RULE 1 - 5

Alday vs. FGU Insurance Corporation, 350 SCRA 113 , January 23, 2001
1. Before going into the substantive issues, the Court shall first dispose of some
procedural matters raised by the parties. Petitioner claims that respondent is
estopped from questioning her non-payment of docket fees because it did not
raise this particular issue when it filed its first motion - the Motion to Strike out
Answer With Compulsory Counterclaim And To Declare Defendant In Default with
the trial court; rather, it was only nine months after receiving petitioners answer
that respondent assailed the trial courts lack of jurisdiction over petitioners
counterclaims based on the latters failure to pay docket fees. Petitioners position
is unmeritorious. Estoppel by laches arises from the negligence or omission to
assert a right within a reasonable time, warranting a presumption that the party
entitled to assert it either has abandoned or declined to assert it. In the case at
bar, respondent cannot be considered as estopped from assailing the trial courts
jurisdiction over petitioners counterclaim since this issue was raised by
respondent with the trial court itself the body where the action is pending - even
before the presentation of any evidence by the parties and definitely, way before
any judgment could be rendered by the trial court.
2. Meanwhile, respondent questions the jurisdiction of the Court of Appeals over
the appeal filed by petitioner from the 18 September 1990 and 28 February 1991
orders of the trial court. It is significant to note that this objection to the
appellate courts jurisdiction is raised for the first time before this Court;
respondent never having raised this issue before the appellate court. Although
the lack of jurisdiction of a court may be raised at any stage of the action, a
party may be estopped from raising such questions if he has actively taken part
in the very proceedings which he questions, belatedly objecting to the courts
jurisdiction in the event that that the judgment or order subsequently rendered
is adverse to him. In this case, respondent actively took part in the proceedings
before the Court of Appeals by filing its appellees brief with the same. Its
participation, when taken together with its failure to object to the appellate
courts jurisdiction during the entire duration of the proceedings before such
court, demonstrates a willingness to abide by the resolution of the case by such
tribunal and accordingly, respondent is now most decidedly estopped from
objecting to the Court of Appeals assumption of jurisdiction over petitioners
appeal.
3. There is no need for petitioner to pay docket fees for her compulsory
counterclaim. On the other hand, in order for the trial court to acquire
jurisdiction over her permissive counterclaim, petitioner is bound to pay the
prescribed docket fees. The rule on the payment of filing fees has been laid
down by the Court in the case of Sun Insurance Office, Ltd. v. Hon. Maximiano
Asuncion.
a. 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.

b. 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 allow payment of said fee
within a reasonable time but also in no case beyond its applicable
prescriptive or reglementary period.
c. 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.
Korea Technologies Co., Ltd. vs. Lerma, 542 SCRA 1 , January 07, 2008
1. Under Sec. 24, the RTC does not have jurisdiction over disputes that are properly
the subject of arbitration pursuant to an arbitration clause, and mandates the
referral to arbitration in such cases, thus:
SEC. 24. Referral to Arbitration. A court before which an action is brought in a
matter which is the subject matter of an arbitration agreement shall, if at least
one party so requests not later than the pre-trial conference, or upon the request
of both parties thereafter, refer the parties to arbitration unless it finds that the
arbitration agreement is null and void, inoperative or incapable of being
performed.
2. While the RTC does not have jurisdiction over disputes governed by arbitration
mutually agreed upon by the parties, still the foreign arbitral award is subject to
judicial review by the RTC which can set aside, reject, or vacate it. In this sense,
what this Court held in Chung Fu Industries (Phils.), Inc. relied upon by KOGIES is
applicable insofar as the foreign arbitral awards, while final and binding, do not
oust courts of jurisdiction since these arbitral awards are not absolute and
without exceptions as they are still judicially reviewable. Chapter 7 of RA 9285
has made it clear that all arbitral awards, whether domestic or foreign, are
subject to judicial review on specific grounds provided for.
Mercado vs. Court of Appeals, 569 SCRA 503 , October 17, 2008
1. When Mercado sought to annul the continuing hold-out agreement and deed of
assignment (which he executed as security for his credit purchases), he in effect
sought to be freed from them. While he admitted having outstanding obligations,
he nevertheless asserted that those were not covered by the assailed accessory
contracts. For its part, aside from invoking the validity of the said agreements,
SMC therefore sought to collect the payment for the value of goods Mercado
purchased on credit. Thus, Mercados complaint and SMCs counterclaim both
touched the issues of whether the continuing hold-out agreement and deed of
assignment were valid and whether Mercado had outstanding liabilities to SMC.
The same evidence would essentially support or refute Mercados claim and
SMCs counterclaim.
Based on the foregoing, had these issues been tried separately, the efforts of the
RTC and the parties would have had to be duplicated. Clearly, SMCs

counterclaim, being logically related to Mercados claim, was compulsory in

nature. Consequently, the payment of docket fees was not necessary for the RTC
to acquire jurisdiction over the subject matter.
Proton Pilipinas Corporation vs. Banque Nationale de Paris, 460 SCRA
260 , June 15, 2005
1. Actions; Pleadings and Practice; Jurisdictions; Docket Fees; 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.a. 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;
b. 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;
c. 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.
Ruby Shelter Builders and Realty Development Corporation vs. Formaran
III, , February 10, 2009
1. In Manchester Development Corporation v. Court of Appeals, the Court explicitly
pronounced that [t]he court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee. Hence, the payment of docket fees is not
only mandatory, but also jurisdictional.
2. The docket fees under Section 7(a), Rule 141, in cases involving real property
depend on the fair market value of the same: the higher the value of the real
property, the higher the docket fees due. In contrast, Section 7(b)(1), Rule 141
imposes a fixed or flat rate of docket fees on actions incapable of pecuniary
estimation.
3. No matter how fastidiously petitioner attempts to conceal them, the allegations
and reliefs it sought in its Complaint in Civil Case No. 2006-0030 appears to be
ultimately a real action, involving as they do the recovery by petitioner of its title
to and possession of the five parcels of land from respondents Tan and Obiedo.

A real action is one in which the plaintiff seeks the recovery of real property; or,
as indicated in what is now Section 1, Rule 4 of the Rules of Court, a real action
is an action affecting title to or recovery of possession of real property.
4. A real action indisputably involves real property. The docket fees for a real action
would still be determined in accordance with the value of the real property
involved therein; the only difference is in what constitutes the acceptable value.
In computing the docket fees for cases involving real properties, the courts,
instead of relying on the assessed or estimated value, would now be using the
fair market value of the real properties (as stated in the Tax Declaration or the
Zonal Valuation of the Bureau of Internal Revenue, whichever is higher) or, in the
absence thereof, the stated value of the same.
Saint Louis University, Inc. vs. Cobbarubias, 626 SCRA 649 , August 03,
2010
1. Appeals; Docket Fees; Pleadings and Practice; Appeal is not a natural right but a
mere statutory privilege, thus, appeal must be made strictly in accordance with the
provision set by law; Payment in full of docket fees within the prescribed period is
not only mandatory, but also jurisdictional.Appeal is not a natural right but a mere statutory privilege, thus, appeal must be
made strictly in accordance with the provision set by law. Rule 43 of the Rules of
Court provides that appeals from the judgment of the VA shall be taken to the CA,
by filing a petition for review within fifteen (15) days from the receipt of the notice
of judgment. Furthermore, upon the filing of the petition, the petitioner shall pay to
the CA clerk of court the docketing and other lawful fees; non-compliance with the
procedural requirements shall be a sufficient ground for the petitions dismissal.
Thus, payment in full of docket fees within the prescribed period is not only
mandatory, but also jurisdictional. It is an essential requirement, without which, the
decision appealed from would become final and executory as if no appeal has been
filed.
Relucio vs. Lopez, 373 SCRA 578 , January 16, 2002
1. Remedial Law; Actions; A cause of action is an act or omission of one party the
defendant in violation of the legal right of the other; Elements of.A cause of action is an act or omission of one party the defendant in violation of
the legal right of the other. The elements of a cause of action are: (1) a right in
favor of the plaintiff by whatever means and under whatever law it arises or is
created; (2) an obligation on the part of the named defendant to respect or not
to violate such right; and (3) an act or omission on the part of such defendant in
violation of the right of the plaintiff or constituting a breach of the obligation of
the defendant to the plaintiff for which the latter may maintain an action for
recovery of damages.
2. Remedial Law; Actions; To sustain a motion to dismiss for lack of cause of action,
the complaint must show that the claim for relief does not exist, rather than that
a claim has been merely defectively stated or is ambiguous, indefinite or
uncertain.-

A cause of action is sufficient if a valid judgment may be rendered thereon if the

alleged facts were admitted or proved. In order to sustain a motion to dismiss for
lack of cause of action, the complaint must show that the claim for relief does
not exist, rather than that a claim has been merely defectively stated or is
ambiguous, indefinite or uncertain.
De Castro vs. Court of Appeals, 384 SCRA 607 , July 18, 2002
1. Civil Law; Actions; Parties; The joinder of indispensable parties is mandatory and
courts cannot proceed without their presence.An indispensable party is one whose interest will be affected by the courts
action in the litigation, and without whom no final determination of the case can
be had. The joinder of indispensable parties is mandatory and courts cannot
proceed without their presence. Whenever it appears to the court in the course
of a proceeding that an indispensable party has not been joined, it is the duty of
the court to stop the trial and order the inclusion of such party.
2. Civil Law; Actions; Parties; Solidarity does not make a solidary obligor an
indispensable party in a suit filed by the creditor.Thus, the Court has ruled in Operators Incorporated vs. American Biscuit Co., Inc.
thatx x x solidarity does not make a solidary obligor an indispensable party in
a suit filed by the creditor. Article 1216 of the Civil Code says that the creditor
may proceed against anyone of the solidary debtors or some or all of them
simultaneously.
3. Civil Law; Actions; Parties; When the law expressly provides for solidarity of the
obligation, as in the liability of co-principals in a contract of agency, each obligor
may be compelled to pay the entire obligation.When the law expressly provides for solidarity of the obligation, as in the liability
of coprincipals in a contract of agency, each obligor may be compelled to pay
the entire obligation. The agent may recover the whole compensation from any
one of the co-principals, as in this case.
Lotte Phil. Co., Inc. vs. Dela Cruz, 464 SCRA 591 , July 28, 2005
1. Remedial Law; Parties; Pleadings and Practice; An indispensable party is a party
in interest without whom no final determination can be had of an action, and
who shall be joined either as plaintiffs or defendants; The joinder of
indispensable parties is mandatory; The absence of an indispensable party
renders all subsequent actions of the court null and void for want of authority to
act, not only as to the absent parties but even as to those present.An indispensable party is a party in interest without whom no final determination
can be had of an action, and who shall be joined either as plaintiffs or

defendants. The joinder of indispensable parties is mandatory. The presence of

indispensable parties is necessary to vest the court with jurisdiction, which is
the authority to hear and determine a cause, the right to act in a case. Thus,
without the presence of indispensable parties to a suit or proceeding, judgment
of a court cannot attain real finality. The absence of an indispensable party
renders all subsequent actions of the court null and void for want of authority to
act, not only as to the absent parties but even as to those present.
2. Remedial Law; Parties; Pleadings and Practice; The non-joinder of indispensable
parties is not a ground for the dismissal of an action and the remedy is to
implead the non-party claimed to be indispensable.In Domingo v. Scheer, we held that the non-joinder of indispensable parties is
not a ground for the dismissal of an action and the remedy is to implead the nonparty claimed to be indispensable. Parties may be added by order of the court on
motion of the party or on its own initiative at any stage of the action and/or such
times as are just. If the petitioner refuses to implead an indispensable party
despite the order of the court, the latter may dismiss the complaint/petition for
the petitioner/plaintiffs failure to comply therefor.
De la Cruz vs. Joaquin, 464 SCRA 576 , July 28, 2005
1. Remedial Law; Parties; Substitution of Party; When a party to a pending action
dies and the claim is not extinguished, the Rules of Court require a substitution
of the deceased.When a party to a pending action dies and the claim is not extinguished, the
Rules of Court require a substitution of the deceased. The procedure is
specifically governed by Section 16 of Rule 3.
2. Remedial Law; Parties; Substitution of Party; The rule on the substitution of
parties was crafted to protect every partys right to due process.The rule on the substitution of parties was crafted to protect every partys right
to due process. The estate of the deceased party will continue to be properly
represented in the suit through the duly appointed legal representative.
Moreover, no adjudication can be made against the successor of the deceased if
the fundamental right to a day in court is denied.
3. Remedial Law; Parties; Substitution of Party; Court has nullified not only trial
proceedings conducted without the appearance of the legal representatives of
the deceased, but also the resulting judgments.The Court has nullified not only trial proceedings conducted without the
appearance of the legal representatives of the deceased, but also the resulting
judgments. In those instances, the courts acquired no jurisdiction over the
persons of the legal representatives or the heirs upon whom no judgment was
binding.

4. Remedial Law; Parties; Substitution of Party; Formal substitution by heirs is not

necessary when they themselves voluntarily appear, participate in the case, and
present evidence in defense of the deceased.This general rule notwithstanding, a formal substitution by heirs is not necessary
when they themselves voluntarily appear, participate in the case, and present
evidence in defense of the deceased. These actions negate any claim that the
right to due process was violated.
5. Remedial Law; Parties; Substitution of Party; Strictly speaking, the rule on the
substitution by heirs is not a matter of jurisdiction, but a requirement of due
process; Mere failure to substitute for a deceased plaintiff is not a sufficient
ground to nullify a trial courts decision; Alleging party must prove that there was
an undeniable violation of due process.Strictly speaking, the rule on the substitution by heirs is not a matter of
jurisdiction, but a requirement of due process. Thus, when due process is not
violated, as when the right of the representative or heir is recognized and
protected, noncompliance or belated formal compliance with the Rules cannot
affect the validity of a promulgated decision. Mere failure to substitute for a
deceased plaintiff is not a sufficient ground to nullify a trial courts decision. The
alleging party must prove that there was an undeniable violation of due process.
Pacific Consultants International Asia, Inc. vs. Schonfeld, 516 SCRA 209 ,
February 19, 2007
1. Remedial Law; Appeals; Under Section 9 of Batas Pambansa Blg. 129, as
amended by R.A. No. 7902, the Court of Appeals is empowered to pass upon the
evidence, if and when necessary, to resolve factual issues.It must be stressed that in resolving a petition for certiorari, the CA is not
proscribed from reviewing the evidence on record. Under Section 9 of Batas
Pambansa Blg. 129, as amended by R.A. No. 7902, the CA is empowered to pass
upon the evidence, if and when necessary, to resolve factual issues. If it appears
that the Labor Arbiter and the NLRC misappreciated the evidence to such an
extent as to compel a contrary conclusion if such evidence had been properly
appreciated, the factual findings of such tribunals cannot be given great respect
and finality.
2. Venue; Venue stipulations in a contract do not, as a rule, supersede the general
rule set forth in Rule 4 of the Revised Rules of Court in the absence of qualifying
or restrictive words.The settled rule on stipulations regarding venue, as held by this Court in the
vintage case of Philippine Banking Corporation v. Tensuan, 230 SCRA 413 (1994),
is that while they are considered valid and enforceable, venue stipulations in a
contract do not, as a rule, supersede the general rule set forth in Rule 4 of the
Revised Rules of Court in the absence of qualifying or restrictive words. They
should be considered merely as an agreement or additional forum, not as
limiting venue to the specified place. They are not exclusive but, rather

permissive. If the intention of the parties were to restrict venue, there must be
accompanying language clearly and categorically expressing their purpose and
design that actions between them be litigated only at the place named by them.
Navarro vs Escobido, 606 SCRA 1, GR no. 153788
1. The 1997 Rules of Civil Procedure requires that every action must be prosecuted
or defended in the name of the real party-in-interest, i.e., the party who stands
to be benefited or injured by the judgment in the suit, or the party entitled to the
avails of the suit.
In sum, in suits to recover properties, all co-owners are real parties in interest.
However, pursuant to Article 487 of the Civil Code and relevant jurisprudence,
any one of them may bring an action, any kind of action, for the recovery of coowned properties. Therefore, only one of the co-owners, namely the co-owner
who filed the suit for the recovery of the co-owned property, is an indispensable
party thereto. The other co-owners are not indispensable parties. They are not
even necessary parties, for a complete relief can be accorded in the suit even
without their participation, since the suit is presumed to have been filed for the
benefit of all co-owners.
CHINA Banking vs. Oliver