without conducting a trial, the Court finds that these alleged
errors committed by respondent pertained to the performance of
his adjudicative functions.

CIVIL PROCEDURE

In Maquiran vs. Grageda,27 we held:


As everyone knows, the law provides ample judicial remedies
against errors or irregularities being committed by a Trial Court
in the exercise of its jurisdiction. The ordinary remedies against
errors or irregularities which may be regarded as normal in
nature (i.e., error in appreciation or admission of evidence, or in
construction or application of procedural or substantive law or
legal principle) include a motion for reconsideration (or after
rendition of judgment or final order, a motion for new trial), and
appeal. The extraordinary remedies against error or irregularities
which may be deemed extraordinary in character (i.e.,
whimsical, capricious, despotic exercise of power or neglect of
duty, etc.) are, inter alia, the special civil action of certiorari,
prohibition or mandamus, or a motion for inhibition, a petition
for change of venue, as the case may be.
Now, the established doctrine and policy is that disciplinary
proceedings and criminal actions against Judges are not
complementary or suppletory of, nor a substitute for, these
judicial remedies, whether ordinary or extraordinary. Resort to
and exhaustion of these judicial remedies, as well as the entry of
judgment in the corresponding action or proceeding, are prerequisites for the taking of other measures against the persons
of the judges concerned, whether of civil, administrative, or
criminal nature. It is only after the available judicial remedies
have been exhausted and the appellate tribunals have spoken
with finality, that the door to an inquiry into his criminal, civil, or
administrative liability may be said to have opened, or closed.
Law and logic decree that "administrative" or criminal
remedies are neither alternative nor cumulative to judicial review
where such review is available, and must wait on the result
thereof'. Indeed, since judges must be free to judge, without
pressure or influence from external forces or factors, they should
not be subject to intimidation, the fear of civil, criminal or
administrative sanctions for acts they may do and dispositions
they may make in the performance of their duties and functions;
and it is sound rule, which must be recognized independently of
statute, that judges are not generally liable for acts done within
the scope of their jurisdiction and in good faith; and that
exceptionally, prosecution of the judge can be had only if "there
be a final declaration by a competent court in some appropriate
proceeding of the manifestly unjust character of the challenged
judgment or order, and ** also evidence of malice or bad faith,
ignorance of inexcusable negligence, on the part of the judge in
rendering said judgment or order" or under the stringent
circumstances set out in Article 32 of the Civil Code.
Considering that the resolution of these issues was foreclosed
when the parties entered into a compromise agreement in the
petition for certiorari involving said issues, the Court, in the
present administrative case, will not and cannot resolve the
same for obvious reason. The least that the Court can do, under
the circumstances, is to determine whether respondent may be
held administratively liable for rendering the summary judgment.
The 13 issues which were embodied in the Pre-trial Order of the
respondent judge are as follows:
1. Whether or not plaintiffs incurred the total expenses of
P1,562,145,661.87;
2. Whether or not PAGCOR as a result of the expenditures which
FILGAME and Belle agreed to bear PAGCOR earned
P200,000,000.00 goodwill money and a net income of
P197,000,000.00;

AGUSTIN, E. P. | 41

3. Whether or not plaintiffs have only jointly earned


P173,000,000.00 or barely 9% of their total investment of P1.56
Billion;
4. Whether or not PAGCORs Jai- Alai operations generated gross
earnings in the aggregate amount of P2,826,947,353.00 from
June of 1999 to November 30, 2000;
5. Whether or not the average earnings for that period is
P157,052,630.73 per month for that same period;
6. Whether or not from the period from June 1999 to November
30, 2000 PAGCOR realized a net income of P199,738,755.31;
7. Whether or not from the period of June 1999 to November
30, 2000 PAGCOR remitted the amount of P262,470,808.71 to
the BIR;
8. Whether or not with the reactivation of Jai-Alai operations no
revenues were generated by the Philippine government;
9. Whether or not PAGCORs earnings from Jai-Alai operations
contributed immensely not only in terms of boosting
governments coffers but directly funding socio-economic
projects;
10. Whether or not Belle and FILGAME relying on the
representations made by PAGCOR, the OGCC and the
Department of Justice have at all times faithfully complied with
their obligations and undertakings with the end in mind that they
will be able to recover their investment and earn a responsible
return thereon before the expiration of the agreement between
Belle and PAGCOR on the year 2008;
11. Whether or not Belle and FILGAME made its massive
investment of financial and physical capital worth approximately
P1.56 Billion relying upon PAGCORs representation and the
Philippine governments categorical and official representation
through the OGCC and Department of Justice that it was legal
for Belle and FILGAME to recover its investment and profit
through sharing in the income form (sic) an ongoing and legally
sanctioned Jai-Alai operation carried on by PAGCOR under and in
accordance with the June 17, 1999 agreement between plaintiffs
and PAGCOR;
12. Whether or not PAGCOR closed the Jai-Alai operations before
the finality of the resolution on June 19, 2001 and without legal
basis;
13. Whether or not PAGCOR may be required to pay Belle and
FILGAME by way of quantum meruit compensation for the use of
facilities and network provided to PAGCOR, and for the services
and technical know how already put to service of PAGCOR and
the government for the years 1999 to 2000 based on the
expected return of investment of Belle and FILGAME and the
projected income of PAGCOR for the period ending in 2008.28
A perusal of these issues convinces us that issues no. 1 and no.
13 are genuine issues which necessitate the presentation of
evidence so as to establish plaintiffs FILGAME and BELLEs action
for the recovery of the sum of P1.56 Billion. The Court finds that
respondent erred in rendering the summary judgment, however,
respondent could not be held administratively liable. To justify
the taking of drastic disciplinary action, the law requires that the
error or mistake of the judge must be gross or patent, malicious,

CIVIL PROCEDURE

deliberate or in bad faith.29 These are not present in the instant


case. The Investigating Justice finds, and the Court agrees, that
there is no evidence showing that respondent acted with malice
in rendering the summary judgment. This is bolstered by the fact
that a judgment by compromise agreement was already
rendered by the CA on the civil case and an entry of judgment
was subsequently made.
Moreover, the Court finds that respondent had meticulously
explained why he found no genuine issue as to the fact that
plaintiffs are entitled to the recovery of their investments, to wit:
a. The provisions of the June 17, 1999 Agreement between
PAGCOR, BELLE and FILGAME (Exh "1") which gave PAGCOR the
power to manage/operate and control all aspects of Jai-Alai
operation, and the duty to both maintain separate accounts,
ledgers and other records and to render periodic accounting and
financial reports relative to Jai-Alai operation.
b. The fact that the Managing Head for Finance of PAGCORs JaiAlai Department, Mrs. Esther H. Reyes, not only testified that it
was part of her job to make financial reports to management,
but was able to produce both records of the daily gross receipts
of Jai-Alai operations for September 2000 and October, 2000
and summaries of the results of those operations from June
1999 to October 2000.
c. The fact that PAGCOR counsel, Atty. Carlos R. Bautista, Jr.
categorically stipulated that the records of daily gross receipts
and summaries of operations produced by Mrs. Esther H. Reyes
are genuine and prepared by the corresponding Jai-Alai
Department of PAGCOR based on PAGCORs records.
d. The fact that FILGAMESs Mr. Cesar Marcelo testified that
PAGCOR required BELLE and FILGAME to submit valuations of
the properties contributed by it to the Jai-Alai operations and
that FILGAME in compliance submitted an appraisal report
prepared by Cuervo Appraisers, Inc. while BELLE complied by
submitting as an attachment to a letter dated September 15,
1999 to PAGCOR President Mr. Reynaldo Y. Tenorio an inventory
listing the value of the assets contributed by BELLE and
FILGAME to the Jai-Alai operation.30
We reiterate the rule that not every error or mistake that a judge
commits in the performance of his duties renders him liable,
unless he is shown to have acted in bad faith or with deliberate
intent to do an injustice. Good faith and absence of malice,
corrupt motives or improper considerations are sufficient
defenses in which a judge charged with ignorance of the law can
find refuge.31
Anent the claim that there was no hearing conducted on the
motion for summary judgment, the same was with the
acquiescence of PAGCORs counsel. The records show that the
motion for summary judgment was set for hearing by plaintiffs
on December 1, 2002, i.e., 11 days from service of the motion
as required by the Rules. In the Order dated November 22, 2000
respondent granted PAGCORs prayer to be given 20 days to
submit comment/opposition to the motion for summary
judgment to copy furnish plaintiffs counsel who is then given 7
days to file his reply and for PAGCOR to file a rejoinder. The
same order states that thereafter the pending incident shall be
considered submitted for resolution. Complainant did not ask for
a hearing or any additional relief. It evidently agreed to the
respondents order that upon submission of those pleadings, the
incident would be submitted for resolution. The signature of
complainants counsel affixed in the minutes showed his

AGUSTIN, E. P. | 42

agreement thereto. In fact, in the Order dated February 10,


2003, the respondent declared that both parties agreed that the
motion and the subsequent pleadings filed are submitted for
resolution. Again, complainants counsel never registered his
objections thereto as he in fact affixed his signature to the
minutes thereof. In Ley Construction and Development
Corporation vs. Union Bank of the Philippines,32 the Court held:
Admittedly, there is nothing in the records which indicates that
Judge Arcangel conducted a hearing before he resolved
respondents motion for summary judgment. Nevertheless as
explained in Carcon Development Corporation v. Court of
Appeals, in proceedings for summary judgment, the court is
merely expected to act chiefly on the basis of what is in the
records of the case and that the hearing contemplated in the
Rules is not de riguer as its purpose is merely to determine
whether the issues are genuine or not, and not to receive
evidence on the issues set up in the pleadings.33
Considering the foregoing, there exists no valid ground for the
disbarment of respondent.
WHEREFORE, the instant administrative complaint against
respondent Judge Romulo A. Lopez is DISMISSED.
SO ORDERED.

CIVIL PROCEDURE

AGUSTIN, E. P. | 43

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 165147

respective Insurance Policies by paying to [it] jointly and


severally, the claims arising from the subject losses.
THAT, [herein petitioners] be adjudged jointly and severally to
pay to [it], in addition to the foregoing, the following:

July 9, 2008

PHILIPPINE FIRST INSURANCE CO., INC. and


PARAMOUNT GENERAL INSURANCE CORPORATION,
Petitioners,
vs.
PYRAMID LOGISTICS AND TRUCKING CORPORATION
(formerly PANACOR INTEGRATED WAREHOUSING AND
TRUCKING CORPORATION), Respondent.
DECISION
CARPIO MORALES, J.:
The issue, in the main, in the present case is whether
respondent, Pyramid Logistics and Trucking Corporation
(Pyramid), which filed on November 7, 2001 a complaint,1
denominated as one for specific performance and damages,
against petitioners Philippine First Insurance Company, Inc.
(Philippine First) and Paramount General Insurance Corporation
(Paramount) before the Regional Trial Court (RTC) of Makati,
docketed as Civil Case No. 01-1609, paid the correct docket fee;
if in the negative, whether the complaint should be dismissed or
Pyramid can still be ordered to pay the fee.
Pyramid sought to recover the proceeds of two insurance
policies issued to it, Policy No. IN-002904 issued by petitioner
Paramount, and Policy No. MN-MCL-HO-00-0000007-00 issued
by petitioner Philippine First. Despite demands, petitioners
allegedly failed to settle them, hence, it filed the complaint
subject of the present petition.
In its complaint, Pyramid alleged that on November 8, 2000, its
delivery van bearing license plate number PHL-545 which was
loaded with goods belonging to California Manufacturing
Corporation (CMC) valued at PESOS NINE HUNDRED SEVEN
THOUSAND ONE HUNDRED FORTY NINE AND SEVEN/100
(P907,149.07) left the CMC Bicutan Warehouse but the van,
together with the goods, failed to reach its destination and its
driver and helper were nowhere to be found, to its damage and
prejudice; that it filed a criminal complaint against the driver and
the helper for qualified theft, and a claim with herein petitioners
as co-insurers of the lost goods but, in violation of petitioners
undertaking under the insurance policies, they refused without
just and valid reasons to compensate it for the loss; and that as
a direct consequence of petitioners failure, despite repeated
demands, to comply with their respective undertakings under
the Insurance Policies by compensating for the value of the lost
goods, it suffered damages and was constrained to engage the
services of counsel to enforce and protect its right to recover
compensation under said policies, for which services it obligated
itself to pay the sum equivalent to twenty-five (25%) of any
amount recovered as and for attorneys fees and legal
expenses.2
Pyramid thus prayed
. . . that after due proceedings, judgment be rendered, ordering
[herein petitioners] to comply with their obligation under their

CIVIL PROCEDURE

1. The sum of PHP 50,000.00 plus PHP 1,500.00 for


each Court session attended by counsel until the
instant [case] is finally terminated, as and for
attorneys fees;
2. The costs of suit[;]3 (Underscoring supplied)
and for other reliefs just and equitable in the premises. 4
Pyramid was assessed P610 docket fee, apparently on the basis
of the amount of P50,000 specified in the prayer representing
attorneys fees, which it duly paid.5
Pyramid later filed a 1st Amended Complaint6 containing minor
changes in its body7 but bearing the same prayer.8 Branch 148
of the Makati RTC to which the complaint was raffled admitted
the Amended Complaint.9
Petitioners filed a Motion to Dismiss on the ground of, inter alia,
lack of jurisdiction, Pyramid not having paid the docket fees in
full, arguing thus:
xxxx
In the body of the Amended Complaint, plaintiff alleged that the
goods belonging to California Manufacturing Co., Inc. (CMC) is
[sic] "valued at Php907,149.07" and consequently, "plaintiff
incurred expenses, suffered damages and was constrained to
engage the services of counsel to enforce and protect its right to
recover compensation under the said policies and for which
services, it obligated itself to pay the sum equivalent to twentyfive (25%) of any recovery in the instant action, as and for
attorneys fees and legal expenses".
On the other hand, in the prayer in the Complaint, plaintiff
deliberately omitted to specify what these damages are. x x x
xxxx
Verily, this deliberate omission by the plaintiff is clearly intended
for no other purposes than to evade the payment of the correct
filing fee if not to mislead the docket clerk, in the assessment of
the filing fee. In fact, the docket clerk in the instant case
charged the plaintiff a total of Php610.00 only as a filing fee,
which she must have based on the amount of Php50,000.00
[attorneys fees] only.10 (Emphasis in the original; italics and
underscoring supplied)
Petitioners cited11 Manchester Development Corporation v. Court
of Appeals12 which held:
x x x [A]ll 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 or admitted, or shall

AGUSTIN, E. P. | 44

otherwise be expunged from the record.13 (Emphasis and


underscoring supplied)
They cited too Sun Insurance Office, Ltd. v. Asuncion14 which
held that "[i]t is not simply the filing of the complaint or
appropriate pleading, but the payment of the prescribed docket
fee, that vests a trial court with jurisdiction over the subjectmatter or nature of the action."15
Petitioners thus concluded:

Petitioners did indeed eventually file before the Court of Appeals


a Petition for Certiorari (With Preliminary Injunction and Urgent
Prayer for Restraining Order)26 posing the following two of three
queries, viz:
First. Does [Pyramids] deliberate omission to pay the required
correct docket and filing fee vest the trial court [with] jurisdiction
to entertain the subject matter of the instant case?
Second. [Is] the instant case an action for specific performance
or simply one for damages or recovery of a sum of money?

With the above cases as a backdrop, the Supreme Court, in


revising the rules of pleading and practice in the 1997 Rules of
Civil Procedure, added a tenth ground to a Motion to Dismiss
to wit, "[t]hat a condition precedent for filing claim [sic] has not
been complied with.["]
On the contrary, if plaintiff would insist that its claim against the
defendants is only Php50,000.00 plus Php 1,500.00 as
appearance fee per court hearing, then it follows that it is the
Metropolitan Trial Court which has jurisdiction over this case, not
this Honorable Court. Such amount is way below the minimum
jurisdictional amount prescribed by the rules in order to confer
jurisdiction to the Regional Trial Court.16 (Underscoring supplied)
17

To the Motion to Dismiss Pyramid filed its Opposition, alleging


that if there was a mistake in the assessment of the docket fees,
the trial court was not precluded from acquiring jurisdiction over
the complaint as "it has the authority to direct the mistaken
party to complete the docket fees in the course of the
proceedings . . ."18 The Opposition merited a Reply19 from
petitioners.
By Order of June 3, 2002, the trial court 20 denied the Motion to
Dismiss in this wise:
xxxx
Indeed, a perusal of the Complaint reveals that while plaintiff
made mention of the value of the goods, which were lost, the
prayer of plaintiff did not indicate its exact claim from the
defendants. The Complaint merely prayed defendants "to comply
with their obligation under their respective insurance policies by
paying to plaintiff jointly and severally, the claims arising from
the subject losses" and did not mention the amount of
PHP907,149.07, which is the value of the goods and which is
also the subject of insurance. This resulted to the assessment
and payment of docket fees in the amount of P610 only. The
Court, even without the Motion to Dismiss filed by defendant,
actually noted such omission which is actually becoming a
practice for some lawyers. For whatever purpose it may be, the
Court will not dwell into it. In this instant case, this being for
specific performance, it is not dismissible on that ground but
unless proper docket fees are paid, the Court can only grant
what was prayed for in the Complaint.
x x x x21 (Emphasis and underscoring supplied)
Petitioners Motion for Reconsideration22 of the denial of their
Motion to Dismiss having been denied23 by Order of August 1,
2002, they filed their Answer with Compulsory Counterclaim ad
Cautelam,24 alleging that they intended to file a Petition for
Certiorari with the Court of Appeals.25

x x x x27
By Decision of June 3, 2004,28 the Court of Appeals partially
granted petitioners petition for certiorari by setting aside the
trial judges assailed orders and ordering Pyramid to file the
correct docket fees within a reasonable time, it holding that
while the complaint was denominated as one for specific
performance, it sought to recover from petitioners Pyramids
"claims arising from the subject losses." The appellate court
ratiocinated:
xxxx
Indeed, it has been held that "it is not simply the filing of the
complaint or appropriate initiatory pleading, but the payment of
the prescribed docket fee that vests a trial court with jurisdiction
over the subject matter or nature of the action." To determine
the docket fees, it is necessary to determine the true nature of
the action by examining the allegations of the complaint. x x x
xxxx
While the captions of the complaint and 1st amended complaint
denominated the case as one for "Specific Performance and
Damages", the allegations and prayer therein show that the
specific performance sought by private respondent was for
petitioners to "comply with their obligation under their respective
Insurance Policies by paying to plaintiff jointly and severally, the
claims arising from the subject losses" as well as the attorneys
fees and costs of suit. Obviously, what constitutes specific
performance is the payment itself by petitioners of private
respondents claims arising from the losses it allegedly incurred.
x x x29
xxxx
Public respondent should have ordered private respondent to
pay the correct docket fees on the basis of the allegations of the
complaint. x x x
xxxx
While it has been held in Manchester Development Corporation
vs. Court of Appeals x x x that "any pleading that fails to comply
with this requirement of specifying the amount of damages not
only in the body of the pleading but also in the prayer shall not
be accepted nor admitted, or shall otherwise be expunged from
the record," this rule was relaxed in subsequent cases, wherein
payment of the correct docket fees was allowed within a
reasonable time. . .
x x x x30 (Emphasis and underscoring supplied)

CIVIL PROCEDURE

AGUSTIN, E. P. | 45

Thus the appellate court disposed:


WHEREFORE, the petition is partially granted. The Orders dated
June 3, 2002 and August 1, 2002 of public respondent are
partially set aside insofar as they dispensed with the payment of
the correct docket fees. Consequently, [Pyramid] is hereby
directed to pay the correct docket fees on the basis of the losses
alleged in the body of the complaint, plus the attorneys fees
mentioned in the prayer, within a reasonable time which should
not go beyond the applicable prescriptive or reglementary
period. In all other respects, the said Orders are affirmed.31
(Underscoring supplied)
Petitioners filed a Motion for Reconsideration32 of the appellate
courts decision. Pyramid filed its Comment and Opposition to
the Motion for Reconsideration,33 arguing thus:
xxxx
In the present case, [Pyramid] thru its Complaint simply sought
from petitioners compliance with their contractual undertaking as
insurers of the goods insured which were lost in [its] custody.
Private respondent did not specify the extent of petitioners
obligation as it left the matter entirely in the judgment of the
trial court to consider. Thus, the Complaint was labeled "Specific
Performance" which [Pyramid] submitted to the Clerk of Court
for assessment of the docket fee, after which, it paid the same
based on the said assessment. There was no indication
whatsoever that [Pyramid] had refused to pay; rather, it merely
argued against petitioners submissions as it maintained the
correctness of the assessment made.34 (Underscoring supplied)
By Resolution of August 23, 2004, the Court of Appeals denied
petitioners Motion for Reconsideration;35 hence, the present
Petition for Review on Certiorari,36 raising the issues of whether
the appellate court erred:
. . . WHEN IT APPLIED IN THE INSTANT CASE THE LIBERAL
RULE ENUNCIATED IN SUN INSURANCE OFFICE, LTD. (SIOL)
VS. ASUNCION, 170 SCRA 274 AND NATIONAL STEEL
CORPORATION VS. COURT OF APPEALS, 302 SCRA 523 (1999)
IN RESPECT TO THE PAYMENT OF THE PRESCRIBED FILING
AND DOCKET FEES DESPITE CLEAR SHOWING OF
RESPONDENTS INTENTION TO EVADE THE PAYMENT OF THE
CORRECT DOCKET FEE WHICH WARRANTS THE APPLICATION
OF THE DOCTRINE LAID DOWN IN MANCHESTER
DEVELOPMENT CORPORATION VS. COURT OF APPEALS, 149
SCRA 562.
. . . WHEN IT DID NOT APPLY THE RULING OF THIS
HONORABLE TRIBUNAL IN MARCOPPER MINING CORPORATION
VS. GARCIA, 143 SCRA 178, TAN VS. DIRECTOR OF FORESTRY,
125 SCRA 302, AND CHINA ROAD AND BRIDGE CORPORATION
VS. COURT OF APPEALS, 348 SCRA 401. 37 (Underscoring
supplied)
Petitioners invoke the doctrine in Manchester Development
Corporation v. Court of Appeals38 that a pleading which does not
specify in the prayer the amount sought shall not be admitted or
shall otherwise be expunged, and that the court acquires
jurisdiction only upon the payment of the prescribed docket
fee.39
Pyramid, on the other hand, insists, in its Comment on the
Petition,40 on the application of Sun Insurance Office, Ltd. (SIOL)
v. Asuncion41 and subsequent rulings relaxing the Manchester

CIVIL PROCEDURE

ruling by allowing payment of the docket fee within a reasonable


time, in no case beyond the applicable prescriptive or
reglementary period, where the filing of the initiatory pleading is
not accompanied by the payment of the prescribed docket fee. 42
In Tacay v. Regional Trial Court of Tagum, Davao del Norte, 43
the Court clarified the effect of the Sun Insurance ruling on the
Manchester ruling as follows:
As will be noted, the requirement in Circular No. 7 [of this Court
which was issued based on the Manchester ruling44 ] that
complaints, petitions, answers, and similar pleadings should
specify the amount of damages being prayed for not only in the
body of the pleading but also in the prayer, has not been
altered. What has been revised is the rule that subsequent
"amendment of the complaint or similar pleading will not thereby
vest jurisdiction in the Court, much less the payment of the
docket fee based on the amount sought in the amended
pleading," the trial court now being authorized to allow payment
of the fee within a reasonable time but in no case beyond the
applicable prescriptive period or reglementary period. Moreover,
a new rule has been added, governing the awards of claims not
specified in the pleading i.e., damages arising after the filing of
the complaint or similar pleading as to which the additional
filing fee therefore shall constitute a lien on the judgment.
Now, under the Rules of Court, docket or filing fees are assessed
on the basis of the "sum claimed," on the one hand, or the
"value of the property in litigation or the value of the estate," on
the other. . .
Where the action is purely for the recovery of money or
damages, the docket fees are assessed on the basis of the
aggregate amount claimed, exclusive only of interests and costs.
In this case, the complaint or similar pleading should, according
to Circular No. 7 of this Court, "specify the amount of damages
being prayed for not only in the body of the pleading but also in
the prayer, and said damages shall be considered in the
assessment of filing fees in any case."
Two situations may arise. One is where the complaint or similar
pleading sets out a claim purely for money and damages and
there is no statement of the amounts being claimed. In this
event the rule is that the pleading will "not be accepted nor
admitted, or shall otherwise be expunged from the record." In
other words, the complaint or pleading may be dismissed, or the
claims as to which amounts are unspecified may be expunged,
although as aforestated the Court may, on motion, permit
amendment of the complaint and payment of the fees provided
the claim has not in the meantime become time-barred. The
other is where the pleading does specify the amount of every
claim, but the fees paid are insufficient; and here again, the rule
now is that the court may allow a reasonable time for the
payment of the prescribed fees, or the balance thereof, and
upon such payment, the defect is cured and the court may
properly take cognizance of the action, unless in the meantime
prescription has set in and consequently barred the right of
action.45 (Emphasis and underscoring supplied)
Indeed, Pyramid captioned its complaint as one for "specific
performance and damages" even if it was, as the allegations in
its body showed, seeking in the main the collection of its claimssums of money representing losses the amount of which it, by
its own admission, "knew."46 And, indeed, it failed to specify in
its prayer in the complaint the amount of its claims/damages.

AGUSTIN, E. P. | 46

When Pyramid amended its complaint, it still did not specify, in


its prayer, the amount of claims/damages it was seeking. In fact
it has the audacity to inform this Court, in its Comment on the
present Petition, that
x x x In the natural order of things, when a litigant is given the
opportunity to spend less for a docket fee after submitting his
pleading for assessment by the Office of the Clerk of Court, he
would not decline it inasmuch as to request for a higher
assessment under the circumstances [for such] is against his
interest and would be senseless. Placed under the same
situation, petitioner[s] would certainly do likewise. To say
otherwise would certainly be dishonest,47
which comment drew petitioners to conclude as follows:
[This] only shows respondents dishonesty and lack of regard of
the rules. Following this line of reasoning, respondent would do
everything if only for it to spend less for the filing fee, even to
the extent of circumventing and defying the rule on the payment
of the filing fee.
In spite of the fact that the respondent was already caught in
the quagmire of its own cobweb of deception, it further justified
its unethical act by ratiocinating that "placed under the same
situation, petitioner would certainly do likewise, to say otherwise
would certainly be dishonest". This attitude of the respondent is
very alarming! Having been caught red-handed, the honorable
thing that respondent should have done is admit its own
violation rather than justify an act which it knows is a clear
contravention of the rules and jurisprudence.48 (Italics and
emphasis in the original)
Pyramids following justification for omitting to specify in the
prayer of its complaint the amount of its claims/damages, viz:
xxxx
x x x While respondent knew its losses and alleged them in the
body of the Complaint, it was not aware of the extent of
petitioners respective liability under the two insurance
policies. The allegation of respondents losses, albeit, without
repeating them in its prayer for relief was not motivated by an
intention to mislead, cheat or defraud the Court. It just left the
matter of liability arising from two separate and distinct
Insurance Policies covering the same insurable risk for the trial
courts determination, hence, respondent came up with an action
for "specific performance[,]"49 (Emphasis and underscoring
supplied)

Apparently, the trial court misinterpreted paragraph 3 of the


[Sun Insurance] ruling of this Court wherein it stated that
"where the judgment awards a claim not specified in the
pleading, or if specified, the same has been left for the
determination of the court, the additional filing fee therefor shall
constitute a lien on the judgment" by considering it to mean that
where in the body and prayer of the complaint there is a prayer
xxx the amount of which is left to the discretion of the Court,
there is no need to specify the amount being sought, and that
any award thereafter shall constitute a lien on the judgment.
x x x While it is true that the determination of certain damages x
x x 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. (Emphasis and underscoring
supplied)
If respondent Pyramids counsel had only been forthright in
drafting the complaint and taking the cudgels for his client and
the trial judge assiduous in applying Circular No. 7 vis a vis
prevailing jurisprudence, the precious time of this Court, as well
as of that of the appellate court, would not have been
unnecessarily sapped.
The Court at this juncture thus reminds Pyramids counsel to
observe Canon 12 of the Code of Professional Ethics which
enjoins a lawyer to "exert every effort and consider it his duty to
assist in the speedy and efficient administration of justice," and
Rule 12.04 of the same Canon which enjoins a lawyer "not [to]
unduly delay a case, impede the execution of a judgment or
misuse court processes." And the Court reminds too the trial
judge to bear in mind that the nature of an action is determined
by the allegations of the pleadings51 and to keep abreast of all
laws and prevailing jurisprudence, consistent with the standard
that magistrates must be the embodiments of competence,
integrity and independence.52
WHEREFORE, in light of the foregoing discussions, the petition is
DENIED.
SO ORDERED.
CONCHITA CARPIO MORALES
Associate Justice

fails to impress.
As the salient allegations of Pyramids complaint show and as
priorly stated, they constitute, in the main, an action for
collection of its claims it admittedly "knew."
Assuming arguendo that Pyramid has other claims the amounts
of which are yet to be determined by the trial court, the rule
established in Manchester which was embodied in this Courts
Circular No. 7-88 issued on March 24, 1988, as modified by the
Sun Insurance ruling, still applies. Consider this Courts
pronouncement bearing on the matter in Ayala Corporation v.
Madayag:501awphil
xxxx

CIVIL PROCEDURE

AGUSTIN, E. P. | 47

Republic of the Philippines


SUPREME COURT
SECOND DIVISION
G.R. No. 140954. April 12, 2005
HEIRS OF BERTULDO1 HINOG: Bertuldo Hinog II,
Bertuldo Hinog III, Bertuldo Hinog, Jr., Jocelyn Hinog,
Bertoldo Hinog IV, Bertoldo Hinog V, Edgardo Hinog,
Milagros H. Pabatao, Lilian H. King, Victoria H. Engracia,
Terisita C. Hinog, Paz H. Besana, Roberto C. Hinog,
Vicente C. Hinog, Roel C. Hinog, Marilyn C. Hinog, Bebot
C. Hinog, lordes C. Hinog, Pablo Chiong, Arlene Lanasang
(All respresented by Bertuldo Hinog III), Petitioners,
vs.
HON. ACHILLES MELICOR, in his capacity as Presiding
Judge, RTC, Branch 4, 7th Judicial Region, Tagbiliran
City, Bohol, and CUSTODIO BALANE, RUFO BALANE,
HONORIO BALANE, and TOMAS BALANE, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for certiorari and prohibition under Rule
65 of the Rules of Court which assails the Orders dated March
22, 1999, August 13, 1999 and October 15, 1999 of the Regional
Trial Court, Branch 4, of Tagbilaran City, Bohol in Civil Case No.
4923.
The factual background of the case is as follows:
On May 21, 1991, private respondents Custodio, Rufo, Tomas
and Honorio, all surnamed Balane, filed a complaint for
"Recovery of Ownership and Possession, Removal of
Construction and Damages" against Bertuldo Hinog (Bertuldo for
brevity). They alleged that: they own a 1,399- square meter
parcel of land situated in Malayo Norte, Cortes, Bohol,
designated as Lot No. 1714; sometime in March 1980, they
allowed Bertuldo to use a portion of the said property for a
period of ten years and construct thereon a small house of light
materials at a nominal annual rental of P100.00 only, considering
the close relations of the parties; after the expiration of the tenyear period, they demanded the return of the occupied portion
and removal of the house constructed thereon but Bertuldo
refused and instead claimed ownership of the entire property.
Accordingly, private respondents sought to oust Bertuldo from
the premises of the subject property and restore upon
themselves the ownership and possession thereof, as well as the
payment of moral and exemplary damages, attorneys fees and
litigation expenses "in amounts justified by the evidence." 2
On July 2, 1991, Bertuldo filed his Answer. He alleged ownership
of the disputed property by virtue of a Deed of Absolute Sale
dated July 2, 1980, executed by one Tomas Pahac with the
knowledge and conformity of private respondents.3
After the pre-trial, trial on the merits ensued. On November 18,
1997, private respondents rested their case. Thereupon,
Bertuldo started his direct examination. However, on June 24,
1998, Bertuldo died without completing his evidence.

CIVIL PROCEDURE

On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as


counsel for Bertuldo as his services were terminated by
petitioner Bertuldo Hinog III. Atty. Veronico G. Petalcorin then
entered his appearance as new counsel for Bertuldo.4
On September 22, 1998, Atty. Petalcorin filed a motion to
expunge the complaint from the record and nullify all court
proceedings on the ground that private respondents failed to
specify in the complaint the amount of damages claimed so as to
pay the correct docket fees; and that under Manchester
Development Corporation vs. Court of Appeals,5 non-payment of
the correct docket fee is jurisdictional. 6
In an amended motion, filed on October 2, 1998, Atty. Petalcorin
further alleged that the private respondents failed to pay the
correct docket fee since the main subject matter of the case
cannot be estimated as it is for recovery of ownership,
possession and removal of construction. 7
Private respondents opposed the motion to expunge on the
following grounds: (a) said motion was filed more than seven
years from the institution of the case; (b) Atty. Petalcorin has
not complied with Section 16, Rule 3 of the Rules of Court which
provides that the death of the original defendant requires a
substitution of parties before a lawyer can have legal personality
to represent a litigant and the motion to expunge does not
mention of any specific party whom he is representing; (c)
collectible fees due the court can be charged as lien on the
judgment; and (d) considering the lapse of time, the motion is
merely a dilatory scheme employed by petitioners.8
In their Rejoinder, petitioners manifested that the lapse of time
does not vest the court with jurisdiction over the case due to
failure to pay the correct docket fees. As to the contention that
deficiency in payment of docket fees can be made as a lien on
the judgment, petitioners argued that the payment of filing fees
cannot be made dependent on the result of the action taken.9
On January 21, 1999, the trial court, while ordering the
complaint to be expunged from the records and the nullification
of all court proceedings taken for failure to pay the correct
docket fees, nonetheless, held:
The Court can acquire jurisdiction over this case only upon the
payment of the exact prescribed docket/filing fees for the main
cause of action, plus additional docket fee for the amount of
damages being prayed for in the complaint, which amount
should be specified so that the same can be considered in
assessing the amount of the filing fees. Upon the complete
payment of such fees, the Court may take appropriate action in
the light of the ruling in the case of Manchester Development
Corporation vs. Court of Appeals, supra.10
Accordingly, on January 28, 1999, upon payment of deficiency
docket fee, private respondents filed a manifestation with prayer
to reinstate the case.11 Petitioners opposed the reinstatement12
but on March 22, 1999, the trial court issued the first assailed
Order reinstating the case.13
On May 24, 1999, petitioners, upon prior leave of court,14 filed
their supplemental pleading, appending therein a Deed of Sale
dated November 15, 1982.15 Following the submission of private
respondents opposition thereto,16 the trial court, in its Order
dated July 7, 1999, denied the supplemental pleading on the
ground that the Deed of Absolute Sale is a new matter which
was never mentioned in the original answer dated July 2, 1991,
prepared by Bertuldos original counsel and which Bertuldo

AGUSTIN, E. P. | 48

verified; and that such new document is deemed waived in the


light of Section 1, Rule 917 of the Rules of Court. The trial court
also noted that no formal substitution of the parties was made
because of the failure of defendants counsel to give the names
and addresses of the legal representatives of Bertuldo, so much
so that the supposed heirs of Bertuldo are not specified in any
pleading in the case. 18
On July 14, 1999, petitioners manifested that the trial court
having expunged the complaint and nullified all court
proceedings, there is no valid case and the complaint should not
be admitted for failure to pay the correct docket fees; that there
should be no case to be reinstated and no case to proceed as
there is no complaint filed.19
After the submission of private respondents opposition20 and
petitioners rejoinder,21 the trial court issued the second assailed
Order on August 13, 1999, essentially denying petitioners
manifestation/rejoinder. The trial court held that the issues
raised in such manifestation/rejoinder are practically the same as
those raised in the amended motion to expunge which had
already been passed upon in the Order dated January 21, 1999.
Moreover, the trial court observed that the Order dated March
22, 1999 which reinstated the case was not objected to by
petitioners within the reglementary period or even thereafter via
a motion for reconsideration despite receipt thereof on March
26, 1999.22
On August 25, 1999, petitioners filed a motion for
reconsideration23 but the same was denied by the trial court in
its third assailed Order dated October 15, 1999. The trial court
held that the Manchester rule was relaxed in Sun Insurance
Office, Ltd. vs. Asuncion.24 Noting that there has been no
substitution of parties following the death of Bertuldo, the trial
court directed Atty. Petalcorin to comply with the provisions of
Section 16, Rule 3 of the Rules of Court. The trial court also
reiterated that the Order dated March 22, 1999 reinstating the
case was not assailed by petitioners within the reglementary
period, despite receipt thereof on March 26, 1999.25
On November 19, 1999, Atty. Petalcorin complied with the
directive of the trial court to submit the names and addresses of
the heirs of Bertuldo.26
On November 24, 1999, petitioners filed before us the present
petition for certiorari and prohibition.27 They allege that the
public respondent committed grave abuse of discretion in
allowing the case to be reinstated after private respondents paid
the docket fee deficiency since the trial court had earlier
expunged the complaint from the record and nullified all
proceedings of the case and such ruling was not contested by
the private respondents. Moreover, they argue that the public
respondent committed grave abuse of discretion in allowing the
case to be filed and denying the manifestation with motion to
dismiss, despite the defect in the complaint which prayed for
damages without specifying the amounts, in violation of SC
Circular No. 7, dated March 24, 1988.
In their Comment, private respondents aver that no grave abuse
of discretion was committed by the trial court in reinstating the
complaint upon the payment of deficiency docket fees because
petitioners did not object thereto within the reglementary period.
Besides, Atty. Petalcorin possessed no legal personality to
appear as counsel for the heirs of Bertuldo until he complies with
Section 16, Rule 3 of the Rules of Court.28

CIVIL PROCEDURE

At the outset, we note the procedural error committed by


petitioners in directly filing the instant petition before this Court
for it violates the established policy of strict observance of the
judicial hierarchy of courts.
Although the Supreme Court, Court of Appeals and the Regional
Trial Courts have concurrent jurisdiction to issue writs of
certiorari, prohibition, mandamus, quo warranto, habeas corpus
and injunction, such concurrence does not give the petitioner
unrestricted freedom of choice of court forum.29 As we stated in

People vs. Cuaresma:30

This Court's original jurisdiction to issue writs of certiorari is not


exclusive. It is shared by this Court with Regional Trial Courts
and with the Court of Appeals. This concurrence of jurisdiction is
not, however, to be taken as according to parties seeking any of
the writs an absolute, unrestrained freedom of choice of the
court to which application therefor will be directed. There is after
all a hierarchy of courts. That hierarchy is determinative of the
venue of appeals, and also serves as a general determinant of
the appropriate forum for petitions for the extraordinary writs. A
becoming regard for that judicial hierarchy most certainly
indicates that petitions for the issuance of extraordinary writs
against first level ("inferior") courts should be filed with the
Regional Trial Court, and those against the latter, with the Court
of Appeals. A direct invocation of the Supreme Courts original
jurisdiction to issue these writs should be allowed only when
there are special and important reasons therefor, clearly and
specifically set out in the petition. This is [an] established policy.
It is a policy necessary to prevent inordinate demands upon the
Courts time and attention which are better devoted to those
matters within its exclusive jurisdiction, and to prevent further
over-crowding of the Courts docket.31
The rationale for this rule is two-fold: (a) it would be an
imposition upon the precious time of this Court; and (b) it would
cause an inevitable and resultant delay, intended or otherwise,
in the adjudication of cases, which in some instances had to be
remanded or referred to the lower court as the proper forum
under the rules of procedure, or as better equipped to resolve
the issues because this Court is not a trier of facts.32
Thus, this Court will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts,
and exceptional and compelling circumstances, such as cases of
national interest and of serious implications, justify the availment
of the extraordinary remedy of writ of certiorari, calling for the
exercise of its primary jurisdiction. Exceptional and compelling
circumstances were held present in the following cases: (a)
Chavez vs. Romulo33 on citizens right to bear arms; (b)
Government of the United States of America vs. Purganan34 on
bail in extradition proceedings; (c) Commission on Elections vs.
Quijano-Padilla35
on
government
contract
involving
modernization and computerization of voters registration list; (d)
Buklod ng Kawaning EIIB vs. Zamora36 on status and existence
of a public office; and (e) Fortich vs. Corona37 on the so-called
"Win-Win Resolution" of the Office of the President which
modified the approval of the conversion to agro-industrial area.
In this case, no special and important reason or exceptional and
compelling circumstance analogous to any of the above cases
has been adduced by the petitioners so as to justify direct
recourse to this Court. The present petition should have been
initially filed in the Court of Appeals in strict observance of the
doctrine on the hierarchy of courts. Failure to do so is sufficient
cause for the dismissal of the petition at bar.

AGUSTIN, E. P. | 49

In any event, even if the Court disregards such procedural flaw,


the petitioners contentions on the substantive aspect of the case
fail to invite judgment in their favor.
The unavailability of the writ of certiorari and prohibition in this
case is borne out of the fact that petitioners principally assail the
Order dated March 22, 1999 which they never sought
reconsideration of, in due time, despite receipt thereof on March
26, 1999. Instead, petitioners went through the motion of filing
a supplemental pleading and only when the latter was denied, or
after more than three months have passed, did they raise the
issue that the complaint should not have been reinstated in the
first place because the trial court had no jurisdiction to do so,
having already ruled that the complaint shall be expunged.
After recognizing the jurisdiction of the trial court by seeking
affirmative relief in their motion to serve supplemental pleading
upon private respondents, petitioners are effectively barred by
estoppel from challenging the trial courts jurisdiction. 38 If a
party invokes the jurisdiction of a court, he cannot thereafter
challenge the courts jurisdiction in the same case. 39 To rule
otherwise would amount to speculating on the fortune of
litigation, which is against the policy of the Court. 40
Nevertheless, there is a need to correct the erroneous
impression of the trial court as well as the private respondents
that petitioners are barred from assailing the Order dated March
22, 1999 which reinstated the case because it was not objected
to within the reglementary period or even thereafter via a
motion for reconsideration despite receipt thereof on March 26,
1999.
It must be clarified that the said order is but a resolution on an
incidental matter which does not touch on the merits of the case
or put an end to the proceedings.41 It is an interlocutory order
since there leaves something else to be done by the trial court
with respect to the merits of the case.42 As such, it is not subject
to a reglementary period. Reglementary period refers to the
period set by the rules for appeal or further review of a final
judgment or order, i.e., one that ends the litigation in the trial
court.
Moreover, the remedy against an interlocutory order is generally
not to resort forthwith to certiorari, but to continue with the case
in due course and, when an unfavorable verdict is handed down,
to take an appeal in the manner authorized by law. 43 Only when
the court issued such order without or in excess of jurisdiction or
with grave abuse of discretion and when the assailed
interlocutory order is patently erroneous and the remedy of
appeal would not afford adequate and expeditious relief will
certiorari be considered an appropriate remedy to assail an
interlocutory order.44 Such special circumstances are absolutely
wanting in the present case.
Time and again, the Court has held that the Manchester rule has
been modified in Sun Insurance Office, Ltd. (SIOL) vs.
Asuncion45 which defined the following guidelines involving the
payment of docket fees:
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 subjectmatter 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 fees within a reasonable time
but in no case beyond the applicable prescriptive or
reglementary period.

CIVIL PROCEDURE

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.
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.46 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.47
Under the peculiar circumstances of this case, the reinstatement
of the complaint was just and proper considering that the cause
of action of private respondents, being a real action, prescribes
in thirty years,48 and private respondents did not really intend to
evade the payment of the prescribed docket fee but simply
contend that they could not be faulted for inadequate
assessment because the clerk of court made no notice of
demand or reassessment.49 They were in good faith and simply
relied on the assessment of the clerk of court.
Furthermore, the fact that private respondents prayed for
payment of damages "in amounts justified by the evidence" does
not call for the dismissal of the complaint for violation of SC
Circular No. 7, dated March 24, 1988 which required that all
complaints must specify the amount of damages sought not only
in the body of the pleadings but also in the prayer in order to be
accepted and admitted for filing. Sun Insurance effectively
modified SC Circular No. 7 by providing that filing fees for
damages and awards that cannot be estimated constitute liens
on the awards finally granted by the trial court.50
Thus, while the docket fees were based only on the real property
valuation, the trial court acquired jurisdiction over the action,
and judgment awards which were left for determination by the
court or as may be proven during trial would still be subject to
additional filing fees which shall constitute a lien on the
judgment. It would then be the responsibility of the Clerk of
Court of the trial court or his duly authorized deputy to enforce
said lien and assess and collect the additional fees.51
It is worth noting that when Bertuldo filed his Answer on July 2,
1991, he did not raise the issue of lack of jurisdiction for nonpayment of correct docket fees. Instead, he based his defense
on a claim of ownership and participated in the proceedings
before the trial court. It was only in September 22, 1998 or more
than seven years after filing the answer, and under the auspices
of a new counsel, that the issue of jurisdiction was raised for the
first time in the motion to expunge by Bertuldos heirs.
After Bertuldo vigorously participated in all stages of the case
before the trial court and even invoked the trial courts authority

AGUSTIN, E. P. | 50

in order to ask for affirmative relief, petitioners, considering that


they merely stepped into the shoes of their predecessor, are
effectively barred by estoppel from challenging the trial courts
jurisdiction. Although the issue of jurisdiction may be raised at
any stage of the proceedings as the same is conferred by law, it
is nonetheless settled that a party may be barred from raising it
on ground of laches or estoppel.52
Moreover, no formal substitution of the parties was effected
within thirty days from date of death of Bertuldo, as required by
Section 16, Rule 353 of the Rules of Court. Needless to stress,
the purpose behind the rule on substitution is the protection of
the right of every party to due process. It is to ensure that the
deceased party would continue to be properly represented in the
suit through the duly appointed legal representative of his
estate.54 Non-compliance with the rule on substitution would
render the proceedings and judgment of the trial court infirm
because the court acquires no jurisdiction over the persons of
the legal representatives or of the heirs on whom the trial and
the judgment would be binding.55 Thus, proper substitution of
heirs must be effected for the trial court to acquire jurisdiction
over their persons and to obviate any future claim by any heir
that he was not apprised of the litigation against Bertuldo or that
he did not authorize Atty. Petalcorin to represent him.
The list of names and addresses of the heirs was submitted
sixteen months after the death of Bertuldo and only when the
trial court directed Atty. Petalcorin to comply with the provisions
of Section 16, Rule 3 of the Rules of Court. Strictly speaking
therefore, before said compliance, Atty. Petalcorin had no
standing in the court a quo when he filed his pleadings. Be that
as it may, the matter has been duly corrected by the Order of
the trial court dated October 15, 1999.
To be sure, certiorari under Rule 6556 is a remedy narrow in
scope and inflexible in character. It is not a general utility tool in
the legal workshop.57 It offers only a limited form of review. Its
principal function is to keep an inferior tribunal within its
jurisdiction.58 It can be invoked only for an error of jurisdiction,
that is, one where the act complained of was issued by the
court, officer or a quasi-judicial body without or in excess of
jurisdiction, or with grave abuse of discretion which is
tantamount to lack or in excess of jurisdiction, 59 not to be used
for any other purpose,60 such as to cure errors in proceedings or
to correct erroneous conclusions of law or fact.61 A contrary rule
would lead to confusion, and seriously hamper the
administration of justice.
Petitioners utterly failed to show that the trial court gravely
abused its discretion in issuing the assailed resolutions. On the
contrary, it acted prudently, in accordance with law and
jurisprudence.
WHEREFORE, the instant petition for certiorari is DISMISSED
for lack of merit.
No costs.
SO ORDERED.
Puno, (Chairman), Callejo, Sr., Tinga and Chico-Nazario, JJ.,
concur.

CIVIL PROCEDURE

AGUSTIN, E. P. | 51

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 126749 August 21, 1997


ERIBERTO M. SUSON, petitioner,
vs.
HON. COURT OF APPEALS and DAVID S. ODILAO, JR.,
respondents.
PADILLA, J.:

(Branch 26) to the Clerk of Court of the Regional Trial Court of


Cebu City (Branch 6), the latter advised his counsel to file a
formal request with this Court, thru the Court Administrator, for
an "authority" to apply the payment for docket fees previously
made to the Regional Trial Court (Branch 26), Southern Leyte to
the docket fees to be paid to the Regional Trial Court Cebu City
(Branch 6).
On 20 June 1994, private respondent, thru counsel, wrote a
letter addressed to the SC Court Administrator, requesting for an
authorization to consider the filing fees previously paid to the
Regional Trial Court (Branch 26) of San Juan, Southern Leyte as
payment
for
the
filing
fees
to
be
paid
in
the Regional Trial Court of Cebu City (Branch 6) where the case
4
was to be re-filed.
On 12 July 1994, Supreme Court Deputy Court Administrator
Bernardo P. Abesamis sent the following reply to private
respondent's counsel:

The issue in this case is whether or not a party litigant, whose


complaint has been dismissed by a Regional Trial Court due to
improper venue, can seek an authorization from the Supreme
Court thru the Deputy Court Administrator to re-file his
complaint in the court of proper venue without payment of the
prescribed docket fee.
This is a petition for review on certiorari under Rule 45 of the
Rules of Court to review the decision 1 of the Court of Appeals in
CA-G.R. SP No. 37311 which dismissed petitioner's petition for
certiorari assailing the order of the Regional Trial Court (Branch
6) Cebu City which denied his motion to dismiss for lack of
merit.
The facts are not in dispute.
On 15 November 1993, private respondent Odilao filed a P5.15
million civil suit for damages against petitioner Suson before the
Regional Trial Court of San Juan (Branch 26), Southern Leyte.
Private respondent claimed that petitioner made false and
groundless accusations of graft and corruption against him
before the Office of the Ombudsman, and thereafter caused
their publication in a Cebu-based local daily under the headline
"ODILAO SUED FOR GRAFT." According to private respondent,
Suson's machinations had cast dishonor, discredit and contempt
upon his person which besmirched his reputation and caused
him to suffer moral shock and social humiliation.

Atty.
Gonzales
154
Cebu City

Fidel
V.

Law

C.
Urgello

Gonzales
Office
St.

Dear Atty. Gonzales:


In connection with your letter of 20 June 1994
relative to Civil Case No. R-417, please be informed
that you can re(-)file the case at RTC Cebu City and
present the official receipt corresponding to the filing
fees paid at RTC, Branch 26 San Juan, Southern
Leyte.

Private respondent paid the sum of P25,600.00 in docket fees to


the Regional Trial Court (Branch 26) of Southern Leyte covered
by Official Receipts Nos. 1937304 in the amount of P15,450.00
and 1030112 in the amount of P10,150.00, both dated 15
November 1993. 2
On 17 December 1993, petitioner Suson filed a motion to dismiss
the complaint of private respondent Odilao on the ground of
improper venue, alleging therein that Odilao resides in Talisay,
Cebu and not in Himonganan, Southern Leyte. Finding merit in
petitioner's arguments in his motion to dismiss, the lower court
(RTC Southern Leyte) granted petitioner's aforesaid motion on
24 May 1994. 3
Thereafter, private respondent went to the Regional Trial Court
of Cebu City to re-file the same complaint (except the statement
of his actual residence) that was dismissed by the Regional Trial
Court (Branch 26) of Southern Leyte. Private respondent avers
that upon showing the official receipts as proof of payment of
the docket fees in the Regional Trial Court of Southern Leyte

CIVIL PROCEDURE

AGUSTIN, E. P. | 52

Court, through the Court Administrator,


R
for authority

to apply the filing fees paid by Nhim (plaintiff) in the


Regional Trial Court of San Juan,
A Southern Leyte, for
the filing fees in the instant case.
R Said request was
granted by the Court Administrator
D . The validity of
the authority given by the Deputy
O
Administrator

regarding the application of the filing fees in this case


can not be questioned before this
F forum. Indeed the
Court finds it to be in keeping with
. justice and equity
and the spirit of liberality in construing the Rules. In
fact there is no prohibition in that
A direction. It should
be stated here that P25,000.00 Bfiling fee paid by the
plaintiff in the Regional Trial ECourt of San Juan,
Southern Leyte, is no picayune amount
S
for one to do
away with, and sense of fairness
A
demands that
plaintiff be allowed to apply theMsame in the filing of
this
I
case 6 (emphasis supplied).
S
5

Thereafter, private respondent presented the letter-reply of


Deputy Court Administrator Abesamis to the clerk of court of the
RTC (Branch 6) of Cebu City upon re-filing his complaint. On the
basis of the aforesaid letter-reply, the clerk of court docketed
private respondent's complaint as Civil Case CEB-16336 without
requiring private respondent to pay anew the prescribed docket
fees.
On 13 September 1994, petitioner filed a motion to dismiss Civil
Case No. 16336 on grounds of lack of jurisdiction and lack of
cause of action. Petitioner argued that private respondent "did
not pay (even) a single centavo of the P25,000.00 filing fee;
hence, the court (RTC of Cebu City, Branch 6) did not acquire
jurisdiction over the case."
On 16 September 1994, the RTC of Cebu City (Branch 6),
presided over by Judge Loreto D. de la Victoria, issued an order
denying petitioner's motion to dismiss. The court held that:
. . . When said plaintiff re(-)filed the same case with
this Court, he asked permission from the Supreme

CIVIL PROCEDURE

As mentioned earlier, petitioner elevated Judge de la Victoria's


order for review on certiorari to the Court of Appeals which
D
agreed with the trial court's dispositions. The Court of Appeals
e
ratiocinated that:
p
u
To require respondent Suson to tpay anew the docket
fee of P25,600 in its totality thaty he has already paid
when he filed the case that was earlier dismissed on
the ground of improper venue, Cfor him to re-file the
same case in the proper court isoto unduly exact from
u
him a premium on his constitutional
right to free
access to the courts for redressr of a wrong (Section
t See Tan v. Court
11, Article III, 1987 Constitutional;
of Appeals, 131 SCRA 397, 404). The real issue here
A
is not whether the Deputy Court
Administrator is
empowered to allow the filingd of a case in court
m fee. It is whether
without paying the required docket
i another Court the
respondent Odilao may re-file in
case that was dismissed on then ground of improper
i
venue without having to pay again
the docket fee of
s earlier case. Said
P25,600 that he has paid in the
t
issue is resolved in the affirmative
in favor of
r
respondent Odilao. 7
a
t
In his present petition, petitioner contends that
o "to relieve Odilao
from paying the docket fee in the Cebu Court
r by just presenting
the receipts issued by the Leyte Court would be tantamount to a
withdrawal of the docket fee paid to the Leyte Court." In legal
contemplation, the Leyte Court had acquired jurisdiction over
Civil Case No. P-417 upon the payment of the prescribed docket
fee(s) and its order dismissing the case due to improper venue
was a final disposition of the case pursuant to the exercise of
said jurisdiction.
Petitioner further contends that the case later filed in the
Regional Trial Court of Cebu City (Branch 6) by private
respondent is "a distinct and separate case from that of the
Leyte court as it has a new docket number (CEB-16336)
although the allegations therein are entirely the same as Civil
Case No. P-417 filed in the RTC of Southern Leyte (Branch 26)."
In his comment, private respondent Odilao contends that "it is
incorrect for petitioner to insist that Odilao failed to pay the
required filing fees." He (Odilao) was not granted an
"exemption" from the payment of filing fees by Deputy Court
Administrator Abesamis but merely an authority to apply the
filing fees he paid in Civil Case No. P-417 filed in RTC Southern
Leyte (Branch 26) as "payment for filing fees of the same case"
re-filed in the RTC of Cebu (Branch 6).

AGUSTIN, E. P. | 53

In Pilipinas Shell Petroleum Corp. v. CA,


rule that:

we had occasion to

Filing fees are intended to take care of court


expenses in the handling of cases in terms of cost of
supplies, use of equipment, salaries and fringe
benefits of personnel, etc. computed as to man hours
used in handling each case. The payment of said fees
therefore cannot be made dependent on the result of
the action taken without entailing tremendous losses
to the government and to the judiciary in particular.
In the cases of Lee v. Republic (10 SCRA 65), Nalimit v. Degamo
(12 SCRA 450) and Mogaspi v. Ramolete (115 SCRA 193), we
ruled that a case is deemed filed only upon payment of the
docket fee regardless of the actual date of filing of the case in
court. In 1987, in Manchester Development Corporation v. CA
(149 SCRA 564) we further refined the principle, as we ruled,
that "a court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee", and in order to curb the
unethical practice of misleading the docket clerk in the
assessment of the correct filing fee, we laid down the rule that
"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." Two (2) years later, Sun Insurance
Office Ltd. v. Hon. Maximiano Asuncion 9 affirmed the basic
principle laid down in Manchester but "reduced its stringency
somewhat by providing that only those claims as to which the
amounts were not specified would be refused acceptance or
expunged and that, in any case, the defect was not necessarily
fatal or irremediable as the plaintiff could, on motion, be granted
a reasonable time within which to amend his complaint and pay
the requisite filing fees, unless in the meantime, the period of
limitation of the right of action was completed." 10 In that case,
the Court en banc laid down the following rules:
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.

CIVIL PROCEDURE

It should be stressed, however, that the aforementioned cases


all involved under-assessment of the docket fees and from the
Court's pronouncements in Sun Insurance, it can be argued that
while payment of the prescribed docket fee is a jurisdictional
requirement, its non-payment does not automatically cause the
dismissal of the case if the non-payment is not beyond the
applicable prescriptive or reglementary period.
In the case at bar, in the strict sense, private respondent's
complaint cannot be deemed to have been "re-filed" in the RTC
of Cebu City (Branch 6) because it was not originally filed in the
same court but in the RTC of Southern Leyte (Branch 26). Thus,
when private respondent's complaint was docketed as Civil Case
No. CEB-16336 by the clerk of court of the RTC Cebu City
(Branch 6), it became an entirely separate case from Civil Case
No. P-417 that was dismissed by the RTC of Leyte due to
improper venue. As far as Civil Case No. P-417 is concerned,
while undoubtedly the order of dismissal is not an adjudication
on the merits of the case, the order, nevertheless, is a final
order. This means that when private respondent did not appeal
therefrom, the order became final and executory for all legal
intents and purposes. From a procedural point of view,
therefore, to "re-file" the case before the same court would be
an obvious faux pas. As a remedial measure, the plaintiff whose
complaint was dismissed due to improper venue can still file
another complaint, but this time in the court of proper venue.
Note, however, that the dismissal of the complaint filed in the
court of improper venue did not stop the running of the
prescriptive period within which to file his complaint in the court
of proper venue. Theoretically, the plaintiff may decide to file a
complaint containing substantially the same allegations and
prayer as the previously dismissed complaint, or he may decide
to amend the same and pray for a different relief. In this case,
the principle remains unchanged, that is, the court (of proper
venue) will only acquire jurisdiction over the case only upon the
payment of the prescribed docket fee thereon.
Article III, Sec. 11 of the 1987 Constitution states that "Free
access to the courts and quasi-judicial bodies and adequate legal
assistance shall not be denied to any person by reason of
poverty." It is for this reason that under Rule 141, Sec. 16 of the
Rules of Court, pauper-litigants are exempted from the payment
of court fees, which includes the filing fee in instituting a
complaint. Nonetheless, the rule provides that the legal fees
shall be a lien on the monetary or property judgment rendered
in favor of the pauper-litigant.
Private respondent, therefore, has as much "free access" to the
courts to seek redress of a wrong because there is no law or rule
that prevents him from going to court to file his complaint. But,
the rule provides that he must pay the prescribed docket fee
because he is neither a pauper-litigant nor a person expressly
exempt by the Rules of Court from payment thereof.
Consequently, the Deputy Court Administrator committed an
error when he stated in his letter reply to private respondent's
counsel that he can "re-file the complaint in the RTC Cebu City
(Branch 6) and present the official receipt corresponding to the
filing fees paid in the RTC Branch 26, San Jose, Southern Leyte."
There is no way for the OCA letter to be misinterpreted by
Odilao's counsel because the tenor of the letter of Odilao to the
OCA dated 20 June 1994 clearly stressed that he was requesting
for an authorization (from the OCA) to apply the filing fees he
paid in Civil Case No. P-417 to cover the filing fees in a case he
intends to file with the RTC of Cebu City (Branch 6). In fact,
both the Regional Trial Court of Cebu City (Branch 6) and the
Court of Appeals held the opinion that this procedural remedy

AGUSTIN, E. P. | 54

can be obtained from the Office of the Deputy Court


Administrator.
As early as 26 February 1991, the Court en banc had issued a
resolution 11 containing guidelines on the duties and functions of
the Office of the Court Administrator. As a general rule, the
Court acts through the Court Administrator in the exercise of its
administrative functions. The resolution clearly classified the
work attended to by the OCA, either on its responsibility or with
the approval of the Court en banc, into the following categories:
1. Judicial discipline of judges and personnel.

WHEREFORE, premises considered, the decision of the Court of


Appeals is hereby SET ASIDE. The Regional Trial Court (Branch
6) Cebu City is hereby ordered to require private respondent to
pay the prescribed docket fees in Civil Case No. 16336 as a
condition precedent for further hearing the case, after
ascertaining at the earliest date practicable from the records that
private respondent's complaint has not been barred by
prescription at the time it was filed in said court.
SO ORDERED.

Bellosillo, Vitug, Kapunan and Hermosisima, Jr., JJ., concur.

2. Administrative interventions in case of management of lower


courts, including designation of Executive Judges and detail of
judges to other courts.
3. Preparation of draft circulars.
4. Public assistance and information.
5. Personnel administration and
6. Liaison with the Executive and Legislative Departments.
From the foregoing enumeration, it is clear that the OCA has
neither the power nor the authority to exempt any party not
otherwise exempt under the law or under the Rules of Court in
the payment of the prescribed docket fees. The principles laid
down by this Court in Manchester and in Sun Insurance were
formulated en banc, no less than the Constitution mandates that
no doctrine or principle laid down by the court in a decision en
banc may be modified or reversed except by the court sitting en
banc. To now exempt or otherwise authorize private respondent
Odilao not to pay the prescribed filing fees would not only be in
derogation of this principle but also of the general rule in
pleadings, practice and procedure that the mistake of counsel
binds his client.
In fine, the Court will not allow the office of the Court
Administrator to be unduly burdened in futuro with similar letterrequests from litigants for an exemption in the payment of the
prescribed docket fees or in private respondent's language, for
an authorization to apply the docket fees paid in a dismissed
case to cover the docket fees once the case is re-filed in the
court of proper venue. In other words, the Court Administrator
cannot grant any relief or remedial measure which is beyond his
powers and functions. It may be noteworthy to mention here
that even in the Supreme Court, there are numerous instances
when a litigant has had to re-file a petition previously dismissed
by the Court due to a technicality (violation of a pertinent
Circular), and in these instances, the litigant is required to pay
the prescribed docket fee and not apply to the re-filed case the
docket fees paid in the earlier dismissed case.
Coming back to the case at bar, and pursuant to the rules laid
down by this Court in Sun Insurance, we hold that under the
peculiar circumstances of this case private respondent did not
really intend to evade the payment of the prescribed docket fee.
His counsel simply strayed away from the rules to explore the
possibility of an extra legal remedy. Since his case has already
been docketed as Civil Case no 16336 in the RTC Branch 6 Cebu
City, the procedural remedy of paying the prescribed docket fees
is still available to him provided, of course, that the applicable
prescriptive or reglementary period has not yet set in.

CIVIL PROCEDURE

AGUSTIN, E. P. | 55

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 136858

July 21, 2004

CARLOS VILLAMOR, TERTULIANO D.VILLAMOR, LOLITA


D. VILLAMOR, LEANDRA VILLAMOR CAPUNO and
NUNILA VILLAMOR ABELLAR, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, TEOFILO D.
VILLAMOR, AND TEODULO D. VILLAMOR, respondents.

DECISION

CALLEJO, SR., J.:


Before us is a petition for certiorari assailing the Resolution1
dated August 26, 1998 of the Court of Appeals reinstating the
appeal of the herein private respondents and its Resolution
dated December 18, 1998 denying the motion for
reconsideration thereof.
An action for partition and damages was filed with the Regional
Trial Court of Danao City, Branch 25,2 entitled "Teodulo D.
Villamor, Teofilo D. Villamor and Nunila Villamor-Abellar,
plaintiffs, vs. Carlos D. Villamor, Tertuliano D. Villamor, Lolita D.
Villamor and Leandra Villamor-Capuno, defendants," docketed as
Civil Case No. DNA-401. The parties are brothers and sisters,
and the sole and exclusive heirs of the late spouses Jose S.
Villamor and Dolores I. De Dios.
The plaintiffs therein alleged, inter alia, that: they and their
siblings had a family meeting on May 19, 1996 and had agreed
that the estate of their parents comprising of four (4) parcels of
land and a house of strong materials situated at Carmen, Cebu
shall be divided equally among themselves, and a meeting on
May 25, 1996 was set for the purpose of putting down into
writing the terms of the partition; on said date, however, the
defendants changed their minds and insisted that parcel no. 3
and the house were already donated to defendants Tertuliano
and Lolita while parcel No. 4 had been donated to defendant
Carlos; the rest of the properties were owned in common by the
heirs; as gleaned from the tax declaration covering the
properties, the same had an aggregate assessed value of
P19,000.00.3
The plaintiffs prayed that judgment be rendered, as follows:
1.
Declaring the properties described in
paragraph IV of this Complaint as belonging to the
estate of the late Spouses Jose and Dolores Villamor,
and therefore owned in common by the parties
hereto;
2.
Ordering the partition of the aforesaid
properties into seven (7) equal parts, one part for

CIVIL PROCEDURE

each of the seven children of the aforesaid late


spouses, the parties to this case;
3.
Declaring as null and void any alleged donation
to Carlos D. Villamor with reference to parcel No. 4,
or to Tertuliano Villamor and Lolita Villamor with
reference to parcel no. 3 and the house, the same
being obviously illegal and/or total frauds (sic) and/or
fabrications, and ordering the cancellation of any tax
declarations that may have been issued pursuant
thereto;
4.
Ordering the defendants to pay jointly and
solidarily to the plaintiffs, moral damages in the sum
of not less than P300,000.00, as well as exemplary
damages in the amount of P100,000.00;
5.
Ordering the defendants to pay and/or
reimburse jointly and solidarily to the plaintiffs,
attorney's fees of at least P50,000.00 as well as costs
of litigation in the sum of not less than P20,000.00.4
Before an Answer was filed, the plaintiffs filed an amended
complaint in which they included a fifth parcel of land as subject
matter thereof so that the aggregate assessed value of the
property amounted to P33,950.00.
Notwithstanding the filing of the amended complaint, the
defendants filed a motion to dismiss the amended complaint
contending that it stated no cause of action against them and
that the action was within the exclusive jurisdiction of the
Municipal Trial Court since the aggregate value of the property
subject of the action was less than P20,000.00.
On November 25, 1996, the trial court issued an Order denying
the motion to dismiss of the defendants. They filed a motion for
reconsideration of the order and on January 13, 1997, the trial
court issued a Resolution, this time granting the motion, with the
following dispositive portion:
WHEREFORE, Motion for Reconsideration is given due
course, Case is hereby ordered dismissed, without
prejudice to refiling the same in the proper Municipal
Trial Court.5
The trial court ruled that the MTC had exclusive jurisdiction over
the action under Republic Act No. 7691, the assessed value of
the property subject of the action being less than P20,000.00.
The plaintiffs moved to reconsider the order, alleging that under
their amended complaint, the assessed value of the five parcels
of land was P33,950.00. On February 11, 1997, the court issued
an Order granting plaintiffs' motion for reconsideration declaring
that it overlooked the amended complaint wherein a fifth
parcel of land was included as subject matter of the complaint
raising the aggregate value of the properties to P33,950.00;
hence, the action was under the exclusive jurisdiction of the RTC
under Republic Act No. 7691.
The defendants filed a motion for the reconsideration of the
February 11, 1997 Order of the court. On April 10, 1997, the
trial court issued an order granting the motion and ordering the
dismissal of the case. The court held that by filing the amended
complaint to include therein a fifth parcel of land, and bringing
the assessed value of the property to P33,950.00, the plaintiffs
attempted to confer jurisdiction on the RTC over their action
which is contrary to the principle that the jurisdiction of the court

AGUSTIN, E. P. | 56

is conferred by the Constitution and the law and not by the


plaintiffs.
The plaintiffs again moved to reconsider the April 10, 1997 Order
of the Court. On June 30, 1997, the trial court denied the said
motion. On July 1, 1997, the 1997 Rules of Civil Procedure took
effect.
Undaunted, the plaintiffs filed a notice of appeal on July 11,
1997. The trial court gave due course to the appeal. However,
the plaintiffs-appellants failed to pay the requisite appellate
docket fee and other lawful fees, as required by Rule 41, Section
46 of the 1997 Rules of Civil Procedure. The defendantsappellees filed with the Court of Appeals a motion to dismiss7 the
appeal for failure of the plaintiffs-appellants to pay the requisite
appellate docket fee within the period for appeal; and, as such,
the appellate court had no jurisdiction over the appeal. On
January 19, 1998, the Court of Appeals issued a resolution
requiring the appellants to comment on the appellees' motion to
dismiss. On February 17, 1998, the appellants filed a
Manifestation and Motion, with the prayer that the Clerk of Court
inform them of the requisite amount of appellate docket fee so
that they can pay the same.
On February 27, 1998, plaintiff-appellant Nunila Villamor Abellar
filed a Motion to Withdraw Appeal8 as she did not want to
aggravate the already heightened animosity among the brothers
and sisters because of this court battle. On March 24, 1998, the
plaintiffs-appellants paid the requisite appellate docket fee and
other lawful fees in the Regional Trial Court.
On May 14, 1998, the Court of Appeals issued a Resolution
dismissing the appeal for failure of the plaintiffs-appellants to
perfect the appeal on time on account of their failure to pay the
requisite appellate docket fees for their appeal within the period
therefor. At the same time, the CA granted Nunila Villamor
Abellar's withdrawal of appeal.9
Appellant Nunila Villamor Abellar's withdrawal of
appeal is hereby granted pursuant to Sec. 3, Rule 50
of the 1997 Rules of Civil Procedure.
Considering that the notice of appeal was filed on July
11, 1997 after the 1997 Rules on Civil Procedure took
effect and docket fees were only paid on March 24,
1998, the appeal is hereby dismissed for failure of the
appellants Teofilo and Teodulo Villamor to perfect the
appeal within the period provided.
On motion for reconsideration of the plantiffs-appellants,10 the
Court of Appeals reconsidered its resolution of dismissal and
reinstated the appeal of the plaintiffs-appellants. The Court of
Appeals applied the 1997 Rules of Civil Procedure liberally in the
interest of justice.
Hence, this petition filed by the herein petitioners, alleging that:

II.
THE RESPONDENT COURT OF APPEALS ACTED IN
GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF OR EXCESS OF JURISDICTION IN GIVING
DUE COURSE TO THE APPEAL OF PRIVATE
RESPONDENTS DESPITE THE LATE FILING OF
APPEAL, THE LATE PAYMENT OF APPEAL DOCKET
FEE
AND
NON-APPEALABILITY
OF
THE
RESOLUTIONS OF THE TRIAL COURT.
The petitioners assert that the CA committed a grave abuse of
its discretion in reinstating the appeal of the private respondents
despite the fact that they failed to perfect their appeal by
remitting to the Clerk of Court of the trial court the appellate
court docket fee and other legal fees. They contend that the
Court of Appeals did not acquire any appellate jurisdiction over
the assailed order which had become final and executory for
their failure to perfect their appeal within the period and in the
manner provided for in the Rules of Civil Procedure.
We are not persuaded.
Although the right to appeal is a statutory, not a natural right, it
is an essential part of the judicial system and courts should
proceed with caution so as not to deprive a party of this
prerogative, but instead afford every party litigant the amplest
opportunity for the proper and just disposition of his cause,
freed from the constraints of technicalities. 11
The failure of a party to perfect the appeal in the manner and
within the period fixed by law carries with it the result that no
court can exercise appellate jurisdiction over the case. A party's
appeal by notice of appeal as in this case is perfected as to him
upon the filing of the notice of appeal in due time. 12 Together
with this notice of appeal is the payment of docket and other
legal fees which should be paid within the prescribed period. 13
Such payment is mandatory and jurisdictional and the failure of
the appellant to conform with the rules on appeal renders the
judgment final and executory.14
However, in several cases, it has been held that the delay in the
payment of the docket fees confers a discretionary, and not
mandatory, power to dismiss the proposed appeal. 15 In
Buenaflor vs. Court of Appeals,16 the Court had the occasion to
explain that:
The established rule is that the payment in full of the
docket fees within the prescribed period is
mandatory. Nevertheless, this rule must be qualified,
to wit: First, the failure to pay appellate court docket
fees within the reglementary period allows only
discretional dismissal, not automatic dismissal, of the
appeal; Second, such power should be used in the
exercise of the Courts' sound discretion in accordance
with the tenets of justice and fair play and with great
deal of circumspection considering all attendant
circumstances.

I.
THE RESPONDENT COURT OF APPEALS ACTED IN
GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTON IN ISSUING THE
RESOLUTIONS DATED AUGUST 26, 1998 AND
DECEMBER 18, 1998.

CIVIL PROCEDURE

Admittedly, this Court has allowed the filing of an


appeal in some cases where a stringent application of
the rules would have denied it, only when to do so
would serve the demands of justice and in the
exercise of the Court's equity jurisdiction. This is
based on the rule of liberality in the interpretation of
the Rules to achieve substantial justice. It may be
recalled that the general rule is that the Rules of

AGUSTIN, E. P. | 57

Court are rules of procedure and whenever called for


they should be construed as to give effect rather than
defeat their essence.
In reinstating the appeal of the private respondents, the Court of
Appeals ratiocinated as follows:
It appearing that the entire record of this case related
to this appeal interposed by plaintiffs-appellants were
transmitted to this Court on July 16, 1997 (Rollo, p.
4) which is five (5) days after the Notice of Appeal
was filed on July 11, 1997 (Rollo, p. 11) despite the
provision of Section 4, Rule 41 of the 1997 Rules of
Civil Procedure which took effect on July 1, 1997, or
ten (10) days from the filing of the Notice of Appeals,
thus:
"SEC. 4. APPELLATE COURT DOCKET AND
OTHER LAWFUL FEES. Within the period
for taking an appeal, the appellant shall
pay to the clerk of court which rendered
the judgment or final order appealed from,
the full amount of the appellate docket and
other lawful fees. Proof of payment of the
said fees shall be transmitted to the
appellate court together with the original
record or the record on appeal." (n):
underscoring supplied.
which is a new provision under the said Rule; and it
further appearing that the docket fees were already
paid by the plaintiffs-appellants with proof of payment
transmitted to this Court by the Clerk of Court of the
Regional Trial Court of Danao City (Rollo, pp. 23-24,
27); and that the Brief for the appellants was already
submitted to this Court attached to plaintiffsappellants' "Manifestation and Motion" dated April 25,
1998, in the interest of substantial justice, the Motion
for Reconsideration dated June 12, 1998 and the
Motion dated April 25, 1998 are hereby GRANTED
and Brief for the Appellants attached to the
Manifestation and Motion of even date is hereby
ADMITTED.17

fee and other lawful fees with the Clerk of Court of the trial court
within the period for taking the appeal. When the petitioners
filed their notice of appeal in the trial court, on July 11, 1997,
the 1997 Rules of Civil Procedure was in effect for only ten
days. It appears that the counsel of the private respondents had
yet to familiarize himself with the 1997 Rules of Civil Procedure
and consequently the petitioners failed to pay the requisite
appellate court docket fee and other lawful fees with the Clerk of
Court of the trial court within the period for appeal. It was only
when the private respondents were required by the Court of
Appeals to comment on the motion to dismiss appeal filed by the
petitioners on the ground that the private respondents failed to
pay the required appellate docket fee did the private
respondents realize their lapse and forthwith paid the requisite
amount due. There is no showing in the record that the private
respondents deliberately refused to pay the requisite fee within
the period therefor and abandon their appeal.
Not to be forgotten is the fact that the trial court dismissed the
case solely because of its perception that, by amending their
complaint, the private respondents thereby conferred jurisdiction
to the trial court over the subject matter of their action. It is
imperative for the appellate court to review the ruling of the trial
court to avoid a miscarriage of justice.
Under the circumstances obtaining in the case at bar, we see no
cogent reason to reverse the resolutions of the respondent
court. It is the policy of the court to encourage hearing of
appeals on their merits. To resort to technicalities which the
petitioner capitalizes on in the instant petition would only tend to
frustrate rather than promote substantial justice.18
IN LIGHT OF THE FOREGOING, the petition is DENIED DUE
COURSE for lack of merit. The respondent court is directed to
continue with the proceedings before it with dispatch.
SO ORDERED.

Puno, (Chairman), Tinga, and Chico-Nazario, JJ., concur.


Austria-Martinez, J., no part.

We do not find any reversible error much less grave abuse of


discretion on the part of the court in reinstating the appeal of
the private respondents.
It bears stressing that under Rule 46, Section 5 of the Rules of
Court, the appellant was mandated to pay the fee for the
docketing of the appeal within fifteen days from date of notice of
the receipt by the Clerk of Court of the Court of Appeals of the
record on appeal from the trial court.
Sec. 5. Duty of appellant upon receipt of notice. It
shall be the duty of the appellant, within fifteen (15)
days from the date of the notice referred to in the
preceding section, to pay to the clerk of the Court of
Appeals the fee for the docketing of the appeal, and
within sixty (60) days from such notice to submit to
the court forty (40) printed copies of the record on
appeal, together with the proof of service of fifteen
(15) printed copies thereof upon the appellee.
However, the rule was amended by Section 4, Rule 41 of the
1997 Rules of Civil Procedure, which provides that the appellant
is mandated to pay to the appellate court the appellate docket

CIVIL PROCEDURE

AGUSTIN, E. P. | 58

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 167988

February 6, 2007

MA. CONCEPCION L. REGALADO, Petitioner,


vs.
ANTONIO S. GO, Respondent.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court, of the Resolution1 dated 30 August 2004 of the
Court of Appeals, finding petitioner Ma. Concepcion L. Regalado
(Atty. Regalado) guilty of indirect contempt. Likewise assailed in
this petition is the Resolution2 denying her Motion for
Reconsideration. The dispositive portion of the Resolution reads:
WHEREFORE, Atty. Ma. Concepcion Regalado of De Borja
Medialdea Bello Guevarra and Gerodias Law Offices is declared
GUILTY of INDIRECT CONTEMPT and is ordered to pay a fine of
Five Thousand Pesos (P5,000), with a STERN WARNING that a
repetition of the same or similar acts in the future will be dealt
with more severely. The imposed fine should be paid to this
Court upon finality hereof.
Let a copy of this resolution be furnished the Bar Confidant (sic),
the Integrated Bar of the Philippines and the Court Administrator
for investigation and possible administrative sanction.3
The present controversy stemmed from the complaint of illegal
dismissal filed before the Labor Arbiter by herein respondent
Antonio S. Go against Eurotech Hair Systems, Inc. (EHSI), and
its President Lutz Kunack and General Manager Jose E. Barin.

5. Ordering the payment of ten percent (10%) of the


total monetary award as attorneys fees in the sum of
Php188,000.00.
All other claims are hereby dismissed for lack of merit.
On appeal to the National Labor Relations Commission (NLRC),
EHSI, Kunack and Barin employed the legal services of De Borja
Medialdea Bello Guevarra and Gerodias Law Offices where herein
petitioner Atty. Regalado worked as an associate. 5
On 11 June 2001, the NLRC rendered a Decision6 reversing the
Labor Arbiters decision and declaring that respondent Gos
separation from employment was legal for it was attended by a
just cause and was validly effected by EHSI, Kunack and Barin.
The dispositive part of the decision reads:
WHEREFORE, the appealed decision is set aside. The complaint
below is dismissed for being without merit.
For lack of patent or palpable error, the Motion for
Reconsideration interposed by respondent Go was denied by the
NLRC in an Order7 dated 20 December 2001.
Aggrieved, respondent Go elevated the adverse decision to the
Court of Appeals which was docketed as CA-G.R. SP No. 69909
entitled, Antonio S. Go v. National Labor Relations Commission,

Eurotech Hair Systems, Inc., Lutz Kunack and Jose Barin.

On 9 July 2003, the Court of Appeals promulgated a Decision8


setting aside the ruling of the NLRC and reinstating the decision
of the Labor Arbiter adjudging EHSI, Kunack and Barin guilty of
illegal dismissal. The appellate court thus ordered EHSI, Kunack
and Barin to pay respondent Go full backwages, separation pay,
moral and exemplary damages. The fallo of the decision reads:

In a Decision4 dated 29 December 2000, the Labor Arbiter ruled


that respondent Go was illegally dismissed from employment,
the decretal portion of which reads:

WHEREFORE, the petition for certiorari is GRANTED. The


assailed decision of the NLRC promulgated on July 30, 2001 and
its Order dated December 20, 2001 are SET ASIDE while the
decision of Labor Arbiter Waldo Emerson R. Gan dated
December 29, 2000 declaring the dismissal of [herein
respondent Go] as illegal is hereby REINSTATED with the
modification that [EHSI] is hereby Ordered to pay [respondent
Go]:

WHEREFORE, premises considered, judgment is hereby rendered


as follows:

1. His full backwages from the time of his illegal


dismissal until the finality of this decision;

1. Declaring [EHSI, Kunack and Barin] guilty of illegal


dismissal;

2. Separation pay equal to one month pay for every


year of service;

2. Considering that reinstatement would not be


feasible because of strained relations, [EHSI, Kunack
and Barin] are ordered to pay [herein respondent Go]
backwages in the amount of Php900,000.00
(Php60,000 x 15 months), separation pay of
Php180,000.00 (one month pay for every year of
service = Php60,000 x 3 years);

3. Moral damages in the amount of P50,000.00; and


4. Exemplary damages in the amount of P20,000.00
The award of attorneys fees is DELETED.

3. Ordering [EHSI, Kunack and Barin] to pay


[respondent Go] Php500,000.00 as moral damages;

EHSI, Kunack and Barin were able to receive a copy of the


decision through registered mail on 17 July 2003 while
respondent Go received his copy on 21 July 2003.9

4. Ordering [EHSI, Kunack and Barin] to pay


[respondent Go] Php300,000 as exemplary damages;

On 16 July 2003, after the promulgation of the Court of Appeals


decision but prior to the receipt of the parties of their respective

CIVIL PROCEDURE

AGUSTIN, E. P. | 59

copies, the parties decided to settle the case and signed a


Release Waiver and Quitclaim10 with the approval of the Labor
Arbiter. In view of the amicable settlement, the Labor Arbiter, on
the same day, issued an Order11 dismissing the illegal dismissal
case with prejudice. The order thus reads:
In view of the Release, Waiver and Quitclaim voluntarily
executed by the [herein respondent] Antonio S. Go, let the
instant case be as it is hereby DISMISSED WITH PREJUDICE.
The execution of the compromise agreement was attended by
the counsel for EHSI, Kunack and Barin, petitioner Atty.
Regalado, and respondent Go, but in the absence and without
the knowledge of respondent Gos lawyer.12
After the receipt of a copy of the Court of Appeals decision,
respondent Go, through counsel, filed, on 29 July 2003, a
Manifestation with Omnibus Motion13 seeking to nullify the
Release Waiver and Quitclaim dated 16 July 2003 on the ground
of fraud, mistake or undue influence. In the same motion,
respondent Go, through counsel, moved that petitioner Atty.
Regalado be made to explain her unethical conduct for directly
negotiating with respondent Go without the knowledge of his
counsel. The motion thus prays:
WHEREFORE, premises considered, it is most respectfully prayed
for the Honorable Court to declare Null and Void the dismissal of
the instant (sic), with prejudice, by Labor (sic) Waldo Emerson
Gan, as well as the Release Waiver and Quitclaim dated July 16,
2003 signed by [herein respondent Go] for having been obtained
through mistake, fraud or undue influence committed by [EHSI,
Kunack and Barin] and their counsels (sic).
It is likewise prayed for [EHSI, Kunack and Barins] counsel,
particularly Atty. Ma. Concepcion Regalado, to be required to
explain why no disciplinary action should be taken against them
(sic) for their (sic), unethical conduct of directly negotiating with
[respondent Go] without the presence of undersigned counsel,
and for submitting the Release, Waiver and Quitclaim before
Labor Arbiter Waldo Emerson Gan knowing fully well that the
controversy between [respondent Go] and [EHSI] is still pending
before this Honorable Court.
[Respondent Go] likewise prays for such other relief [as may be]
just and equitable under the premises.14
For their part, EHSI, Kunack and Barin submitted a Manifestation
and Motion with Leave of Court15 praying that CA-G.R. SP No.
69909 be considered settled with finality in view of the amicable
settlement among the parties which resulted in the dismissal of
respondent Gos complaint with prejudice in the Labor Arbiters
Order dated 16 July 2003.
In addition, EHSI, Kunack and Barin also filed a Motion for
Reconsideration16 with an ad cautelam that in case of
unfavorable action on their foregoing Manifestation and Motion,
the appellate court should reconsider its decision dated 9 July
2003.
Acting on the motions, the appellate court issued a Resolution17
on 19 November 2003 annulling the Order of the Labor Arbiter
dated 16 July 2003 for lack of jurisdiction. It also denied for lack
of merit EHSI, Kunack and Barins Motion for Reconsideration Ad
Cautelam. In the same resolution, petitioner Atty. Regalado was
ordered to explain why she should not be cited for contempt of

CIVIL PROCEDURE

court for violating Canon 9 of the Canons of Professional Ethics.


The decretal portion of the Resolution reads:
WHEREFORE, premises considered, the Manifestation with
Omnibus Motion is PARTIALLY GRANTED. The order of Labor
Arbiter Gan dismissing the case with prejudice is hereby declared
NULL and VOID for lack of jurisdiction. [EHSI, Kunack and
Barins] counsel, [herein petitioner] Atty. Ma. Concepcion
Regalado is ordered to SHOW CAUSE within five (5) days from
receipt of this Resolution why she should not be cited for
contempt of court for directly negotiating with [herein
respondent Go] in violation of Canon 9 of the Canons of
Professional Ethics. On the other hand, the Motion for
Reconsideration Ad Cautelam is hereby denied for lack of merit.
EHSI, Kunack and Barin thus filed a Petition for Review on
Certiorari before this Court, assailing the Court of Appeals
decision promulgated on 9 July 2003 and its Resolution dated 19
November 2003, denying their Motion for Reconsideration. The
case is cognized by another division of this Court.
For her part, petitioner Atty. Regalado submitted a Compliance 18
and explained that she never took part in the negotiation for the
amicable settlement of the illegal dismissal case with respondent
Go which led to the execution of a compromise agreement by
the parties on 16 July 2003. EHSI, Kunack and Barin, through a
Mr. Ragay, a former EHSI employee and a close ally of
respondent Go, were the ones who negotiated the settlement.
Further, petitioner Atty. Regalado maintained that she never met
personally respondent Go, not until 16 July 2003, when the latter
appeared before the Labor Arbiter for the execution of the
Release Waiver and Quitclaim. Petitioner Atty. Regalado claimed
that she was in fact apprehensive to release the money to
respondent Go because the latter cannot present any valid
identification card to prove his identity. It was only upon the
assurance of Labor Arbiter Gan that Antonio S. Go and the
person representing himself as such were one and the same,
that the execution of the agreement was consummated.
Considering the circumstances, petitioner Atty. Regalado firmly
stood that there was no way that she had directly dealt with
respondent Go, to the latters damage and prejudice, and misled
him to enter into an amicable settlement with her client.
On 30 August 2004, the Court of Appeals issued a Resolution19
disregarding petitioner Atty. Regalados defenses and adjudging
her guilty of indirect contempt under Rule 71 of the Revised
Rules of Court. As declared by the appellate court, even granting
arguendo that petitioner Atty. Regalado did not participate in the
negotiation process, she was nonetheless under the obligation to
restrain her clients from doing acts that she herself was
prohibited to perform as mandated by Canon 16 of the Canons
of Professional Ethics. However, instead of preventing her clients
from negotiating with respondent Go who was unassisted by his
counsel, Atty. Regalado actively participated in the
consummation of the compromise agreement by dealing directly
with respondent Go and allowing him to sign the Release Waiver
and Quitclaim without his lawyer.
Undaunted, petitioner Atty. Regalado filed a Motion for
Reconsideration which was also denied by the appellate court for
lack of merit.20
Hence, this instant Petition for Review on Certiorari,21 raising the
following issues:

AGUSTIN, E. P. | 60

I.
WHETHER OR NOT THE COURT OF APPEALS COMPLETELY
VIOLATED PETITIONERS CONSTITUTIONAL RIGHTS.
II.
WHETHER OR NOT THE COURT OF APPEALS TOTALLY
DISREGARDED THE MANDATORY PROVISION OF RULE 71 OF
THE 1997 RULES OF CIVIL PROCEDURE.
III.
WHETHER OR NOT THE COURT OF APPEALS COMMITTED A
MANIFEST ERROR OF LAW IN RULING THAT PETITIONER IS
ESTOPPED FROM CHALLENGING ITS AUTHORITY TO
ENTERTAIN THE CONTEMPT CHARGES AGAINST HER.
IV.
WHETHER OR NOT THE COURT OF APPEALS ACTED WITH
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS OF
JURISDICTION IN DISREGARDING THE
OVERWHELMING EVIDENCE ON RECORD TO EFFECT THAT
PETITIONER DID NOT COMMIT ANY CONTUMACIOUS
CONDUCT.
V.
WHETHER OR NOT THE COURT OF APPEALS ACTED WITH
GRAVE ABUSE OF DISCRETION AND COMMITTED A GROSS
MISAPPRECIATION OF FACTS IN FINDING THE PETITIONER
GUILTY OF INDIRECT CONTEMPT ON THE BASIS OF THE
CONFLICTING,
UNCORROBORATED,
AND
UNVERIFIED
ASSERTIONS OF THE RESPONDENT.
Considering that the issues raised herein are both questions of
law and fact, and consistent with our policy that this Court is not
a trier of facts, we shall address only the pure questions of law
and leave the factual issues, which are supported by evidence,
as found by the appellate court. It is an oft-repeated principle
that in the exercise of the Supreme Courts power of review, the
Court is not a trier of facts and does not normally undertake the
re-examination of the evidence presented by the contending
parties during the trial of the case considering that the findings
of facts of the Court of Appeals, if supported by evidence, are
conclusive and binding upon this Court.1awphi1.net22
Contempt of court is a defiance of the authority, justice or
dignity of the court; such conduct as tends to bring the authority
and administration of the law into disrespect or to interfere with
or prejudice parties litigant or their witnesses during litigation. 23
It is defined as disobedience to the Court by acting in opposition
to its authority, justice, and dignity. It signifies not only a willful
disregard or disobedience of the courts orders, but such conduct
as tends to bring the authority of the court and the
administration of law into disrepute or in some manner to
impede the due administration of justice.24
The power to punish for contempt is inherent in all courts and is
essential to the preservation of order in judicial proceedings and
to the enforcement of judgments, orders, and mandates of the
court, and consequently, to the due administration of justice.25

CIVIL PROCEDURE

Thus, contempt proceedings has a dual function: (1) vindication


of public interest by punishment of contemptuous conduct; and
(2) coercion to compel the contemnor to do what the law
requires him to uphold the power of the Court, and also to
secure the rights of the parties to a suit awarded by the Court. 26
In our jurisdiction, the Rules of Court penalizes two types of
contempt, namely direct contempt and indirect contempt. 27
Direct contempt is committed in the presence of or so near a
court as to obstruct or interrupt the proceedings before the
same, and includes disrespect toward the court, offensive
personalities toward others, or refusal to be sworn or answer as
a witness, or to subscribe an affidavit or deposition when
lawfully required to do so.28
On the other hand, Section 3, Rule 71 of the Rules of Court
enumerates particular acts which constitute indirect contempt,
thus:
(a) Misbehavior of an officer of a court in the
performance of his official duties or in his official
transactions;
(b) Disobedience of or resistance to a lawful writ,
process, order, or judgment of a court, including the
act of a person who, after being dispossessed or
ejected from any real property by the judgment or
process of any court of competent jurisdiction, enters
or attempts or induces another to enter into or upon
such real property, for the purpose of executing acts
of ownership or possession, or in any manner disturbs
the possession given to the person adjudged to be
entitled thereto;
(c) Any abuse of or any unlawful interference with the
processes or proceedings of a court not constituting
direct contempt under Section 1 of this Rule;
(d) Any improper conduct tending, directly or
indirectly, to impede, obstruct, or degrade the
administration of justice;
(e) Assuming to be an attorney or an officer of a
court, and acting as such without authority;
(f) Failure to obey a subpoena duly served;
(g) The rescue, or attempted rescue, of a person or
property in the custody of an officer by virtue of an
order or process of a court held by him.
But nothing in this section shall be so construed as to prevent
the court from issuing process to bring the respondent into
court, or from holding him in custody pending such proceedings.
(Emphasis supplied.)29
Section 4, Rule 71 of the same Rules provides how proceedings
for indirect contempt should be commenced, thus:
SEC. 4. How proceedings commenced. Proceedings for indirect
contempt may be initiated motu proprio by the court against
which the contempt was committed by an order or any other

AGUSTIN, E. P. | 61

formal charge requiring the respondent to show cause why he


should not be punished for contempt.
In all other cases, charges for indirect contempt shall be
commenced by a verified petition with supporting particulars and
certified true copies of documents or papers involved therein,
and upon full compliance with the requirements for filing
initiatory pleadings for civil actions in the court concerned. If the
contempt charges arose out of or are related to a principal
action pending in the court, the petition for contempt shall allege
that fact but said petition shall be docketed, heard and decided
separately, unless the court in its discretion orders the
consolidation of the contempt charge and the principal action for
joint hearing and decision. (Emphases supplied.)
As can be gleaned above, the provisions of the Rules are
unequivocal. Indirect contempt proceedings may be initiated
only in two ways: (1) motu proprio by the court; or (2) through
a verified petition and upon compliance with the requirements
for initiatory pleadings. Procedural requirements as outlined
must be complied with.
There is no doubt that the complained acts of Atty. Regalado
would fall under paragraphs (a) and (d) of Section 3, Rule 71, as
in fact, she was adjudged guilty of indirect contempt. But were
the proceedings conducted in convicting petitioner done in
accordance with law?
In the instant case, the indirect contempt proceedings was
initiated by respondent Go through a Manifestation with
Omnibus Motion.30 It was based on the aforesaid Motion that the
appellate court issued a Resolution31 dated 19 November 2003,
requiring petitioner Atty. Regalado to show cause why she
should not be cited for contempt.
Clearly, respondent Gos Manifestation with Omnibus Motion was
the catalyst which set everything in motion and led to the
eventual conviction of Atty. Regalado. It was respondent Go who
brought to the attention of the appellate court the alleged
misbehavior committed by petitioner Atty. Regalado. Without
such positive act on the part of respondent Go, no indirect
contempt charge could have been initiated at all.
Indeed, the appellate court itself, in its Resolution dated 30
August 2004, made categorical findings as to how the contempt
charge was initiated, to wit:
In the present case, [respondents Go] Manifestation With
Omnibus Motion which led to our 19 November 2003 Resolution
requiring Atty. Regalado to explain why she should not be cited
for contempt, x x x.32
We cannot, therefore, argue that the Court of Appeals on its
own initiated the indirect contempt charge without contradicting
the factual findings made by the very same court which
rendered the questioned resolution.
It is true in Leonidas v. Judge Supnet,33 this Court ruled that the
contempt proceedings was considered commenced by the court
motu proprio even if the show cause order came after the filing
of the motions to cite for contempt filed by the adverse party.
The Decision thus reads:
Thus, independently of the motions filed by the Tamondong
Spouses, it was the Pasay MTC which commenced the contempt
proceedings motu proprio. No verified petition is required if

CIVIL PROCEDURE

proceedings for indirect contempt are initiated in this manner,


and the absence of a verified petition does not affect the
procedure adopted.
It is true that the Tamondong Spouses did file a Motion To Cite
Plaintiff For Contempt Of Court, dated May 17, 2000. In this
pleading they prayed that Union Bank be declared in indirect
contempt of court for its disobedience to the Pasay MTCs Order
dated May 9, 2000. This Order dated May 9, 2000 specifically
directed Union Bank to "return immediately to the defendants
the replevied motor vehicle." However, the Tamondong Spouses
unverified motion dated May 17, 2000 cannot invalidate the
contempt proceedings because these proceedings were initiated
by respondent judge motu proprio in accordance with Section 4,
Rule 71 of the 1997 Rules of Civil Procedure.
This above-cited case, however, has no application in the case at
bar for the factual milieu of the cases are different from each
other. In Leonidas, there was an order of the court that was
utterly violated by Union Bank. Thus, even in the absence of the
motion of spouses Tamondong to cite Union Bank in contempt,
the court a quo on its own can verily initiate the action. In the
present case, the appellate court could not have acquired
knowledge of petitioner Atty. Regalados misbehavior without
respondent Gos Manifestation with Omnibus Motion reiterating
the alleged deceitful conduct committed by the former.
Having painstakingly laid down that the instant case was not
initiated by the court motu proprio necessitates us to look into
the second mode of filing indirect contempt proceedings.
In cases where the court did not initiate the contempt charge,
the Rules prescribe that a verified petition which has complied
with the requirements of initiatory pleadings as outlined in the
heretofore quoted provision of second paragraph, Section 4,
Rule 71 of the Rules of Court, must be filed.
The manner upon which the case at bar was commenced is
clearly in contravention with the categorical mandate of the
Rules. Respondent Go filed a Manifestation with Omnibus
Motion, which was unverified and without any supporting
particulars
and
documents.
Such
procedural
flaw
notwithstanding, the appellate court granted the motion and
directed petitioner Atty. Regalado to show cause why she should
not be cited for contempt. Upon petitioner Atty. Regalados
compliance with the appellate courts directive, the tribunal
proceeded in adjudging her guilty of indirect contempt and
imposing a penalty of fine, completely ignoring the procedural
infirmities in the commencement of the indirect contempt action.
It bears to stress that the power to punish for contempt is not
limitless. It must be used sparingly with caution, restraint,
judiciousness, deliberation, and due regard to the provisions of
the law and the constitutional rights of the individual. 34
The limitations in the exercise of the power to punish for indirect
contempt are delineated by the procedural guidelines specified
under Section 4, Rule 71 of the Rules of Court. Strict compliance
with such procedural guidelines is mandatory considering that
proceedings against person alleged to be guilty of contempt are
commonly treated as criminal in nature. 35
As explained by Justice Florenz Regalado,36 the filing of a
verified petition that has complied with the requirements for the
filing of initiatory pleading, is mandatory, and thus states:

AGUSTIN, E. P. | 62

1. This new provision clarifies with a regularity norm the proper


procedure for commencing contempt proceedings. While such
proceeding has been classified as special civil action under the
former Rules, the heterogenous practice tolerated by the courts,
has been for any party to file a motion without paying any
docket or lawful fees therefore and without complying with the
requirements for initiatory pleadings, which is now required
in the second paragraph of this amended section.
xxxx
Henceforth, except for indirect contempt proceedings initiated
motu propio by order of or a formal charge by the offended
court, all charges shall be commenced by a verified
petition with full compliance with the requirements therefore
and shall be disposed in accordance with the second paragraph
of this section.
Time and again we rule that the use of the word "shall"
underscores the mandatory character of the Rule. The term
"shall" is a word of command, and one which has always or
which must be given a compulsory meaning, and it is generally
imperative or mandatory.37
In Enriquez v. Enriquez,38 this Court applied the word "shall" by
giving it mandatory and imperative import and ruled that noncompliance with the mandatory requirements of the Rules goes
into the very authority of the court to acquire jurisdiction over
the subject matter of the case, thus:
"However, the 1997 Rules of Civil Procedure, as amended, which
took effect on July 1, 1997, now require that appellate docket
and other lawful fees must be paid within the same period for
taking an appeal. This is clear from the opening sentence of
Section 4, Rule 41 of the same rules that, "(W)ithin the period
for taking an appeal, the appellant shall pay to the clerk of court
which rendered the judgment or final order appealed from, the
full amount of the appellate court docket and other lawful fees."
xxxx
Time and again, this Court has consistently held that payment of
docket fee within the prescribed period is mandatory for the
perfection of an appeal. Without such payment, the appellate
court does not acquire jurisdiction over the subject matter of the
action and the decision sought to be appealed from becomes
final and executory.39 (Emphases supplied.)
In United States v. de la Santa,40 which bears parallelism in the
instant case, we held:
The objection in this case is not, strictly speaking, to the
sufficiency of the complaint, but goes directly to the
jurisdiction of the court over the crime with which the
accused was charged. x x x. (Emphasis supplied.)
Even if the contempt proceedings stemmed from the main case
over which the court already acquired jurisdiction, the Rules
direct that the petition for contempt be treated independently of
the principal action. Consequently, the necessary prerequisites
for the filing of initiatory pleadings, such as the filing of a
verified petition, attachment of a certification on non-forum
shopping, and the payment of the necessary docket fees, must
be faithfully observed.41

CIVIL PROCEDURE

We now proceed to the issue of estoppel raised by the Court of


Appeals. When petitioner Atty. Regalado brought to the
attention of the appellate court through a Motion for
Reconsideration the remedial defect attendant to her conviction,
the Court of Appeals, instead of rectifying the palpable and
patent procedural error it earlier committed, altogether
disregarded the glaring mistake by interposing the doctrine of
estoppel. The appellate court ruled that having actively
participated in the contempt proceedings, petitioner Atty.
Regalado is now barred from impugning the Court of Appeals
jurisdiction over her contempt case citing the case of People v.
Regalario.42
We do not agree.

Laches is defined as the "failure or neglect for an unreasonable

and unexplained length of time, to do that which, by exercising


due diligence, could or should have been done earlier, it is
negligence or omission to assert a right within a reasonable
length of time, warranting a presumption that the party entitled
to assert it either has abandoned it or declined to assert it."43
The ruling in People v. Regalario44 that was based on the
landmark doctrine enunciated in Tijam v. Sibonghanoy45 on the
matter of jurisdiction by estoppel is the exception rather than
the rule. Estoppel by laches may be invoked to bar the issue of
lack of jurisdiction only in cases in which the factual milieu is
analogous to that in the cited case. In such controversies, laches
should have been clearly present; that is, lack of jurisdiction
must have been raised so belatedly as to warrant the
presumption that the party entitled to assert it had abandoned
or declined to assert it.46
In Sibonghanoy,47 the defense of lack of jurisdiction was raised
for the first time in a motion to dismiss filed by the Surety 48
almost 15 years after the questioned ruling had been rendered. 49
At several stages of the proceedings, in the court a quo as well
as in the Court of Appeals, the Surety invoked the jurisdiction of
the said courts to obtain affirmative relief and submitted its case
for final adjudication on the merits. It was only when the
adverse decision was rendered by the Court of Appeals that it
finally woke up to raise the question of jurisdiction.50
Clearly, the factual settings attendant in Sibonghanoy are not
present in the case at bar. Petitioner Atty. Regalado, after the
receipt of the Court of Appeals resolution finding her guilty of
contempt, promptly filed a Motion for Reconsideration assailing
the said courts jurisdiction based on procedural infirmity in
initiating the action. Her compliance with the appellate courts
directive to show cause why she should not be cited for
contempt and filing a single piece of pleading to that effect could
not be considered as an active participation in the judicial
proceedings so as to take the case within the milieu of
Sibonghanoy. Rather, it is the natural fear to disobey the
mandate of the court that could lead to dire consequences that
impelled her to comply.
The provisions of the Rules are worded in very clear and
categorical language. In case where the indirect contempt
charge is not initiated by the courts, the filing of a verified
petition which fulfills the requirements on initiatory pleadings is a
prerequisite. Beyond question now is the mandatory requirement
of a verified petition in initiating an indirect contempt
proceeding. Truly, prior to the amendment of the 1997 Rules of
Civil Procedure, mere motion without complying with the
requirements for initiatory pleadings was tolerated by the
courts.51 At the onset of the 1997 Revised Rules of Civil

AGUSTIN, E. P. | 63

Procedure, however,
countenanced.

such

practice

can

no

longer

be

Evidently, the proceedings attendant to the conviction of


petitioner Atty. Regalado for indirect contempt suffered a serious
procedural defect to which this Court cannot close its eyes
without offending the fundamental principles enunciated in the
Rules that we, ourselves, had promulgated.
The other issues raised on the merits of the contempt case have
become moot and academic.
WHEREFORE, premises considered, the instant Petition is
GRANTED. The indirect contempt proceedings before the Court
of Appeals is DECLARED null and void.
SO ORDERED.
MINITA V. CHICO-NAZARIO
Associate Justice

CIVIL PROCEDURE

AGUSTIN, E. P. | 64

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 174975

January 20, 2009

LUISA KHO MONTAER, ALEJANDRO MONTAER, JR.,


LILLIBETH MONTAER-BARRIOS, AND RHODORA
ELEANOR MONTAER-DALUPAN, Petitioners,
vs.
SHARI'A DISTRICT COURT, FOURTH SHARI'A JUDICIAL
DISTRICT, MARAWI CITY, LILING DISANGCOPAN, AND
ALMAHLEEN LILING S. MONTAER, Respondents.
DECISION
PUNO, C.J.:
This Petition for Certiorari and Prohibition seeks to set aside the
Orders of the Sharia District Court, Fourth Sharia Judicial
District, Marawi City, dated August 22, 2006 1 and September 21,
2006.2
On August 17, 1956, petitioner Luisa Kho Montaer, a Roman
Catholic, married Alejandro Montaer, Sr. at the Immaculate
Conception Parish in Cubao, Quezon City. 3 Petitioners Alejandro
Montaer, Jr., Lillibeth Montaer-Barrios, and Rhodora Eleanor
Montaer-Dalupan are their children.4 On May 26, 1995,
Alejandro Montaer, Sr. died.5

extends only to the settlement and distribution of the estate of


deceased Muslims.11
On December 12, 2005, private respondents filed a Motion for
Reconsideration.12 On December 28, 2005, petitioners filed an
Opposition to the Motion for Reconsideration, alleging that the
motion for reconsideration lacked a notice of hearing. 13 On
January 17, 2006, the Sharia District Court denied petitioners
opposition.14 Despite finding that the said motion for
reconsideration "lacked notice of hearing," the district court held
that such defect was cured as petitioners "were notified of the
existence of the pleading," and it took cognizance of the said
motion.15 The Sharia District Court also reset the hearing for the
motion for reconsideration.16
In its first assailed order dated August 22, 2006, the Sharia
District Court reconsidered its order of dismissal dated November
22, 2005.17 The district court allowed private respondents to
adduce further evidence.18 In its second assailed order dated
September 21, 2006, the Sharia District Court ordered the
continuation of trial, trial on the merits, adducement of further
evidence, and pre-trial conference.19
Seeking recourse before this Court, petitioners raise the
following issues:
I.
RESPONDENT SHARIA DISTRICT COURT MARAWI CITY
LACKS JURISDICTION OVER PETITIONERS WHO ARE ROMAN
CATHOLICS AND NON-MUSLIMS.
II.

On August 19, 2005, private respondents Liling Disangcopan and


her daughter, Almahleen Liling S. Montaer, both Muslims, filed
a "Complaint" for the judicial partition of properties before the
Sharia District Court.6 The said complaint was entitled
"Almahleen Liling S. Montaer and Liling M. Disangcopan v. the
Estates and Properties of Late Alejandro Montaer, Sr., Luisa
Kho Montaer, Lillibeth K. Montaer, Alejandro Kho Montaer,
Jr., and Rhodora Eleanor K. Montaer," and docketed as "Special
Civil Action No. 7-05."7 In the said complaint, private
respondents made the following allegations: (1) in May 1995,
Alejandro Montaer, Sr. died; (2) the late Alejandro Montaer,
Sr. is a Muslim; (3) petitioners are the first family of the
decedent; (4) Liling Disangcopan is the widow of the decedent;
(5) Almahleen Liling S. Montaer is the daughter of the
decedent; and (6) the estimated value of and a list of the
properties comprising the estate of the decedent.8 Private
respondents prayed for the Sharia District Court to order,
among others, the following: (1) the partition of the estate of
the decedent; and (2) the appointment of an administrator for
the estate of the decedent.9
Petitioners filed an Answer with a Motion to Dismiss mainly on
the following grounds: (1) the Sharia District Court has no
jurisdiction over the estate of the late Alejandro Montaer, Sr.,
because he was a Roman Catholic; (2) private respondents failed
to pay the correct amount of docket fees; and (3) private
respondents complaint is barred by prescription, as it seeks to
establish filiation between Almahleen Liling S. Montaer and the
decedent, pursuant to Article 175 of the Family Code.10
On November 22, 2005, the Sharia District Court dismissed the
private respondents complaint. The district court held that
Alejandro Montaer, Sr. was not a Muslim, and its jurisdiction

CIVIL PROCEDURE

RESPONDENT SHARIA DISTRICT COURT MARAWI CITY DID


NOT ACQUIRE JURISDICTION OVER "THE ESTATES AND
PROPERTIES OF THE LATE ALEJANDRO MONTAER, SR."
WHICH IS NOT A NATURAL OR JURIDICAL PERSON WITH
CAPACITY TO BE SUED.
III.
RESPONDENT SHARIA DISTRICT COURT DID NOT ACQUIRE
JURISDICTION OVER THE COMPLAINT OF PRIVATE
RESPONDENTS AGAINST PETITIONERS DUE TO NON-PAYMENT
OF THE FILING AND DOCKETING FEES.
IV.
RESPONDENT SHARIA DISTRICT COURTMARAWI CITY
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF JURISDICTION WHEN IT DENIED THE OPPOSITION OF
PETITIONERS AND THEN GRANTED THE MOTION FOR
RECONSIDERATION OF RESPONDENTS LILING DISANGCOPAN,
ET AL. WHICH WAS FATALLY DEFECTIVE FOR LACK OF A
"NOTICE OF HEARING."
V.
RESPONDENT SHARIA DISTRICT COURTMARAWI CITY
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OF JURISDICTION WHEN IT SET SPL. CIVIL ACTION 7-05
FOR TRIAL EVEN IF THE COMPLAINT PLAINLY REVEALS THAT
RESPONDENT ALMAHLEEN LILING S. MONTAER SEEKS

AGUSTIN, E. P. | 65

RECOGNITION FROM ALEJANDRO MONTAER, SR. WHICH


CAUSE OF ACTION PRESCRIBED UPON THE DEATH OF
ALEJANDRO MONTAER, SR. ON MAY 26, 1995.
In their Comment to the Petition for Certiorari, private
respondents stress that the Sharia District Court must be given
the opportunity to hear and decide the question of whether the
decedent is a Muslim in order to determine whether it has
jurisdiction.20
Jurisdiction: Settlement of the Estate of Deceased Muslims
Petitioners first argument, regarding the Sharia District Courts
jurisdiction, is dependent on a question of fact, whether the late
Alejandro Montaer, Sr. is a Muslim. Inherent in this argument is
the premise that there has already been a determination
resolving such a question of fact. It bears emphasis, however,
that the assailed orders did not determine whether the decedent
is a Muslim. The assailed orders did, however, set a hearing for
the purpose of resolving this issue.

Montaer, Sr. is not a Muslim. Jurisdiction of a court over the


nature of the action and its subject matter does not depend
upon the defenses set forth in an answer25 or a motion to
dismiss.26 Otherwise, jurisdiction would depend almost entirely
on the defendant27 or result in having "a case either thrown out
of court or its proceedings unduly delayed by simple
stratagem.28 Indeed, the "defense of lack of jurisdiction which is
dependent on a question of fact does not render the court to
lose or be deprived of its jurisdiction."29
The same rationale applies to an answer with a motion to
dismiss.30 In the case at bar, the Sharia District Court is not
deprived of jurisdiction simply because petitioners raised as a
defense the allegation that the deceased is not a Muslim. The
Sharia District Court has the authority to hear and receive
evidence to determine whether it has jurisdiction, which requires
an a priori determination that the deceased is a Muslim. If after
hearing, the Sharia District Court determines that the deceased
was not in fact a Muslim, the district court should dismiss the
case for lack of jurisdiction.
Special Proceedings

Article 143(b) of Presidential Decree No. 1083, otherwise known


as the Code of Muslim Personal Laws of the Philippines, provides
that the Sharia District Courts have exclusive original jurisdiction
over the settlement of the estate of deceased Muslims:
ARTICLE 143. Original jurisdiction. (1) The Shari'a District
Court shall have exclusive original jurisdiction over:
xxxx
(b) All cases involving disposition, distribution and settlement of
the estate of deceased Muslims, probate of wills, issuance of
letters of administration or appointment of administrators or
executors regardless of the nature or the aggregate value of the
property.
The determination of the nature of an action or proceeding is
controlled by the averments and character of the relief sought in
the complaint or petition.21 The designation given by parties to
their own pleadings does not necessarily bind the courts to treat
it according to the said designation. Rather than rely on "a falsa
descriptio or defective caption," courts are "guided by the
substantive averments of the pleadings."22
Although private respondents designated the pleading filed
before the Sharia District Court as a "Complaint" for judicial
partition of properties, it is a petition for the issuance of letters
of administration, settlement, and distribution of the estate of
the decedent. It contains sufficient jurisdictional facts required
for the settlement of the estate of a deceased Muslim,23 such as
the fact of Alejandro Montaer, Sr.s death as well as the
allegation that he is a Muslim. The said petition also contains an
enumeration of the names of his legal heirs, so far as known to
the private respondents, and a probable list of the properties left
by the decedent, which are the very properties sought to be
settled before a probate court. Furthermore, the reliefs prayed
for reveal that it is the intention of the private respondents to
seek judicial settlement of the estate of the decedent.24 These
include the following: (1) the prayer for the partition of the
estate of the decedent; and (2) the prayer for the appointment
of an administrator of the said estate.
We cannot agree with the contention of the petitioners that the
district court does not have jurisdiction over the case because of
an allegation in their answer with a motion to dismiss that

CIVIL PROCEDURE

The underlying assumption in petitioners second argument, that


the proceeding before the Sharia District Court is an ordinary
civil action against a deceased person, rests on an erroneous
understanding of the proceeding before the court a quo. Part of
the confusion may be attributed to the proceeding before the
Sharia District Court, where the parties were designated either
as plaintiffs or defendants and the case was denominated as a
special civil action. We reiterate that the proceedings before the
court a quo are for the issuance of letters of administration,
settlement, and distribution of the estate of the deceased, which
is a special proceeding. Section 3(c) of the Rules of Court
(Rules) defines a special proceeding as "a remedy by which a
party seeks to establish a status, a right, or a particular fact."
This Court has applied the Rules, particularly the rules on special
proceedings, for the settlement of the estate of a deceased
Muslim.31 In a petition for the issuance of letters of
administration, settlement, and distribution of estate, the
applicants seek to establish the fact of death of the decedent
and later to be duly recognized as among the decedents heirs,
which would allow them to exercise their right to participate in
the settlement and liquidation of the estate of the decedent.32
Here, the respondents seek to establish the fact of Alejandro
Montaer, Sr.s death and, subsequently, for private respondent
Almahleen Liling S. Montaer to be recognized as among his
heirs, if such is the case in fact.
Petitioners argument, that the prohibition against a decedent or
his estate from being a party defendant in a civil action33 applies
to a special proceeding such as the settlement of the estate of
the deceased, is misplaced. Unlike a civil action which has
definite adverse parties, a special proceeding has no definite
adverse party. The definitions of a civil action and a special
proceeding, respectively, in the Rules illustrate this difference. A
civil action, in which "a party sues another for the enforcement
or protection of a right, or the prevention or redress of a
wrong"34 necessarily has definite adverse parties, who are either
the plaintiff or defendant.35 On the other hand, a special
proceeding, "by which a party seeks to establish a status, right,
or a particular fact,"36 has one definite party, who petitions or
applies for a declaration of a status, right, or particular fact, but
no definite adverse party. In the case at bar, it bears emphasis
that the estate of the decedent is not being sued for any cause
of action. As a special proceeding, the purpose of the settlement
of the estate of the decedent is to determine all the assets of the
estate,37 pay its liabilities,38 and to distribute the residual to
those entitled to the same.39

AGUSTIN, E. P. | 66

Docket Fees
Petitioners third argument, that jurisdiction was not validly
acquired for non-payment of docket fees, is untenable.
Petitioners point to private respondents petition in the
proceeding before the court a quo, which contains an allegation
estimating the decedents estate as the basis for the conclusion
that what private respondents paid as docket fees was
insufficient. Petitioners argument essentially involves two
aspects: (1) whether the clerk of court correctly assessed the
docket fees; and (2) whether private respondents paid the
correct assessment of the docket fees.
Filing the appropriate initiatory pleading and the payment of the
prescribed docket fees vest a trial court with jurisdiction over the
subject matter.40 If the party filing the case paid less than the
correct amount for the docket fees because that was the amount
assessed by the clerk of court, the responsibility of making a
deficiency assessment lies with the same clerk of court. 41 In
such a case, the lower court concerned will not automatically
lose jurisdiction, because of a partys reliance on the clerk of
courts insufficient assessment of the docket fees. 42 As "every
citizen has the right to assume and trust that a public officer
charged by law with certain duties knows his duties and
performs them in accordance with law," the party filing the case
cannot be penalized with the clerk of courts insufficient
assessment.43 However, the party concerned will be required to
pay the deficiency.44
In the case at bar, petitioners did not present the clerk of courts
assessment of the docket fees. Moreover, the records do not
include this assessment. There can be no determination of
whether private respondents correctly paid the docket fees
without the clerk of courts assessment.
Exception to Notice of Hearing
Petitioners fourth argument, that private respondents motion
for reconsideration before the Sharia District Court is defective
for lack of a notice of hearing, must fail as the unique
circumstances in the present case constitute an exception to this
requirement. The Rules require every written motion to be set
for hearing by the applicant and to address the notice of hearing
to all parties concerned.45 The Rules also provide that "no
written motion set for hearing shall be acted upon by the court
without proof of service thereof."46 However, the Rules allow a
liberal construction of its provisions "in order to promote [the]
objective of securing a just, speedy, and inexpensive disposition
of every action and proceeding."47 Moreover, this Court has
upheld a liberal construction specifically of the rules of notice of
hearing in cases where "a rigid application will result in a
manifest failure or miscarriage of justice especially if a party
successfully shows that the alleged defect in the questioned final
and executory judgment is not apparent on its face or from the
recitals contained therein."48 In these exceptional cases, the
Court considers that "no party can even claim a vested right in
technicalities," and for this reason, cases should, as much as
possible, be decided on the merits rather than on technicalities.49

In addition, the present case calls for a liberal construction of


the rules on notice of hearing, because the rights of the
petitioners were not affected. This Court has held that an
exception to the rules on notice of hearing is where it appears
that the rights of the adverse party were not affected. 50 The
purpose for the notice of hearing coincides with procedural due
process,51 for the court to determine whether the adverse party
agrees or objects to the motion, as the Rules do not fix any
period within which to file a reply or opposition.52 In probate
proceedings, "what the law prohibits is not the absence of
previous notice, but the absolute absence thereof and lack of
opportunity to be heard."53 In the case at bar, as evident from
the Sharia District Courts order dated January 17, 2006,
petitioners counsel received a copy of the motion for
reconsideration in question. Petitioners were certainly not denied
an opportunity to study the arguments in the said motion as
they filed an opposition to the same. Since the Sharia District
Court reset the hearing for the motion for reconsideration in the
same order, petitioners were not denied the opportunity to
object to the said motion in a hearing. Taken together, these
circumstances show that the purpose for the rules of notice of
hearing, procedural process, was duly observed.
Prescription and Filiation
Petitioners fifth argument is premature. Again, the Sharia
District Court has not yet determined whether it has jurisdiction
to settle the estate of the decedent. In the event that a special
proceeding for the settlement of the estate of a decedent is
pending, questions regarding heirship, including prescription in
relation to recognition and filiation, should be raised and settled
in the said proceeding.54 The court, in its capacity as a probate
court, has jurisdiction to declare who are the heirs of the
decedent.55 In the case at bar, the determination of the heirs of
the decedent depends on an affirmative answer to the question
of whether the Sharia District Court has jurisdiction over the
estate of the decedent.
IN VIEW WHEREOF, the petition is DENIED. The Orders of the
Sharia District Court, dated August 22, 2006 and September 21,
2006 respectively, are AFFIRMED. Cost against petitioners.
SO ORDERED.
REYNATO S. PUNO
Chief Justice

The case at bar falls under this exception. To deny the Sharia
District Court of an opportunity to determine whether it has
jurisdiction over a petition for the settlement of the estate of a
decedent alleged to be a Muslim would also deny its inherent
power as a court to control its process to ensure conformity with
the law and justice. To sanction such a situation simply because
of a lapse in fulfilling the notice requirement will result in a
miscarriage of justice.

CIVIL PROCEDURE

AGUSTIN, E. P. | 67

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION

During the pendency of the case, the Senate Blue Ribbon


Committee and Committee on Justice and Human Rights
conducted a hearing in aid of legislation on the matter of land
registration and titling. In particular, the legislative investigation
looked into the issuance of fake titles and focused on how
respondent was able to acquire TCT Nos. 135604, 135605 and
135606.

G.R. No. 149576 August 8, 2006


REPUBLIC OF THE PHILIPPINES, represented by the
Land Registration Authority, Petitioner,
vs.
KENRICK DEVELOPMENT CORPORATION, Respondent.
DECISION
CORONA, J.:
The Republic of the Philippines assails the May 31, 2001 decision
1
and August 20, 2001 resolution of the Court of Appeals in CAG.R. SP No. 52948 in this petition for review under Rule 45 of
the Rules of Court.
This case stemmed from the construction by respondent Kenrick
Development Corporation of a concrete perimeter fence around
some parcels of land located behind the Civil Aviation Training
Center of the Air Transportation Office (ATO) in 1996. As a
result, the ATO was dispossessed of some 30,228 square meters
of prime land. Respondent justified its action with a claim of
ownership over the property. It presented Transfer Certificate of
Title (TCT) Nos. 135604, 135605 and 135606 issued in its name
and which allegedly originated from TCT No. 17508 registered in
the name of one Alfonso Concepcion.
ATO verified the authenticity of respondents titles with the Land
Registration Authority (LRA). On May 17, 1996, Atty. Jose
Loriega, head of the Land Title Verification Task Force of the
LRA, submitted his report. The Registrar of Deeds of Pasay City
had no record of TCT No. 17508 and its ascendant title, TCT No.
5450. The land allegedly covered by respondents titles was also
found to be within Villamor Air Base (headquarters of the
Philippine Air Force) in Pasay City.
By virtue of the report, the Office of the Solicitor General (OSG),
on September 3, 1996, filed a complaint for revocation,
annulment and cancellation of certificates of title in behalf of the
Republic of the Philippines (as represented by the LRA) against
respondent and Alfonso Concepcion. It was raffled to Branch 114
of the Regional Trial Court of Pasay City where it was docketed
as Civil Case No. 96-1144.
On December 5, 1996, respondent filed its answer which was
purportedly signed by Atty. Onofre Garlitos, Jr. as counsel for
respondent.
Since Alfonso Concepcion could not be located and served with
summons, the trial court ordered the issuance of an alias
summons by publication against him on February 19, 1997.
The case was thereafter punctuated by various incidents relative
to modes of discovery, pre-trial, postponements or continuances,
motions to dismiss, motions to declare defendants in default and
other procedural matters.

CIVIL PROCEDURE

During the congressional hearing held on November 26, 1998,


one of those summoned was Atty. Garlitos, respondents former
counsel. He testified that he prepared respondents answer and
transmitted an unsigned draft to respondents president, Mr.
Victor Ong. The signature appearing above his name was not
his. He authorized no one to sign in his behalf either. And he did
not know who finally signed it.
With Atty. Garlitos revelation, the Republic promptly filed an
urgent motion on December 3, 1998 to declare respondent in
default, 2 predicated on its failure to file a valid answer. The
Republic argued that, since the person who signed the answer
was neither authorized by Atty. Garlitos nor even known to him,
the answer was effectively an unsigned pleading. Pursuant to
Section 3, Rule 7 of the Rules of Court, 3 it was a mere scrap of
paper and produced no legal effect.
On February 19, 1999, the trial court issued a resolution
granting the Republics motion. 4 It found respondents answer
to be sham and false and intended to defeat the purpose of the
rules. The trial court ordered the answer stricken from the
records, declared respondent in default and allowed the Republic
to present its evidence ex parte.
The Republic presented its evidence ex parte, after which it
rested its case and formally offered its evidence.
Meanwhile, respondent sought reconsideration of the February
19, 1999 resolution but the trial court denied it.
Aggrieved, respondent elevated the matter to the Court of
Appeals via a petition for certiorari 5 seeking to set aside the
February 19, 1999 resolution of the trial court. Respondent
contended that the trial court erred in declaring it in default for
failure to file a valid and timely answer.
On May 31, 2001, the Court of Appeals rendered the assailed
decision. It found Atty. Garlitos statements in the legislative
hearing to be unreliable since they were not subjected to crossexamination. The appellate court also scrutinized Atty. Garlitos
acts after the filing of the answer 6 and concluded that he
assented to the signing of the answer by somebody in his stead.
This supposedly cured whatever defect the answer may have
had. Hence, the appellate court granted respondents petition for
certiorari. It directed the lifting of the order of default against
respondent and ordered the trial court to proceed to trial with
dispatch. The Republic moved for reconsideration but it was
denied. Thus, this petition.
Did the Court of Appeals err in reversing the trial courts order
which declared respondent in default for its failure to file a valid
answer? Yes, it did.
A party may, by his words or conduct, voluntarily adopt or ratify
anothers statement. 7 Where it appears that a party clearly and
unambiguously assented to or adopted the statements of
another, evidence of those statements is admissible against him.
8
This is the essence of the principle of adoptive admission.

AGUSTIN, E. P. | 68

An adoptive admission is a partys reaction to a statement or


action by another person when it is reasonable to treat the
partys reaction as an admission of something stated or implied
by the other person. 9 By adoptive admission, a third persons
statement becomes the admission of the party embracing or
espousing it. Adoptive admission may occur when a party:
(a) expressly agrees to or concurs in an oral statement made by
another; 10
(b) hears a statement and later on essentially repeats it;

11

(c) utters an acceptance or builds upon the assertion of another;

Therefore, only the signature of either the party himself or his


counsel operates to validly convert a pleading from one that is
unsigned to one that is signed.
Counsels authority and duty to sign a pleading are personal to
him. He may not delegate it to just any person.
The signature of counsel constitutes an assurance by him that
he has read the pleading; that, to the best of his knowledge,
information and belief, there is a good ground to support it; and
that it is not interposed for delay. 16 Under the Rules of Court, it
is counsel alone, by affixing his signature, who can certify to
these matters.

12

(d) replies by way of rebuttal to some specific points raised by


another but ignores further points which he or she has heard the
other make 13 or
(e) reads and signs a written statement made by another.

14

Here, respondent accepted the pronouncements of Atty. Garlitos


and built its case on them. At no instance did it ever deny or
contradict its former counsels statements. It went to great
lengths to explain Atty. Garlitos testimony as well as its
implications, as follows:
1. While Atty. Garlitos denied signing the answer, the fact was
that the answer was signed. Hence, the pleading could not be
considered invalid for being an unsigned pleading. The fact that
the person who signed it was neither known to Atty. Garlitos nor
specifically authorized by him was immaterial. The important
thing was that the answer bore a signature.
2. While the Rules of Court requires that a pleading must be
signed by the party or his counsel, it does not prohibit a counsel
from giving a general authority for any person to sign the
answer for him which was what Atty. Garlitos did. The person
who actually signed the pleading was of no moment as long as
counsel knew that it would be signed by another. This was
similar to addressing an authorization letter "to whom it may
concern" such that any person could act on it even if he or she
was not known beforehand.
3. Atty. Garlitos testified that he prepared the answer; he never
disowned its contents and he resumed acting as counsel for
respondent subsequent to its filing. These circumstances show
that Atty. Garlitos conformed to or ratified the signing of the
answer by another.
Respondent repeated these statements of Atty. Garlitos in its
motion for reconsideration of the trial courts February 19, 1999
resolution. And again in the petition it filed in the Court of
Appeals as well as in the comment 15 and memorandum it
submitted to this Court.

The preparation and signing of a pleading constitute legal work


involving practice of law which is reserved exclusively for the
members of the legal profession. Counsel may delegate the
signing of a pleading to another lawyer 17 but cannot do so
in favor of one who is not. The Code of Professional
Responsibility provides:
Rule 9.01 A lawyer shall not delegate to any unqualified
person the performance of any task which by law may only be
performed by a member of the Bar in good standing.
Moreover, a signature by agents of a lawyer amounts to signing
by unqualified persons, 18 something the law strongly proscribes.
Therefore, the blanket authority respondent claims Atty. Garlitos
entrusted to just anyone was void. Any act taken pursuant to
that authority was likewise void. There was no way it could have
been cured or ratified by Atty. Garlitos subsequent acts.
Moreover, the transcript of the November 26, 1998 Senate
hearing shows that Atty. Garlitos consented to the signing of the
answer by another "as long as it conformed to his draft." We
give no value whatsoever to such self-serving statement.
No doubt, Atty. Garlitos could not have validly given blanket
authority for just anyone to sign the answer. The trial court
correctly ruled that respondents answer was invalid and of no
legal effect as it was an unsigned pleading. Respondent was
properly declared in default and the Republic was rightly allowed
to present evidence ex parte.
Respondent insists on the liberal application of the rules. It
maintains that even if it were true that its answer was
supposedly an unsigned pleading, the defect was a mere
technicality that could be set aside.
Procedural requirements which have often been disparagingly
labeled as mere technicalities have their own valid raison d etre
in the orderly administration of justice. To summarily brush them
aside may result in arbitrariness and injustice. 19

Evidently, respondent completely adopted Atty. Garlitos


statements as its own. Respondents adoptive admission
constituted a judicial admission which was conclusive on it.

The Courts pronouncement in Garbo v. Court of Appeals


relevant:

Contrary to respondents position, a signed pleading is one that


is signed either by the party himself or his counsel. Section 3,
Rule 7 is clear on this matter. It requires that a pleading must be
signed by the party or counsel representing him.

Procedural rules are [tools] designed to facilitate the


adjudication of cases. Courts and litigants alike are thus
[enjoined] to abide strictly by the rules. And while the Court, in
some instances, allows a relaxation in the application of the
rules, this, we stress, was never intended to forge a bastion for

CIVIL PROCEDURE

20

is

AGUSTIN, E. P. | 69

erring litigants to violate the rules with impunity. The liberality in


the interpretation and application of the rules applies only in
proper cases and under justifiable causes and circumstances.
While it is true that litigation is not a game of technicalities, it is
equally true that every case must be prosecuted in accordance
with the prescribed procedure to insure an orderly and speedy
administration of justice.
Like all rules, procedural rules should be followed except only
when, for the most persuasive of reasons, they may be relaxed
to relieve a litigant of an injustice not commensurate with the
degree of his thoughtlessness in not complying with the
prescribed procedure. 21 In this case, respondent failed to show
any persuasive reason why it should be exempted from strictly
abiding by the rules.
As a final note, the Court cannot close its eyes to the acts
committed by Atty. Garlitos in violation of the ethics of the legal
profession. Thus, he should be made to account for his possible
misconduct.
WHEREFORE, the petition is hereby GRANTED. The May 31,
2001 decision and August 20, 2001 resolution of the Court of
Appeals in CA-G.R. SP No. 52948 are REVERSED and SET
ASIDE and the February 19, 1999 resolution of the Regional
Trial Court of Pasay City, Branch 114 declaring respondent in
default is hereby REINSTATED.
Let a copy of this decision be furnished the Commission on Bar
Discipline of the Integrated Bar of the Philippines for the
commencement of disbarment proceedings against Atty. Onofre
Garlitos, Jr. for his possible unprofessional conduct not befitting
his position as an officer of the court.
SO ORDERED.
RENATO C. CORONA
Associate Justice

CIVIL PROCEDURE

AGUSTIN, E. P. | 70

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 165952

July 28, 2008

ANECO REALTY AND DEVELOPMENT CORPORATION,


Petitioner,
vs.
LANDEX DEVELOPMENT CORPORATION, Respondent.
DECISION
REYES, R.T., J.:
THIS is a simple case of a neighbor seeking to restrain the
landowner from fencing his own property. The right to fence
flows from the right of ownership. Absent a clear legal and
enforceable right, We will not unduly restrain the landowner
from exercising an inherent proprietary right.
Before Us is a petition for review on certiorari of the Decision1 of
the Court of Appeals (CA) affirming the Order2 of the Regional
Trial Court (RTC) dismissing the complaint for injunction filed by
petitioner Aneco Realty and Development Corporation (Aneco)
against respondent Landex Development Corporation (Landex).
Facts
Fernandez Hermanos Development, Inc. (FHDI) is the original
owner of a tract of land in San Francisco Del Monte, Quezon
City. FHDI subdivided the land into thirty-nine (39) lots.3 It later
sold twenty-two (22) lots to petitioner Aneco and the remaining
seventeen (17) lots to respondent Landex.4
The dispute arose when Landex started the construction of a
concrete wall on one of its lots. To restrain construction of the
wall, Aneco filed a complaint for injunction5 with the RTC in
Quezon City. Aneco later filed two (2) supplemental complaints
seeking to demolish the newly-built wall and to hold Landex
liable for two million pesos in damages.6
Landex filed its Answer7 alleging, among others, that Aneco was
not deprived access to its lots due to the construction of the
concrete wall. Landex claimed that Aneco has its own entrance
to its property along Miller Street, Resthaven Street, and San
Francisco del Monte Street. The Resthaven access, however, was
rendered inaccessible when Aneco constructed a building on said
street. Landex also claimed that FHDI sold ordinary lots, not
subdivision lots, to Aneco based on the express stipulation in the
deed of sale that FHDI was not interested in pursuing its own
subdivision project.
RTC Disposition
On June 19, 1996, the RTC rendered a Decision8 granting the
complaint for injunction, disposing as follows:

1. To stop the completion of the concrete wall and


excavation of the road lot in question and if the same
is already completed, to remove the same and to
return the lot to its original situation;
2. To pay actual and compensatory damage to the
plaintiff in the total amount of P50,000.00;
3. To pay attorneys fees in the amount of
P20,000.00;
4. To pay the cost.
SO ORDERED.9
Landex moved for reconsideration. 10 Records reveal that Landex
failed to include a notice of hearing in its motion for
reconsideration as required under Section 5, Rule 15 of the 1997
Rules of Civil Procedure. Realizing the defect, Landex later filed a
motion11 setting a hearing for its motion for reconsideration.
Aneco countered with a motion for execution12 claiming that the
RTC decision is already final and executory.
Acting on the motion of Landex, the RTC set a hearing on the
motion for reconsideration on August 28, 1996. Aneco failed to
attend the slated hearing. The RTC gave Aneco additional time
to file a comment on the motion for reconsideration.13
On March 13, 1997, the RTC issued an order14 denying the
motion for execution of Aneco.
On March 31, 1997, the RTC issued an order granting the motion
for reconsideration of Landex and dismissing the complaint of
Aneco. In granting reconsideration, the RTC stated:
In previously ruling for the plaintiff, this Court anchored its
decision on the ruling of the Supreme Court in the case of
"White Plains Association vs. Legaspi, 193 SCRA 765," wherein
the issue involved was the ownership of a road lot, in an
existing, fully developed and authorized subdivision, which after
a second look, is apparently inapplicable to the instant case at
bar, simply because the property in question never did exist as a
subdivision. Since, the property in question never did exist as a
subdivision, the limitations imposed by Section 1 of Republic Act
No. 440, that no portion of a subdivision road lot shall be closed
without the approval of the Court is clearly in appropriate to the
case at bar.
The records show that the plaintiffs property has access to a
public road as it has its own ingress and egress along Miller St.;
That plaintiffs property is not isolated as it is bounded by Miller
St. and Resthaven St. in San Francisco del Monte, Quezon City;
that plaintiff could easily make an access to a public road within
the bounds and limits of its own property; and that the
defendant has not yet been indemnified whatsoever for the use
of his property, as mandated by the Bill of rights. The foregoing
circumstances, negates the alleged plaintiffs right of way. 15
Aneco appealed to the CA.16
CA Disposition

Wherefore, premises considered, and in the light aforecited


decision of the Supreme Court judgment is hereby rendered in
favor of the plaintiff and the defendant is hereby ordered:

CIVIL PROCEDURE

On March 31, 2003, the CA rendered a Decision17 affirming the


RTC order, disposing as follows:

AGUSTIN, E. P. | 71

WHEREFORE, in consideration of the foregoing, the instant


appeal is perforce dismissed. Accordingly, the order dated 31
March 1996 is hereby affirmed.
SO ORDERED.18
In affirming the RTC dismissal of the complaint for injunction,
the CA held that Aneco knew at the time of the sale that the lots
sold by FHDI were not subdivision units based on the express
stipulation in the deed of sale that FHDI, the seller, was no
longer interested in pursuing its subdivision project, thus:
The subject property ceased to be a road lot when its former
owner (Fernandez Hermanos, Inc.) sold it to appellant Aneco not
as subdivision lots and without the intention of pursuing the
subdivision project. The law in point is Article 624 of the New
Civil Code, which provides:
Art. 624. The existence of an apparent sign of easement
between two estates, established or maintained by the owner of
both, shall be considered, should either of them be alienated, as
a title in order that the easement may continue actively and
passively, unless, at the time the ownership of the two estates is
divided, the contrary should be provided in the title of
conveyance of either of them, or the sign aforesaid should be
removed before the execution of the deed. This provision shall
also apply in case of the division of a thing owned in common by
two or more persons.

An easement involves an abnormal restriction on the property of


the servient owner and is regarded as a charge or encumbrance
on the servient owner and is regarded as a charge or
encumbrance on the servient estate (Cristobal v. CA, 291 SCRA
122). The essential requisites to be entitled to a compulsory
easement of way are: 1) that the dominant estate is surrounded
by other immovables and has no adequate outlet to a public
highway; 2) that proper indemnity has been paid; 3) that the
isolation was not due to acts of the proprietor of the dominant
estate; 4) that the right of way claimed is at a point least
prejudicial to the servient estate and in so far as consistent with
this rule, where the distance from the dominant estate to a
public highway may be the shortest (Cristobal v. Court of
Appeals, 291 SCRA 122).
An in depth examination of the evidence adduced and offered by
appellant Aneco, showed that it had failed to prove the existence
of the aforementioned requisites, as the burden thereof lies
upon the appellant Aneco.20
Aneco moved for reconsideration but its motion was denied. 21
Hence, the present petition or appeal by certiorari under Rule
45.
Issues
Petitioner Aneco assigns quadruple errors to the CA in the
following tenor:

Viewed from the aforesaid law, there is no question that the law
allows the continued use of an apparent easement should the
owner alienate the property to different persons. It is
noteworthy to emphasize that the lot in question was provided
by the previous owner (Fernandez Hermanos, Inc.) as a road lot
because of its intention to convert it into a subdivision project.
The previous owner even applied for a development permit over
the subject property. However, when the twenty-two (22) lots
were sold to appellant Aneco, it was very clear from the sellers
deed of sale that the lots sold ceased to be subdivision lots. The
seller even warranted that it shall undertake to extend all the
necessary assistance for the consolidation of the subdivided lots,
including the execution of the requisite manifestation before the
appropriate government agencies that the seller is no longer
interested in pursuing the subdivision project. In fine, appellant
Aneco knew from the very start that at the time of the sale, the
22 lots sold to it were not intended as subdivision units,
although the titles to the different lots have yet to be
consolidated. Consequently, the easement that used to exist on
the subject lot ceased when appellant Aneco and the former
owner agreed that the lots would be consolidated and would no
longer be intended as a subdivision project.

A.

Appellant Aneco insists that it has the intention of continuing the


subdivision project earlier commenced by the former owner. It
also holds on to the previous development permit granted to
Fernandez Hermanos, Inc. The insistence is futile. Appellant
Aneco did not acquire any right from the said previous owner
since the latter itself expressly stated in their agreement that it
has no more intention of continuing the subdivision project. If
appellant desires to convert its property into a subdivision
project, it has to apply in its own name, and must have its own
provisions for a road lot.19

THE COURT OF APPEALS GRAVELY ERRED IN


APPLYING THE LIBERAL CONSTRUCTION OF THE
RULES IN ORDER TO SUSTAIN THE TRIAL COURTS
ORDER DATED 31 MARCH 1997.

Anent the issue of compulsory easement of right of way, the CA


held that Aneco failed to prove the essential requisites to avail of
such right, thus:

THE COURT OF APPEALS GRAVELY ERRED IN


DISMISSING
PETITIONERS
APPEAL
AND
SUSTAINING THE TRIAL COURTS ORDER DATED 31
MARCH 1997 GRANTING RESPONDENTS MOTION
FOR RECONSIDERATION WHICH IS FATALLY
DEFECTIVE FOR LACK OF NOTICE OF HEARING.
B.
THE COURT OF APPEALS GRAVELY ERRED IN
AFFIRMING THE TRIAL COURTS ORDER WHICH
GAVE FULL WEIGHT AND CREDIT TO THE
MISLEADING AND ERRONEOUS CERTIFICATION
ISSUED BY GILDA E. ESTILO WHICH SHE LATER
EXPRESSLY AND CATEGORICALLY RECANTED BY
WAY OF HER AFFIDAVIT.
C.

D.
THE COURT OF APPEALS GRAVELY ERRED IN
AFFIRMING THE TRIAL COURTS ORDER THAT MADE
NO PRONOUNCEMENTS AS TO COSTS, AND IN
DISREGARDING THE MERIT OF THE PETITIONERS
CAUSE OF ACTION.22
Our Ruling

CIVIL PROCEDURE

AGUSTIN, E. P. | 72

The petition is without merit.


Essentially, two (2) issues are raised in this petition. The first is
the procedural issue of whether or not the RTC and the CA erred
in liberally applying the rule on notice of hearing under Section
5, Rule 15 of the 1997 Rules of Civil Procedure. The second is
the substantive issue of whether or not Aneco may enjoin
Landex from constructing a concrete wall on its own property.
We shall discuss the twin issues sequentially.
Strict vs. Liberal Construction of Procedural Rules; Defective
motion was cured when Aneco was given an opportunity to
comment on the motion for reconsideration.
Section 5, Rule 15 of the 1997 Rules of Civil Procedure23 requires
a notice of hearing for a contested motion filed in court. Records
disclose that the motion for reconsideration filed by Landex of
the RTC decision did not contain a notice of hearing. There is no
dispute that the motion for reconsideration is defective. The RTC
and the CA ignored the procedural defect and ruled on the
substantive issues raised by Landex in its motion for
reconsideration. The issue before Us is whether or not the RTC
and the CA correctly exercised its discretion in ignoring the
procedural defect. Simply put, the issue is whether or not the
requirement of notice of hearing should be strictly or liberally
applied under the circumstances.
Aneco bats for strict construction. It cites a litany of cases which
held that notice of hearing is mandatory. A motion without the
required notice of hearing is a mere scrap of paper. It does not
toll the running of the period to file an appeal or a motion for
reconsideration. It is argued that the original RTC decision is
already final and executory because of the defective motion.24
Landex counters for liberal construction. It similarly cites a
catena of cases which held that procedural rules may be relaxed
in the interest of substantial justice. Landex asserts that the
procedural defect was cured when it filed a motion setting a
hearing for its motion for reconsideration. It is claimed that
Aneco was properly informed of the pending motion for
reconsideration and it was not deprived of an opportunity to be
heard.25
It is true that appeals are mere statutory privileges which should
be exercised only in the manner required by law. Procedural
rules serve a vital function in our judicial system. They promote
the orderly resolution of cases. Without procedure, there will be
chaos. It thus behooves upon a litigant to follow basic
procedural rules. Dire consequences may flow from procedural
lapses.
Nonetheless, it is also true that procedural rules are mere tools
designed to facilitate the attainment of justice. Their strict and
rigid application should be relaxed when they hinder rather than
promote substantial justice. Public policy dictates that court
cases should, as much as possible, be resolved on the merits not
on mere technicalities. Substantive justice trumps procedural
rules. In Barnes v. Padilla,26 this Court held:
Let it be emphasized that the rules of procedure should be
viewed as mere tools designed to facilitate the attainment of
justice. Their strict and rigid application, which would result in
technicalities that tend to frustrate rather than promote
substantial justice, must always be eschewed. Even the Rules of
Court reflect this principle. The power to suspend or even

CIVIL PROCEDURE

disregard rules can be so pervasive and compelling as to alter


even that which this Court itself has already declared to be final
x x x.lawph!l
The emerging trend in the rulings of this Court is to afford every
party litigant the amplest opportunity for the proper and just
determination of his cause, free from the constraints of
technicalities. Time and again, this Court has consistently held
that rules must not be applied rigidly so as not to override
substantial justice.27
Here, We find that the RTC and the CA soundly exercised their
discretion in opting for a liberal rather than a strict application of
the rules on notice of hearing. It must be stressed that there are
no vested right to technicalities. It is within the courts sound
discretion to relax procedural rules in order to fully adjudicate
the merits of a case. This Court will not interfere with the
exercise of that discretion absent grave abuse or palpable error.
Section 6, Rule 1 of the 1997 Rules of Civil Procedure even
mandates a liberal construction of the rules to promote their
objectives of securing a just, speedy, and inexpensive disposition
of every action and proceeding.
To be sure, the requirement of a notice of hearing in every
contested motion is part of due process of law. The notice alerts
the opposing party of a pending motion in court and gives him
an opportunity to oppose it. What the rule forbids is not the
mere absence of a notice of hearing in a contested motion but
the unfair surprise caused by the lack of notice. It is the dire
consequences which flow from the procedural error which is
proscribed. If the opposing party is given a sufficient opportunity
to oppose a defective motion, the procedural lapse is deemed
cured and the intent of the rule is substantially complied. In E &
L Mercantile, Inc. v. Intermediate Appellate Court, 28 this Court
held:
Procedural due process is not based solely on a mechanistic and
literal application of a rule such that any deviation is inexorably
fatal. Rules of procedure, and this includes the three (3) days
notice requirement, are liberally construed in order to promote
their object and to assist the parties in obtaining just, speedy,
and inexpensive determination of every action and proceeding
(Section 2, Rule 1, Rules of Court). In Case and Nantz v. Jugo
(77 Phil. 517), this Court made it clear that lapses in the literal
observance of a rule of procedure may be overlooked when they
have not prejudiced the adverse party and have not deprived the
court of its authority.
A party cannot ignore a more than sufficient opportunity to
exercise its right to be heard and once the court performs its
duty and the outcome happens to be against that negligent
party, suddenly interpose a procedural violation already cured,
insisting that everybody should again go back to square one.
Dilatory tactics cannot be the guiding principle.
The rule in De Borja v. Tan (93 Phil. 167), that "what the law
prohibits is not the absence of previous notice, but the absolute
absence thereof and lack of opportunity to be heard," is the
applicable doctrine. (See also Aguilar v. Tan, 31 SCRA 205;
Omico v. Vallejos, 63 SCRA 285; Sumadchat v. Court of Appeals,
111 SCRA 488.) x x x29
We also find that the procedural lapse committed by Landex was
sufficiently cured when it filed another motion setting a hearing
for its defective motion for reconsideration. Records reveal that
the RTC set a hearing for the motion for reconsideration but
Anecos counsel failed to appear. The RTC then gave Aneco

AGUSTIN, E. P. | 73

additional time to
reconsideration.30

file

comment

on

the

motion

for

Aneco was afforded procedural due process when it was given


an opportunity to oppose the motion for reconsideration. It
cannot argue unfair surprise because it was afforded ample time
to file a comment, as it did comment, on the motion for
reconsideration. There being no substantial injury or unfair
prejudice, the RTC and the CA correctly ignored the procedural
defect.
The RTC and the CA did not err in dismissing the complaint for
injunction; factual findings and conclusions of law of the RTC
and the CA are afforded great weight and respect.
Anent the substantive issue, We agree with the RTC and the CA
that the complaint for injunction against Landex should be
dismissed for lack of merit. What is involved here is an undue
interference on the property rights of a landowner to build a
concrete wall on his own property. It is a simple case of a
neighbor, petitioner Aneco, seeking to restrain a landowner,
respondent Landex, from fencing his own land.
Article 430 of the Civil Code gives every owner the right to
enclose or fence his land or tenement by means of walls,
ditches, hedges or any other means. The right to fence flows
from the right of ownership. As owner of the land, Landex may
fence his property subject only to the limitations and restrictions
provided by law. Absent a clear legal and enforceable right, as
here, We will not interfere with the exercise of an essential
attribute of ownership.
Well-settled is the rule that factual findings and conclusions of
law of the trial court when affirmed by the CA are accorded
great weight and respect. Here, We find no cogent reason to
deviate from the factual findings and conclusion of law of the
trial court and the appellate court. We have meticulously
reviewed the records and agree that Aneco failed to prove any
clear legal right to prevent, much less restrain, Landex from
fencing its own property.
Aneco cannot rely on the road lot under the old subdivision
project of FHDI because it knew at the time of the sale that it
was buying ordinary lots, not subdivision lots, from FHDI. This is
clear from the deed of sale between FHDI and Aneco where
FHDI manifested that it was no longer interested in pursuing its
own subdivision project. If Aneco wants to transform its own lots
into a subdivision project, it must make its own provision for
road lots. It certainly cannot piggy back on the road lot of the
defunct subdivision project of FHDI to the detriment of the new
owner Landex. The RTC and the CA correctly dismissed the
complaint for injunction of Aneco for lack of merit.
WHEREFORE, the petition is DENIED and the appealed Decision
AFFIRMED.
SO ORDERED.
RUBEN
Associate Justice

CIVIL PROCEDURE

T.

REYES

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