FIRST DIVISION

[G.R. No. 126603. June 29, 1998]

ESTRELLITA J. TAMANO, petitioner, vs. HON.
RODOLFO A. ORTIZ, Presiding Judge,
RTC-Br. 89, Quezon City, HAJA PUTRI
ZORAYDA A. TAMANO, ADIB A.
TAMANO and the HON. COURT OF
APPEALS, respondents.
DECISION
BELLOSILLO, J.:

This Petition for Review on Certiorari seeks to

reverse and set aside the decision of the Court of
Appeals of 30 September 1996 in CA-G.R. SP. No.
39656 which affirmed the decision of the Regional Trial
Court-Br. 89, Quezon City, denying the motion to dismiss
as well as the motion for reconsideration filed by
petitioner Estrellita J. Tamano.
On 31 May 1958 Senator Mamintal Abdul Jabar
Tamano (Tamano) married private respondent Haja Putri
Zorayda A. Tamano (Zorayda) in civil rites. Their marriage
supposedly remained valid and subsisting until his death
on 18 May 1994. Prior to his death, particularly on 2 June

1993, Tamano also married petitioner Estrellita J. Tamano

(Estrellita) in civil rites in Malabang, Lanao del Sur.
On 23 November 1994 private respondent Zorayda
joined by her son Adib A. Tamano (Adib) filed
a Complaint for Declaration of Nullity of Marriage of
Tamano and Estrellita on the ground that it was
bigamous. They contended that Tamano and Estrellita
misrepresented
themselves
as divorced and single,
respectively, thus making the entries in the marriage
contractfalse and fraudulent.
Private respondents alleged that Tamano never
divorced Zorayda and that Estrellita was not single when
she married Tamano as the decision annulling her
previous marriage with Romeo C. Llave never became
final and executory for non-compliance with publication
requirements.
Estrellita filed a motion to dismiss alleging that the
Regional Trial Court of Quezon City was without
jurisdiction over the subject and nature of the action. She
alleged that "only a party to the marriage" could file an
action for annulment of marriage against the other
spouse,[1] hence, it was only Tamano who could file an
action for annulment of their marriage. Petitioner likewise
contended that since Tamano and Zorayda were both
Muslims and married in Muslim rites the jurisdiction to
hear and try the instant case was vested in

the sharia courts pursuant to Art. 155 of the Code of

Muslim Personal Laws.
The lower court denied the motion to dismiss and
ruled that the instant case was properly cognizable by the
Regional Trial Court of Quezon City since Estrellita and
Tamano were married in accordance with the Civil Code
and not exclusively in accordance with PD No. 1083 [2] or
the Code of Muslim Personal laws. The motion for
reconsideration was likewise denied; hence, petitioner
filed the instant petition with this Court seeking to set
aside the 18 July 1995 order of respondent presiding
judge of the RTC-Br. 89, Quezon City, denying petitioners
motion to dismiss and the 22 August 1995 order denying
reconsideration thereof.
In a Resolution dated 13 December 1995 we referred
the case to the Court of Appeals for consolidation with
G.R. No. 118371. Zorayda and Adib A. Tamano however
filed a motion, which the Court of Appeals granted, to
resolve the Complaint for Declaration of Nullity of
Marriage ahead of the other consolidated cases.
The Court of Appeals ruled that the instant case
would fall under the exclusive jurisdiction of sharia courts
only
when
filed
in
places
where
there
are sharia courts. But in places where there are
no sharia courts, like Quezon City, the instant case could
properly be filed before the Regional Trial Court.

Petitioner is now before us reiterating her earlier

argument that it is the sharia court and not the Regional
Trial Court which has jurisdiction over the subject and
nature of the action.
Under The Judiciary Reorganization Act of 1980,
Regional Trial Courts have jurisdiction over all actions
involving the contract of marriage and marital relations.
[4]
Personal actions, such as the instant complaint for
declaration of nullity of marriage, may be commenced
and
tried
where
the plaintiff or
any
of
the
principal plaintiffs resides, or where the defendant or any
of the principal defendants resides, at the election of
the plaintiff.[5] There should be no question by now that
what determines the nature of an action and
correspondingly the court which has jurisdiction over it
are the allegations made by the plaintiff in this case.[6] In
the complaint for declaration of nullity of marriage filed by
private respondents herein, it was alleged that Estrellita
and Tamano were married in accordance with the
provisions of the Civil Code. Never was it mentioned that
Estrellita and Tamano were married under Muslim laws or
PD No. 1083. Interestingly, Estrellita never stated in
her Motion to Dismiss that she and Tamano were married
under Muslim laws. That she was in fact married to
Tamano under Muslim laws was first mentioned only in
her Motion for Reconsideration.
[3]

Nevertheless, the Regional Trial Court was not

divested of jurisdiction to hear and try the instant case
despite
the
allegation
in
the Motion
for
Reconsideration that Estrellita and Tamano were likewise
married in Muslim rites. This is because a courts
jurisdiction cannot be made to depend upon defenses set
up in the answer, in a motion to dismiss, or in a motion
for reconsideration, but only upon the allegations of the
complaint.[7] Jurisdiction over the subject matter of a case
is determined from the allegations of the complaint as the
latter comprises a concise statement of the ultimate facts
constituting the plaintiffs causes of action.[8]
Petitioner argues that the sharia courts have
jurisdiction over the instant suit pursuant to Art. 13, Title
II, PD No. 1083,[9] which provides -

Art. 13. Application. - (1) The provisions of

this Title shall apply to marriage and divorce
wherein both parties are Muslims, or
wherein only the male party is a Muslim and
the marriage is solemnized in accordance
with Muslim law or this Code in any part of
the Philippines.
(2) In case of a marriage between a Muslim
and a non-Muslim, solemnized not in

accordance with Muslim law or this Code,

the Civil Code of the Philippines shall apply.
(3) Subject to the provisions of the
preceding paragraphs, the essential
requisites and legal impediments to
marriage, divorce, paternity and filiation,
guardianship and custody of minors, support
and maintenance, claims for customary
dower (mahr), betrothal, breach of contract
to marry, solemnization and registration of
marriage and divorce, rights and obligations
between husband and wife, parental
authority, and the property relations between
husband and wife shall be governed by this
Code and other applicable Muslim laws.
As alleged in the complaint, petitioner and Tamano
were married in accordance with the Civil Code. Hence,
contrary to the position of petitioner, the Civil Code is
applicable in the instant case. Assuming that indeed
petitioner and Tamano were likewise married under
Muslim laws, the same would still fall under the general
original jurisdiction of the Regional Trial Courts.
Article 13 of PD No. 1083 does not provide for a
situation where the parties were married both in civil and
Muslim rites. Consequently, the sharia courts are not

vested with original andexclusive jurisdiction when it

comes to marriages celebrated under both civil and
Muslim laws. Consequently, the Regional Trial Courts are
not divested of their general original jurisdiction under
Sec. 19, par. (6) of BP Blg. 129 which provides -

Sec. 19. Jurisdiction in Civil Cases.

- Regional Trial Courts shall exercise
exclusive original jurisdiction: x x x (6) In all
cases not within the exclusive jurisdiction of
any court, tribunal, person or body
exercising judicial or quasi-judicial functions
xxxx
WHEREFORE, the instant petition is DENIED. The
decision of the Court of Appeals sustaining the 18 July
1995 and 22 August 1995 orders of the Regional Trial
Court - Br. 89, Quezon City, denying the motion to
dismiss and reconsideration thereof, is AFFIRMED. Let
the records of this case be immediately remanded to the
court of origin for further proceedings until terminated.
SO ORDERED.
Davide,
Jr., (Chairman),
Panganiban, and Quisumbing, JJ., concur.

SECOND DIVISION

Vitug,

[G.R. No. 158407. January 17, 2005]

FILOMENA DOMAGAS, petitioner, vs. VIVIAN

LAYNO JENSEN, respondent.
DECISION
CALLEJO, SR., J.:

This is a petition for review on certiorari, under

Rule 45 of the Rules of Court, of the Decision [1] of
the Court of Appeals (CA) in CA-G.R. CV No.
73995, which affirmed the Decision[2] of the
Regional Trial Court (RTC) of Dagupan City,
Branch 44, in Civil Case No. 2000-0244-D, which
declared null and void the decision of the Municipal
Trial Court (MTC) of Calasiao, Pangasinan in Civil
Case No. 879.[3]
The antecedent facts follow.
On February 19, 1999, petitioner Filomena
Domagas filed a complaint for forcible entry
against respondent Vivian Jensen before the MTC
of Calasiao, Pangasinan. The petitioner alleged in
her complaint that she was the registered owner of
a parcel of land covered by Original Certificate of

Title (OCT) No. P-30980, situated in Barangay

Buenlag, Calasiao, Pangasinan, and with an area
of 827 square meters. On January 9, 1999 the
respondent, by means of force, strategy and
stealth, gained entry into the petitioners property
by excavating a portion thereof and thereafter
constructing a fence thereon. As such, the
petitioner was deprived of a 68-square meter
portion of her property along the boundary line.
The petitioner prayed that, after due proceedings,
judgment be rendered in her favor, thus:
3. And, after trial, judgment be rendered:
a) DECLARING the writ of Preliminary
Mandatory Injunction and Writ of
Preliminary Injunction permanent;
b) ORDERING defendant, his
representatives, agents and persons
acting under her, to vacate the portion of
the property of the plaintiff occupied by
them and to desist from entering,
excavating and constructing in the said
property of the plaintiff described in
paragraph 2 hereof and/or from
disturbing the peaceful ownership and

possession of the plaintiff over the said

land, pending the final resolution of the
instant action;
c) ORDERING defendant to pay reasonable
rental at FIVE THOUSAND
(P5,000.00) PESOS per month from
January 9, 1999 up to the time she
finally vacates and removes all
constructions made by her in the
property of the plaintiff and up to the
time she finally restores the said
property in the condition before her
illegal entry, excavation and
construction in the property of the
plaintiff;
d) ORDERING defendant to pay actual
damages in the amount of TWENTY
THOUSAND (P20,000.00) PESOS;
moral damages in the amount of
TWENTY THOUSAND (P20,000.00)
PESOS; attorneys fees of THIRTY
THOUSAND (P30,000.00) PESOS in
retainers fee and ONE THOUSAND
FIVE HUNDRED (P1,500.00) PESOS

per court appearance fee; exemplary

damages in the amount of TWENTY
THOUSAND (P20,000.00) PESOS,
and, costs.

1) Ordering the defendant, her representatives,

agents and persons acting under her, to
vacate the 68-square meters which she
encroached upon;

Plaintiff further prays for other reliefs and remedies just

and equitable in the premises.[4]

2) Ordering the defendant to pay a monthly

rental of P1,000.00 to the plaintiff;

The case was docketed as Civil Case No. 879.

The summons and the complaint were not served
on the respondent because the latter was
apparently out of the country. This was relayed to
the Sheriff by her (the respondents) brother, Oscar
Layno, who was then in the respondents house at
No. 572 Barangay Buenlag, Calasiao, Pangasinan.
The Sheriff left the summons and complaint with
Oscar Layno, who received the same.[5]

3) To pay plaintiff actual damages

of P20,000.00; attorneys fees
of P15,000.00 and exemplary damages
in the amount of P20,000.00 plus the
costs.

Nonetheless, on May 17, 1999, the court

rendered judgment ordering the respondent and all
persons occupying the property for and in the
latters behalf to vacate the disputed area and to
pay monthly rentals therefor, including actual
damages, attorneys fees, and exemplary
damages. The fallo of the decision reads:

SO ORDERED.[6]
The respondent failed to appeal the decision.
Consequently, a writ of execution was issued on
September 27, 1999.
On August 16, 2000, the respondent filed a
complaint against the petitioner before the RTC of
Dagupan City for the annulment of the decision of
the MTC in Civil Case No. 879, on the ground that
due to the Sheriffs failure to serve the complaint
and summons on her because she was in Oslo,
Norway, the MTC never acquired jurisdiction over

her person. The respondent alleged therein that

the service of the complaint and summons through
substituted service on her brother, Oscar Layno,
was improper because of the following: (a) when
the complaint in Civil Case No. 879 was filed, she
was not a resident of Barangay Buenlag, Calasiao,
Pangasinan, but of Oslo, Norway, and although
she owned the house where Oscar Layno received
the summons and the complaint, she had then
leased it to Eduardo Gonzales; (b) she was in
Oslo, Norway, at the time the summons and the
complaint were served; (c) her brother, Oscar
Layno, was merely visiting her house in Barangay
Buenlag and was not a resident nor an occupant
thereof when he received the complaint and
summons; and (d) Oscar Layno was never
authorized to receive the summons and the
complaint for and in her behalf.[7]
The respondent further alleged that the MTC
had no jurisdiction over the subject matter of the
complaint in Civil Case No. 879 because the
petitioner, the plaintiff therein, failed to show prior
possession of the property. She further claimed
that the alleged forcible entry was simply based on
the result of the survey conducted by Geodetic

Engineer Leonardo de Vera showing that the

property of the respondent encroached on that of
the petitioner.
The respondent filed a Manifestation dated
August 31, 2000, and appended thereto the
following: (a) a copy[8] of her passport showing that
she left the country on February 17, 1999; (b) a
copy[9] of the Contract of Lease dated November
24, 1997, executed by her and Eduardo D.
Gonzales over her house for a period of three (3)
years or until November 24, 2000; (c) her
affidavit[10] stating, inter alia, that she owned the
house
at
Barangay
Buenlag,
Calasiao,
Pangasinan, which she leased to Eduardo
Gonzales; that she was married to Jarl Jensen, a
citizen of Norway, on August 23, 1987 and had
resided in Norway with her husband since 1993;
that she arrived in the Philippines on December
31, 1998, but left on February 17, 1999; she
returned to the Philippines on July 30, 2000 and
learned, only then, of the complaint against her
and the decision of the MTC in Civil Case No. 879;
her brother Oscar Layno was not a resident of the
house at Barangay Buenlag; and that she never
received the complaint and summons in said case;

(d) the affidavit[11] of Oscar Layno declaring that

sometime in April 1999, he was in the respondents
house to collect rentals from Eduardo Gonzales;
that the Sheriff arrived and served him with a copy
of the summons and the complaint in Civil Case
No. 879; and that he never informed the
respondent of his receipt of the said summons and
complaint; (e) an affidavit[12] of Eduardo Gonzales
stating that he leased the house of the respondent
and resided thereat; the respondent was not a
resident of the said house although he (Gonzales)
allowed the respondent to occupy a room therein
whenever she returned to the Philippines as
a balikbayan; and that Oscar Layno was not
residing therein but only collected the rentals.
In her answer to the complaint, the petitioner
alleged that the respondent was a resident of
Barangay Buenlag, Calasiao, Pangasinan and was
the owner of the subject premises where Oscar
Layno was when the Sheriff served the summons
and complaint; that the service of the complaint
and summons by substituted service on the
respondent, the defendant in Civil Case No. 879,
was proper since her brother Oscar Layno, a
resident and registered voter of Barangay.

Buenlag, Calasiao, Pangasinan, received the

complaint and summons for and in her behalf.
The petitioner appended the following to her
answer: (a) a copy[13] of the Deed of Absolute Sale
executed by Jose Layno in her favor, dated August
26, 1992, showing that the respondent was a
resident of Barangay Buenlag, Calasiao,
Pangasinan;
(b)
a
Real
Estate
Mortgage[14] executed by the respondent, dated
February 9, 1999 showing that she was a resident
of Barangay Buenlag, Calasiao, Pangasinan; (c)
the Joint Affidavit[15] of Vicenta Peralta and Orlando
Macalanda, both residents of Barangay Buenlag,
Calasiao, Pangasinan, declaring that the
respondent and her brother Oscar Layno were
their neighbors; that the respondent and her
brother had been residents of Barangay Buenlag
since their childhood; that although the respondent
left the country on several occasions, she returned
to the Philippines and resided in her house at No.
572 located in the said barangay; and (d) the
Voters Registration Record[16] of Oscar Layno,
approved on June 15, 1997.

After due proceedings, the trial court rendered

a decision in favor of the respondent. The
dispositive portion reads:
WHEREFORE, judgment is rendered in favor of
plaintiff Vivian Layno Jensen and against defendant
Filomena Domagas, as follows:
1. The Decision of the Municipal Trial Court of
Calasiao, Pangasinan in Civil Case No. 879,
entitled Filomena Domagas versus Vivian
Layno Jensen is declared null and void, for lack
of jurisdiction over the person of the plaintiff
and the subject matter.
2. Defendant Filomena Domagas is ordered to pay
plaintiff, the following:
a.) Actual damages, representing
litigation expenses in the amount
of P50,000.00;
b.) Attorneys fees in the amount
of P50,000.00;
c.) Moral Damages in the amount
of P50,000.00;

d.) Exemplary Damages in the amount

of P50,000.00; and
e.) Costs of suit.
SO ORDERED.[17]
The trial court declared that there was no valid
service of the complaint and summons on the
respondent, the defendant in Civil Case No. 879,
considering that she left the Philippines on
February 17, 1999 for Oslo, Norway, and her
brother Oscar Layno was never authorized to
receive the said complaint and summons for and in
her behalf.
The petitioner appealed the decision to the CA
which, on May 6, 2003, rendered judgment
affirming the appealed decision with modifications.
The CA ruled that the complaint in Civil Case No.
879 was one for ejectment, which is an
action quasi in rem. The appellate court ruled that
since the defendant therein was temporarily out of
the country, the summons and the complaint
should have been served via extraterritorial service
under Section 15 in relation to Section 16, Rule 14
of the Rules of Court, which likewise requires prior

leave of court. Considering that there was no prior

leave of court and none of the modes of service
prescribed by the Rules of Court was followed by
the petitioner, the CA concluded that there was
really no valid service of summons and complaint
upon the respondent, the defendant in Civil Case
No. 879.
Hence, the present petition.
The petitioner assails the decision of the CA,
alleging that the appellate court erred in holding
that the respondents complaint for ejectment is an
action quasi in rem. The petitioner insists that the
complaint for forcible entry is an action
in personam; therefore, substituted service of the
summons and complaint on the respondent, in
accordance with Section 7, Rule 14 of the Rules of
Court, is valid. The petitioner, likewise, asserts that
Oscar Layno is a resident and a registered voter of
Barangay Buenlag, Calasiao, Pangasinan; hence,
the service of the complaint and summons on the
respondent through him is valid.
The respondent, on the other hand, asserts
that the action for forcible entry filed against her

was an action quasi in rem, and that the applicable

provision of the Rules of Court is Section 15 of
Rule 14, which calls for extraterritorial service of
summons.
The sole issue is whether or not there was a
valid service of the summons and complaint in Civil
Case No. 879 on the respondent herein who was
the defendant in the said case. The resolution of
the matter is anchored on the issue of whether or
not the action of the petitioner in the MTC against
the respondent herein is an action in personam or
quasi in rem.
The ruling of the CA that the petitioners
complaint for forcible entry of the petitioner against
the respondent in Civil Case No. 879 is an
action quasi in rem, is erroneous. The action of the
petitioner for forcible entry is a real action and
one in personam.
The settled rule is that the aim and object of an
action determine its character.[18] Whether a
proceeding is in rem, or in personam, or quasi in
rem for that matter, is determined by its nature and
purpose, and by these only.[19] A proceeding

in personam is a proceeding to enforce personal

rights and obligations brought against the person
and is based on the jurisdiction of the person,
although it may involve his right to, or the exercise
of ownership of, specific property, or seek to
compel him to control or dispose of it in
accordance with the mandate of the court. [20] The
purpose of a proceeding in personam is to impose,
through the judgment of a court, some
responsibility or liability directly upon the person of
the defendant.[21] Of this character are suits to
compel a defendant to specifically perform some
act or actions to fasten a pecuniary liability on him.
[22]
An action in personam is said to be one which
has for its object a judgment against the person, as
distinguished from a judgment against the
propriety to determine its state. It has been held
that an action in personam is a proceeding to
enforce personal rights or obligations; such action
is brought against the person. As far as suits for
injunctive relief are concerned, it is well-settled that
it is an injunctive act in personam.[23] In Combs v.
Combs,[24] the appellate court held that proceedings
to enforce personal rights and obligations and in
which personal judgments are rendered adjusting
the rights and obligations between the affected

parties is in personam. Actions for recovery of real

property are in personam.[25]
On the other hand, a proceeding quasi in
rem is one brought against persons seeking to
subject the property of such persons to the
discharge of the claims assailed.[26] In an
action quasi in rem, an individual is named as
defendant and the purpose of the proceeding is to
subject his interests therein to the obligation or
loan burdening the property.[27] Actions quasi in
rem deal with the status, ownership or liability of a
particular property but which are intended to
operate on these questions only as between the
particular parties to the proceedings and not to
ascertain or cut off the rights or interests of all
possible claimants. The judgments therein are
binding only upon the parties who joined in the
action.[28]
Section 1, Rule 70 of the Rules of Court
provides:
Section 1. Who may institute proceedings, and when. Subject to the provisions of the next succeeding section,
a person deprived of the possession of any land or
building in force, intimidation, threat, strategy, or

stealth, or a lessor, vendor, vendee, or other person

against whom the possession of any land or building is
unlawfully withheld after the expiration or termination
of the right to hold possession by virtue of any contract,
express or implied, or the legal representatives or
assigns of any such lessor, vendor, vendee, or other
person, may, at any time within one (1) year after such
unlawful deprivation or withholding of possession,
bring an action in the proper Municipal Trial Court
against the person or persons unlawfully withholding or
depriving of possession, or any person or persons
claiming under them, for the restitution of such
possession, together with damages and costs.
Under Section 15, Rule 70 of the said Rule, the
plaintiff may be granted a writ of preliminary
prohibition or mandatory injunction:
Sec. 15. Preliminary Injunction. The court may grant
preliminary injunction, in accordance with the
provisions of Rule 58 hereof, to prevent the defendant
from committing further acts of dispossession against
the plaintiff.
A possessor deprived of his possession through forcible
entry or unlawful detainer may, within five (5) days
from the filing of the complaint, present a motion in the

action for forcible entry or unlawful detainer for the

issuance of a writ of preliminary mandatory injunction
to restore him in his possession. The court shall decide
the motion within thirty (30) days from the filing
thereof.
If, after due proceedings, the trial court finds for
the plaintiff, it shall then render judgment in his or
her favor, thus:
Sec. 17. Judgment. If, after trial, the court finds that the
allegations of the complaint are true, it shall render
judgment in favor of the plaintiff for the restitution of
the premises, the sum justly due as arrears of rent or as
reasonable compensation for the use and occupation of
the premises, attorneys fees and costs. If it finds that
said allegations are not true, it shall render judgment for
the defendant to recover his costs. If a counterclaim is
established, the court shall render judgment for the sum
found in arrears from either party and award costs as
justice requires.
From the aforementioned provisions of the
Rules of Court and by its very nature and purpose,
an action for unlawful detainer or forcible entry is a
real action and in personam because the plaintiff
seeks to enforce a personal obligation or liability

on the defendant under Article 539 of the New Civil

Code,[29] for the latter to vacate the property subject
of the action, restore physical possession thereof
to the plaintiff, and pay actual damages by way of
reasonable compensation for his use or occupation
of the property.[30]
As gleaned from the averments of the
petitioners complaint in the MTC, she sought a writ
of a preliminary injunction from the MTC and
prayed that the said writ be made permanent.
Under its decision, the MTC ordered the defendant
therein (the respondent in this case), to vacate the
property and pay a monthly rental of P1,000.00 to
the plaintiff therein (the petitioner in this case).
On the issue of whether the respondent was
validly served with the summons and complaint by
the Sheriff on April 5, 1999, the petitioner asserts
that since her action of forcible entry against the
respondent in Civil Case No. 879 was in
personam, summons may be served on the
respondent, by substituted service, through her
brother, Oscar Layno, in accordance with Section
7, Rule 14 of the Rules of Court. The petitioner
avers that Oscar Layno, a person of suitable age

and discretion, was residing in the house of the

respondent on April 5, 1999. She avers that the
fact that the house was leased to and occupied by
Eduardo Gonzales was of no moment. Moreover,
the Sheriff is presumed to have performed his duty
of properly serving the summons on the
respondent by substituted service.
The contention of the petitioner has no merit.
In Asiavest Limited v. Court of Appeals,[31] the
Court had the occasion to state:
In an action in personam, jurisdiction over the person of
the defendant is necessary for the court to validly try
and decide the case. Jurisdiction over the person of
a resident defendant who does not voluntarily appear in
court can be acquired by personal service of summons
as provided under Section 7, Rule 14 of the Rules of
Court. If he cannot be personally served with summons
within a reasonable time, substituted service may be
made in accordance with Section 8 of said Rule. If he is
temporarily out of the country, any of the following
modes of service may be resorted to: (a) substituted
service set forth in Section 8; (2) personal service
outside the country, with leave of court; (3) service by

publication, also with leave of court; or (4) any other

manner the court may deem sufficient.[32]
Thus, any judgment of the court which has no
jurisdiction over the person of the defendant is null
and void.[33]
In the present case, the records show that the
respondent, before and after his marriage to Jarl
Jensen on August 23, 1987, remained a resident of
Barangay Buenlag, Calasiao, Pangasinan. This
can be gleaned from the Deed of Absolute Sale
dated August 26, 1992 in which she declared that
she was a resident of said barangay. Moreover, in
the Real Estate Mortgage Contract dated February
9, 1999, ten days before the complaint in Civil
Case No. 879 was filed, the petitioner categorically
stated that she was a Filipino and a resident of
Barangay
Buenlag,
Calasiao,
Pangasinan.
Considering that the respondent was in Oslo,
Norway, having left the Philippines on February 17,
1999, the summons and complaint in Civil Case
No. 879 may only be validly served on her through
substituted service under Section 7, Rule 14 of the
Rules of Court, which reads:

SEC. 7. Substituted service. If, for justifiable causes, the

defendant cannot be served within a reasonable time as
provided in the preceding section, service may be
effected (a) by leaving copies of the summons at the
defendants residence with some person of suitable age
and discretion then residing therein, or (b) by leaving
the copies at defendants office or regular place of
business with some competent person in charge thereof.
Strict compliance with the mode of service is
required in order that the court may acquire
jurisdiction over the person of the defendant. [34] The
statutory requirement of substituted service must
be followed faithfully and strictly and any
substituted service other than that authorized by
the statute is rendered ineffective.[35] As the Court
held in Hamilton v. Levy:[36]
The pertinent facts and circumstances attendant to the
service of summons must be stated in the proof of
service or Officers Return; otherwise, any substituted
service made in lieu of personal service cannot be
upheld. This is necessary because substituted service is
in derogation of the usual method of service. It is a
method extraordinary in character and hence may be
used only as prescribed and in the circumstances

authorized by statute. Here, no such explanation was

made. Failure to faithfully, strictly, and fully comply
with the requirements of substituted service renders said
service ineffective.[37]
In Keister v. Narcereo, the Court held that the
term dwelling house or residence are generally
held to refer to the time of service; hence, it is not
sufficient to leave the summons at the formers
dwelling house, residence or place of abode, as
the case may be. Dwelling house or residence
refers to the place where the person named in the
summons is living at the time when the service is
made, even though he may be temporarily out of
the country at the time. It is, thus, the service of the
summons intended for the defendant that must be
left with the person of suitable age and discretion
residing in the house of the defendant. Compliance
with the rules regarding the service of summons is
as much important as the issue of due process as
of jurisdiction.[39]
[38]

The Return of Service filed by Sheriff Eduardo

J. Abulencia on the service of summons reads:

Respectfully returned to the court of origin the herein

summons and enclosures in the above-entitled case, the
undersigned caused the service on April 5, 1999.
Defendant Vivian Layno Jensen is out of the country as
per information from her brother Oscar Layno, however,
copy of summons and enclosures was received by her
brother Oscar Layno on April 5, 1999 as evidenced by
his signature appearing in the original summons.
Calasiao, Pangasinan, April 6, 1999.
(Sgd.)
EDUARDO J. ABULENCIA
Junior Process Server[40]

As gleaned from the said return, there is no

showing that as of April 5, 1999, the house where
the Sheriff found Oscar Layno was the latters
residence or that of the respondent herein. Neither
is there any showing that the Sheriff tried to
ascertain where the residence of the respondent
was on the said date. It turned out that the

occupant of the house was a lessor, Eduardo

Gonzales, and that Oscar Layno was in the
premises only to collect the rentals from him. The
service of the summons on a person at a place
where he was a visitor is not considered to have
been left at the residence or place or abode, where
he has another place at which he ordinarily stays
and to which he intends to return.[41]
The Voters Registration Record of Oscar Layno
dated June 15, 1997 wherein he declared that he
was a resident of No. 572 Barangay Buenlag,
Calasiao, Pangasinan, as well as the Joint Affidavit
of Vicenta Peralta and Orlando Macasalda cannot
prevail over the Contract of Lease the respondent
had executed in favor of Eduardo Gonzales
showing that the latter had resided and occupied
the house of the respondent as lessee since
Republic of the Philippines
SUPREME COURT
Manila

November 24, 1997, and the affidavit of Eduardo

Gonzales that Oscar Layno was not residing in the
said house on April 5, 1999.
In sum, then, the respondent was not validly
served with summons and the complaint in Civil
Case No. 879 on April 5, 1999, by substituted
service. Hence, the MTC failed to acquire
jurisdiction over the person of the respondent; as
such, the decision of the MTC in Civil Case No.
879 is null and void.
IN LIGHT OF ALL THE FOREGOING, the
petition is DENIED for lack of merit. No costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez,
Tinga, and Chico-Nazario, JJ., concur.
ERNESTO V. YU and ELSIE O. YU, Petitioners,
vs.
BALTAZAR PACLEB,1 Respondent.

FIRST DIVISION
G.R. No. 130316

January 24, 2007

DECISION
CORONA, J.:

The present petition filed under Rule 45 of the Rules of Court

originated from an action for forcible entry and damages filed
by petitioners Ernesto and Elsie Yu against respondent
Baltazar Pacleb.

Aside from taking possession of the property, petitioners also

caused the annotation on TCT No. T-118375 of a decision
rendered in their favor in Civil Case No. 741-93.2 This decision
attained finality on April 19, 1995.

The antecedent facts follow.

Petitioners alleged that they exercised ownership rights as well

as enjoyed open, public and peaceful possession over the
property from September 12, 1992 until the early part of
September 1995. During this time, respondent was in the
United States.

Sometime in September 1992, Ruperto Javier allegedly

offered to sell Lot No. 6853-D to petitioners for P75 per
sq.m. The lot was approximately 18,000 square meters and
was located in Barangay Langkaan, Dasmarias, Cavite.
Javier supposedly purchased the lot from one Rebecca del
Rosario who, in turn, acquired it from respondent and his wife.
The title of the property (Transfer Certificate of Title [TCT] No.
T-118375), however, remained in the names of respondent
and his wife. The instruments in support of the series of
alleged sales were not registered.
lawphil.net

On September 11, 1992, petitioners accepted the offer and

gave Javier P200,000 as downpayment for the lot. Javier then
delivered his supposed muniments of title to petitioners. After
the execution of a contract to sell, he formally turned over the
property to petiti oners.
At the time of the turn-over, a portion of the lot was occupied
by Ramon C. Pacleb, respondents son, and his wife as
tenants. On September 12, 1992, Ramon and his wife
allegedly surrendered possession of their portion to
petitioners. Later on, petitioners appointed Ramon as their
trustee over the subject lot.

Upon respondents return to the Philippines in May 1995, he

allegedly entered the property by means of force, threat,
intimidation, strategy and stealth thereby ousting petitioners
and their trustee, Ramon.
Despite repeated demands, respondent, asserting his rights as
registered owner of the property, refused to vacate the
premises and surrender its possession to petitioners.
Petitioners filed an action for forcible entry3 in the Municipal
Trial Court (MTC) of Dasmarias, Cavite on November 23,
1995. Respondent filed an answer with compulsory
counterclaim dated December 8, 1995. After the issues were
joined, the MTC required the submission of the parties
position papers at a preliminary conference on March 11,
1996. Respondent failed to comply.
On June 17, 1996, the MTC ruled:
WHEREFORE, in view of the foregoing, the [respondent] and
other persons claiming right under him are hereby ordered to

surrender physical possession of Lot No. 6853-D in favor of

the [petitioners] and to pay the sum of TWENTY-FIVE
THOUSAND (P25,000.00) PESOS as attorneys fees.
SO ORDERED.4
On appeal,5 the Regional Trial Court (RTC) of Imus, Cavite
rendered a decision affirming the MTC decision in toto.6
Respondent elevated his case to the Court of Appeals
(CA)7 which rendered the assailed decision on March 18,
1997:
WHEREFORE, the Petition is GRANTED; the Decision dated
October 25, 1996 of the [RTC] of Imus, Cavite in Civil Case
No. 052-96 and the Decision of the [MTC] of Dasmarias,
Cavite in Civil Case No. 182 are SET ASIDE; and Civil Case
No. 182 for Forcible Entry and Damages is hereby ordered
DISMISSED. No pronouncement as to costs.
SO ORDERED.8
In a resolution dated August 20, 1997, the CA denied
petitioners motion for reconsideration for lack of merit.
Before us now come petitioners who claim that the appellate
court erred in finding that respondent had prior physical
possession of the subject property.

strategy or stealth."9 The plaintiff, however, cannot prevail

where it appears that, as between himself and the defendant,
the latter had possession antedating his own.10 We are
generally precluded in a Rule 45 petition from reviewing
factual evidence tracing the events prior to the first act of
spoliation.11 However, the conflicting factual findings of the
MTC and RTC on one hand, and the CA on the other, require
us to make an exception.
We overrule petitioners contentions.
The Civil Code states that possession is the holding of a thing
or the enjoyment of a right.12 In the grammatical sense, to
possess means to have, to actually and physically occupy a
thing, with or without right.13 "Possession always includes the
idea of occupation x x x. It is not necessary that the person in
possession should himself be the occupant. The occupancy
can be held by another in his name."14 Without occupancy,
there is no possession.15
Two things are paramount in possession.16 First, there must be
occupancy, apprehension or taking. Second, there must be
intent to possess (animus possidendi).17
Here, petitioners failed to establish that they had prior physical
possession to justify a ruling in their favor in the complaint for
forcible entry against respondent.

lawphil.net

"In an action for forcible entry, the plaintiff must prove that he
was in prior possession of the land or building and that he was
deprived thereof by means of force, intimidation, threat,

In the decision in Civil Case No. 741-93 (a case for specific

performance and damages against Javier, the alleged vendor
of the lot in question) upon which petitioners based their right
to possess in the first place, the trial court categorically stated:

The [petitioners were never placed] in possession of the

subject property on which [was] planned to be [site of] a
piggery, nor [were they] given a clearance or certification from
the Municipal Agrarian Reform Officer.18(emphasis ours)
The claim that the lot was turned over to petitioners in 1992
was self-serving in the face of this factual finding. On the other
hand, the tax declarations and receipts in the name of
respondent in 1994 and 1995 established the possession of
respondent.19 The payment of real estate tax is one of the most
persuasive and positive indications showing the will of a
person to possess in concepto de dueo or with claim of
ownership.20
"[P]ossession in the eyes of the law does not mean that a man
has to have his feet on every square meter of the ground
before he is deemed in possession."21 In this case, Ramon, as
respondents son, was named caretaker when respondent left
for the United States in 1983.22 Due to the eventual loss of
trust and confidence in Ramon, however, respondent
transferred the administration of the land to his other son,
Oscar, in January 1995 until his return in May 1995.23 In other
words, the subject land was in the possession of the
respondents sons during the contested period.
Petitioners cite an alleged document (Kusangloob na
Pagsasauli ng Lupang Sakahan at Pagpapahayag ng
Pagtalikod sa Karapatan) dated March 10, 1995 executed by
them and Ramon to prove a turn over of possession. They
also seek to prove their exercise of rights over the land
through alleged frequent visits and the designation of Ramon
as their own trustee as declared in a joint affidavit attached to

their position paper filed with the MTC. These instruments,

however, fail to convince us of petitioners actual occupancy of
the subject land. First, petitioners themselves acknowledged
that Ramon and his wife occupied part of the land as tenants
of respondent. Second, Ramon, a mere tenant, had no
authority to sign such document dated March 10, 1995 waiving
all rights to the land. Third, there was no clear proof in the
records of the appointment of Ramon as petitioners trustee
save their self-serving statements to this effect. Finally, at the
time the Kusangloob na Pagsasauli document was executed,
the caretaker of the land was no longer Ramon but Oscar.24
Most important, the title of the land in question (TCT No. T118375) remained in the name of respondent.25 "As the
registered owner, petitioner had a right to the possession of
the property, which is one of the attributes of ownership."26 The
Civil Code states:
Art. 538. Possession as a fact cannot be recognized at the
same time in two different personalities except in the cases of
co-possession. Should a question arise regarding the fact of
possession, the present possessor shall be preferred; if there
are two possessors, the one longer in possession; if the dates
of the possession are the same, the one who presents a title;
and if all these conditions are equal, the thing shall be placed
in judicial deposit pending determination of its possession or
ownership through proper proceedings.
In view of the evidence establishing respondents continuing
possession of the subject property, petitioners allegation that
respondent deprived them of actual possession by means of

force, intimidation and threat was clearly untenable. In Gaza v.

Lim, we held that:
Where a dispute over possession arises between two persons,
the person first having actual possession is the one who is
entitled to maintain the action granted by law; otherwise, a
mere usurper without any right whatever, might enter upon the
property of another and, by allowing himself to be ordered off,
could acquire the right to maintain the action of forcible entry
and detainer, however momentary his intrusion might have
been.27

THIRD DIVISION
[G.R. No. 146594. June 10, 2002]

REBECCA
T.
CABUTIHAN, petitioner,
vs. LANDCENTER CONSTRUCTION &
DEVELOPMENT
CORPORATION, respondent.
DECISION
PANGANIBAN, J.:

Breach of contract gives rise to a cause of action for

specific performance or for rescission. A suit for such
breach is not capable of pecuniary estimation; hence,
the assessed value of the real estate, subject of the said

WHEREFORE, the petition is hereby DENIED. The decision of

the Court of Appeals dated March 18, 1997 in CA-G.R. SP No.
42604 is AFFIRMED.
Costs against petitioners.
SO ORDERED.
RENATO C. CORONA
Associate Justice

action, should not be considered in computing the filing

fees. Neither a misjoinder nor a non-joinder of parties is
a ground for dismissal of an action, because parties may
be dropped or added at any stage of the proceedings.
The Case
Before us is a
Petition for Review
on Certiorari under Rule 45, assailing the Orders dated
September 8, 2000 and November 21, 2000,
promulgated by of the Regional Trial Court (RTC) of
Pasig City, Branch 263.[1] The first assailed Order
disposed as follows:
WHEREFORE, foregoing premises considered, this
Court hereby resolves to dismiss the instant complaint. [2]

Reconsideration
challenged Order.[3]

was

denied

in

the

second

The Facts
Culled from the pleadings, the facts of this case are
as follows.
On December 3, 1996, herein respondent
Landcenter Construction & Development Corporation,
represented by Wilfredo B.Maghuyop -- entered into an
Agreement[4] with Petitioner Rebecca Cabutihan.The
Agreement stipulates:
WHEREAS, [respondent corporation], x x x is the
absolute owner, x x x of a parcel of land situated at Kaybiga, Paranaque, Metro Manila covered under Transfer
Certificate of Title No. (S-30409) (partially cancelled by
TCT Nos. 110001 to 110239) and particularly described
as follows:
A parcel of land (Plan Psu-80206, Case No. 290,
G.L.R.O. Record No. 2291), situated in the Barrio of
Kay-biga, Municipality of Paranaque, Province of
Rizal. Bounded on the NE., by properties of Eulogio
Cruz and Isidro Alano; on the E., by property of Justo
Bernardo; on the SE., by properties of Marcelo

Nofuente and Lorenzo Molera; on the SW., by

properties of Higino and Pedro P. Lopez; on the W., by
property of Odon Rodriguez; and on the NW., by
properties of Evaristo de los Santos and Pastor
Leonardo.....; containing an area of ONE HUNDRED
SEVEN THOUSAND AND FORTY SEVEN (107,047)
SQUARE METERS, more or less.
WHEREAS, [respondent corporation] decided to
engage the assistance of [petitioner] and x x x herein
called the FACILITATOR for the purpose of facilitating
and arranging the recovery of the property in question,
as well as the financing of such undertakings necessary
in connection thereto;
WHEREFORE, premises considered and of the mutual
covenants of the parties, they have agreed, as follows:
1. The FACILITATOR undertakes to effect the
recovery of the property subject hereof,
including the financing of the undertaking, up
to the registration of the same in the name of
[respondent corporation], except any and all
taxes due;
2. The FACILITATOR shall be responsible for
whatever arrangements necessary in relation to

the squatters presently occupying [a] portion of

the property, as well as the legitimate buyers of
lots thereof;
3. As compensation for the undertaking of the
FACILITATOR, [she] shall be entitled to
Twenty [Percent] (20%) of the total area of the
property thus recovered for and in behalf of
[respondent corporation].
xxx xxx xxx.[5]
Armed with Board Resolution No. 01, Series of
1997,[6] which had authorized her to represent the
corporation, Luz Baylon Ponce entered into a February
11, 1997 Deed of Undertaking with a group composed
of petitioner, Wenifredo P. Forro, Nicanor Radan Sr. and
Atty. Prospero A. Anave. The Deed states the following:
WHEREAS, the UNDERTAKER [respondent
corporation] solicited, engaged and hereby voluntarily
acknowledges the assistance of certain persons, in
recovering, arranging and financing the undertaking up
to completion/consummation of the same;
WHEREAS, the UNDERTAKER freely, voluntarily,
unconditionally and irrevocably agreed, committed and

undertook to compensate x x x said persons, in the

manner, specified hereinbelow;
WHEREFORE, considering the foregoing premises, and
the mutual covenants of the parties, the UNDERTAKER
hereby unconditionally and irrevocably [c]ommit[s] and
[u]ndertake[s], as follows:
1. To pay or compensate the following persons, based
on the gross area of the afore-described parcel of land or
gross proceeds of the sale thereof, as the case may be, to
wit:
Rebecca T.
Cabutihan ------------------------------------ 20%
Wenifredo P.
Forro ----------------------------------- 10%
Nicanor Radan,
Sr. ------------------------------------ 4%
Atty. Prospero A.
Anave ----------------------------------- 2.5
%
TOTAL ----------------------------------- 36.5%

2. Execute a Deed of Assignment unto and in favor of

each of the persons above-mentioned corresponding to
their respective shares in the subject parcel of land or in
the proceeds thereof;
3. This Undertaking as well as the Deed of Assignment
above-stated shall be effective and binding upon the
heirs, successors-in-interest, assigns or designates of the
parties herein.[7]
An action for specific performance with damages
was filed by petitioner on October 14, 1999 before the
RTC of Pasig City, Branch 263. She alleged:
[6.] [Petitioner] accomplished her undertakings under
the subject Agreement and the Undertaking. So in a
letter dated 18 April 1997, x x x, [respondent
corporation] was informed accordingly
thereof.Simultaneously, [petitioner] demanded upon
[respondent corporation] to execute the corresponding
Deed of Assignment of the lots in the subject property,
as compensation for the services rendered in favor of
the [respondent corporation]. The subject letter was duly
received and acknowledged receipt, by then Acting
Corporate Secretary of the [respondent corporation].

[7.] [Respondent corporation] failed and refused to act

on x x x said demand of [petitioner]. Hence, [she] sent a
letter dated May 8, 1997, to the Register of Deeds for
Paranaque, to inform x x x said Office of x x x [her]
claim x x x;
[8.] x x x [T]he subject property was already transferred
to and registered in the name of [respondent
corporation] under Transfer Certificate of Title No.
-123917-, of the Registry of Deeds for Paranaque City x
x x;
xxx xxx xxx
[10.] With x x x said title of the property now in the
possession of the [respondent corporation], [petitioner]
is apprehensive that the more that [she] will not be able
to obtain from [respondent corporation], compliance
with the afore-stated Agreement and Undertaking, to the
extreme detriment and prejudice of [petitioner] and her
group, x x x;
xxx xxx xxx
[12.] Then in a letter,[8] dated 10 September 1999,
[petitioner] through counsel sent to [respondent
corporation] a Formal Demand, to comply with its

obligation x x x but x x x [respondent corporation] did

not heed the demand. x x x.[9]
Petitioner prayed, inter alia, that respondent
corporation be ordered to execute the appropriate
document assigning, conveying, transferring and
delivering the particular lots in her favor. The lots
represented compensation for the undertakings she
performed and accomplished, as embodied in the
Agreement.
Respondent then filed a Motion to Dismiss, alleging
the following:
5. Because of the troubled situation obtaining at the
management level of [respondent corporation], the sale
between [respondent corporation] and PCIB regarding
the Fourth Estate Subdivision was not registered with
the Register of Deeds office, although [respondent
corporation] continued holding the deed of sale over the
Fourth Estate Subdivision.
6. A group of persons led by one Wilfredo Maghuyop,
including herein [petitioner], Wenifredo Forro, Nicanor
Radan, and others, taking advantage of the management
mess at [respondent corporation], tried to grab
ownership of the [respondent corporation], and with use

of fraud, cheat, misrepresentation and theft of vital

documents from the office of [respondent corporation],
succeeded in filing with the Securities and Exchange
Commission false papers and documents purporting to
show that the Articles of Incorporation of [respondent
corporation] had been amended, installing Maghuyop as
president of [respondent corporation]. It was on these
occasions that [petitioner] and her companions x x x,
with use of fraud, stealth, tricks, deceit and cheat
succeeded in letting Luz Baylon Ponce sign a so-called
Deed of Undertaking by virtue of which [respondent
corporation] is duty-bound to give to [petitioner], Forro,
Radan and Atty. Prospero Anave 36.5% of the land area
of the Fourth Estate Subdivision as compensation for
alleged services and expenses made by these people in
favor of [respondent corporation]. They also caused said
x x x Maghuyop to sign an Agreement with [petitioner]
expressing an obligation on the part of [respondent
corporation] to give a big part of the land x x x to
[petitioner]. These Agreement and Deed of Undertaking
are being made by herein [petitioner] as her causes of
action in the present case.
Wilfredo Maghuyop was a stranger to [respondent
corporation], and he was an impostor used by
[petitioner] and her companions to barge into the

management of [respondent corporation] for the purpose

of stealing and creating an obligation against
[respondent corporation] in their favor.

[respondent corporations] title which these men caused

Luz Baylon Ponce to sign, and she unknowingly signed
the Deed of Undertaking. x x x.[10]

7. But Luz Baylon Ponce, whose signature appears on

the instrument denominated as Deed of Undertaking,
vehemently denies that she signed said instrument freely
and voluntarily. She says that Wenifredo Forro and
Nicanor Radan were once real estate agents of
[respondent corporation] who promised to help sell lots
from her project Villaluz II Subdivision located [in]
Malibay, Pasay City. According to Luz Baylon Ponce,
the Board of Directors of [respondent corporation]
negotiated with Forro and Radan for the latter to sell
units/lots of Villaluz II Subdivision, and to help obtain a
financier who would finance for the expenses for the
reconstitution of the lost title of the Fourth Estate
Subdivision situated [in] Sucat, Paranaque City. Shortly
thereafter, these two men resigned from [respondent
corporation] as agents, after they manipulated the
signing of x x x said Deed of Undertaking by Luz
Baylon Ponce on February 11, 1997. The latter is an old
woman 80 years of age. She is weak, has x x x poor
sight, and is feeble in her mental ability. Forro and
Radan inserted the Deed of Undertaking among the
papers intended for application for reconstitution of

In the Motion, respondent sought the dismissal of

the Complaint on the grounds of (1) improper venue, (2)
lack of jurisdiction over the subject matter, and (3)
nonpayment of the proper docket fees.Specifically, it
contended:
8. That venue is improperly laid
xxx xxx xxx
(b) In other words, the present case filed by [petitioner]
is for her recovery (and for her companions) of 36.5%
of [respondent corporations] land (Fourth Estate
Subdivision) or her interest therein. x x x therefore, x x
x the present case filed x x x is a real action or an
action in rem.
(c) x x x [Following] Section 1, Rule 4 of the Rules of
Court, as amended x x x the present case should have
been filed by [petitioner] with the proper court in
Paranque City which has jurisdiction over the x x x
Fourth Estate Subdivision because said subdivision is
situated in Paranaque City. Since [petitioner] filed the

present case with this x x x [c]ourt in Pasig City, she

chose a wrong venue x x x.
xxx xxx xxx

9. That the [c]ourt has no jurisdiction over the subject

matter of the claim
xxx xxx xxx

(c) x x x Wenifredo P. Forro, Nicanor Radan, Sr. and

Atty. Prospero A. Anave are not named as plaintiffs in
the complaint. [Petitioner] x x x is not named as
representative of Forro, Radan and Anave by virtue of a
Special Power of Attorney or other formal written
authority. According to the Rules, where the action is
allowed to be prosecuted or defended by a
representative or someone acting in a fiduciary capacity,
the beneficiary shall be included in the title of the case
and shall be deemed to be the real party in interest (Sec.
3, Rule 3, Rules of Court, as amended x x x).
xxx xxx xxx

10. That a condition precedent for filing the claim has

not been complied with
xxx xxx xxx
(b) Obviously, [petitioner] has not paid the docket or
filing fees on the value of her land claim x x x. Thirtysix percent (36%) x x x is P180,000,000.00, x x x.[11]
Ruling of the Trial Court
The RTC ruled that the allegations in the Complaint
show that its primary objective was to recover real
property. Equally important, the prayer was to compel
respondent to execute the necessary deeds of transfer
and conveyance of a portion of the property
corresponding to 36.5 percent of its total area or, in the
alternative, to hold respondent liable for the value of the
said portion, based on the prevailing market price. The
RTC further ruled that, since the suit would affect the
title to the property, it should have been instituted in the
trial court where the property was situated. [12]
Furthermore, the action was filed only by
petitioner. There was no allegation that she had been
authorized by Forro, Radan and Anave to represent their
respective shares in the compensation.

Finally, since this case was an action in rem, it was

imperative for petitioner to pay the appropriate docket
or filing fees equivalent to the pecuniary value of her
claim, a duty she failed to discharge.Consequently,
following Manchester Development Corp. v. Court of
Appeals,[13] the trial court never acquired jurisdiction
over the case.
Hence, this Petition.[14]
Issues
In her Memorandum, petitioner phrases the issue in
this wise:
Whether or not the dismissal of the [C]omplaint was in
accordance with the pertinent law and jurisprudence on
the matter.[15]
She argues that the RTC erred in dismissing her
Complaint on the grounds of (1) improper venue, (2)
non-joinder of necessary parties, and (3) non-payment
of proper docket fees.
This Courts Ruling
The Petition is meritorious.

First Issue:
Proper Venue
Maintaining that the action is in personam, not in
rem, petitioner alleges that the venue was properly
laid. The fact that she ultimately sought the conveyance
of real property not located in the territorial jurisdiction
of the RTC of Pasig is, she claims, an anticipated
consequence and beyond the cause for which the action
was instituted.
On the other hand, the RTC ruled that since the
primary objective of petitioner was to recover real
property -- even though her Complaint was for specific
performance and damages -- her action should have
been instituted in the trial court where the property was
situated, in accordance with Commodities Storage & Ice
Plant Corp. v. Court of Appeals.[16]
We agree with petitioner. Sections 1 and 2, Rule 4
of the Rules of Court provide an answer to the issue of
venue.[17] Actions affecting title to or possession of real
property or an interest therein (real actions), shall be
commenced and tried in the proper court that has
territorial jurisdiction over the area where the real
property is situated. On the other hand, all other actions,

(personal actions) shall be commenced and tried in the

proper courts where the plaintiff or any of the principal
plaintiffs resides or where the defendant or any of the
principal defendants resides.
In Commodities Storage cited earlier, petitioner
spouses obtained a loan secured by a mortgage over
their land and ice plant in Sta. Maria, Bulacan. Because
they had failed to pay the loan, the mortgage was
foreclosed and the ice plant auctioned. Before the RTC
of Manila, they sued the bank for damages and for the
fixing of the redemption period. Since the spouses
ultimately sought redemption of the mortgaged
property, the action affected the mortgage debtors title
to the foreclosed property; hence, it was a real action.
[18]
Where the action affects title to the property, it should
be instituted in the trial court where the property is
situated.[19]
In National Steel Corp. v. Court of Appeals, [20] the
Court held that an action in which petitioner seeks the
execution of a deed of sale of a parcel of land in his
favor x x x has been held to be for the recovery of the
real property and not for specific performance since his
primary objective is to regain the ownership and
possession of the parcel of land.

However, in La Tondea Distillers, Inc. v.

Ponferrada,[21] private respondents filed an action for
specific performance with damages before the RTC of
Bacolod City. The defendants allegedly reneged on their
contract to sell to them a parcel of land located in Bago
City - - a piece of property which the latter sold to
petitioner while the case was pending before the said
RTC. Private respondent did not claim ownership but,
by annotating a notice of lis pendens on the title,
recognized defendants ownership thereof. This Court
ruled that the venue had properly been laid in the RTC
of Bacolod, even if the property was situated in Bago.
In Siasoco v. Court of Appeals,[22] private respondent
filed a case for specific performance with damages
before the RTC of Quezon City. It alleged that after it
accepted the offer of petitioners, they sold to a third
person several parcels of land located in Montalban,
Rizal. The Supreme Court sustained the trial courts
order allowing an amendment of the original Complaint
for specific performance with damages. Contrary to
petitioners position that the RTC of Quezon City had no
jurisdiction over the case, as the subject lots were
located in Montalban, Rizal, the said RTC had
jurisdiction over the original Complaint. The Court
reiterated the rule that a case for specific performance

with damages is a personal action which may be filed in

a court where any of the parties reside.
A close scrutiny of National Steel and Ruiz reveals
that the prayers for the execution of a Deed of Sale were
not in any way connected to a contract, like the
Undertaking in this case. Hence, even if there were
prayers for the execution of a deed of sale, the actions
filed in the said cases were not for specific performance.
In the present case, petitioner seeks payment of her
services in accordance with the undertaking the parties
signed. Breach of contract gives rise to a cause of action
for specific performance or for rescission. [23] If petitioner
had filed an action in rem for the conveyance of real
property, the dismissal of the case would have been
proper on the ground of lack of cause of action.
Second Issue:
Non-Joinder of Proper Parties
Petitioner claims that she was duly authorized and
empowered to represent the members of her group and
to prosecute their claims on their behalf via a Special
Power of Attorney executed by Forro, Radan and
Anave. Besides, she argues that the omission of her

companions as plaintiffs did not prevent the RTC from

proceeding with the action, because whatever judgment
would be rendered would be without prejudice to their
rights. In the alternative, she avers that the trial court
may add or drop a party or parties at any stage of the
action and on such terms as are just.
The RTC ruled that there was no allegation
anywhere in the records that petitioner had been
authorized to represent Forro, Radan and Anave, who
were real parties-in-interest with respect to their
respective shares of the 36.5 percent claim. Such being
the case, the trial court never acquired jurisdiction over
the subject matter of their claims.
Again, we side with petitioner. Neither a misjoinder
nor a non-joinder of parties is a ground for the dismissal
of an action. Parties may be dropped or added by order
of the court, on motion of any party or on the courts
own initiative at any stage of the action. [24] The RTC
should have ordered the joinder of such party, and
noncompliance with the said order would have been
ground for dismissal of the action.
Although the Complaint prayed for the conveyance
of the whole 36.5 percent claim without impleading the
companions of petitioner as party-litigants, the RTC

could have separately proceeded with the case as far as

her 20 percent share in the claim was concerned,
independent of the other 16.5 percent. This fact means
that her companions are not indispensable parties
without whom no final determination can be had. [25] At
best, they are mere necessary parties who ought to be
impleaded for a complete determination or settlement of
the claim subject of the action.[26] The non-inclusion of a
necessary party does not prevent the court from
proceeding with the action, and the judgment rendered
therein shall be without prejudice to the rights of such
party.[27]

million. Hence, when compared to this figure, the P210

paid as docket fees would appear paltry.

Third Issue:

Besides, if during the course of the trial, petitioners

20 percent claim on the Fourth Estate Subdivision can
no longer be satisfied and the payment of its monetary
equivalent is the only solution left, Sunlife Insurance
Office, Ltd. v. Asuncion[30] holds as follows: 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.

Correct Docket Fees

Petitioner insists that the value of the real property,
which was the subject of the contract, has nothing to do
with the determination of the correct docket or filing
fees.
The RTC ruled that although the amount of damages
sought had not been specified in the body of the
Complaint, one can infer from the assessed value of the
disputed land that it would amount to P50

We hold that the trial court and respondent used

technicalities to avoid the resolution of the case and to
trifle with the law. True, Section 5, Rule 141 of the
Rules of Court requires that the assessed value of the
real estate, subject of an action, should be considered in
computing the filing fees. But the Court has already
clarified that the Rule does not apply to an action for
specific performance,[28] which is classified as an action
not capable of pecuniary estimation.[29]

WHEREFORE,
the
hereby GRANTED, and
Orders REVERSED and SET

Petition

is
the
assailed
ASIDE. The
case

is REMANDED to the court of origin which is ordered

to PROCEED with deliberate speed in disposing of the
case. No costs.

SO ORDERED.
Sandoval-Gutierrez, and Carpio, JJ., concur.
Puno, (Chairman), J., abroad, on official leave.

EN BANC
[G.R. No. L-32170. March 31, 1971.]
CITIZENS SURETY & INSURANCE COMPANY,
INC., Petitioner, v. HON. JUDGE A.
MELENCIO-HERRERA, SANTIAGO DACANAY,
and JOSEFINA DACANAY, Respondents.
Dayos, Tesoro & Gloria, Jr. for Petitioner.
Respondent Judge for and in his own behalf.
SYLLABUS
1. REMEDIAL LAW; JURISDICTION; ACTION IN
PERSONAM; PERSONAL SERVICE OF SUMMONS
REQUIRED. We agree with respondent Judge
that the action of plaintiff petitioner, being in
personam, the Court could not validly acquire
jurisdiction on a non-appearing defendant, absent
a personal service of summons within the forum.
We have explicitly so ruled in Pantaleon v.

Asuncion, 105 Phil. 765, pointing out without such

personal service, any judgment on a nonappearing defendant would be violative of due
process. In the aforecited case this Court, through
Justice Roberto Concepcion, now Chief Justice,
ruled as follows: . . . "It is a well-settled principle
of Constitutional Law that, in an action strictly in
personam, like the one at bar, personal service of
summons, within the forum, is essential to the
acquisition of jurisdiction over the person of the
defendant, who does not voluntary submit himself
to the authority of the court. In other words,
summons by publication cannot consistently
with the due process clause in the Bill of Rights
confer upon the court jurisdiction over said
defendants.Due process of law requires personal
service to support a personal judgment, and,
when the proceeding is strictly in personam
brought to determine the personal rights and
obligations of the parties, personal service within
the state or a voluntary appearance in the case is
essential to the acquisition of jurisdiction so as to
constitute compliance with the constitutional
requirement of due process. . . .Although a state
legislature has more control over the form of

service on its own residents than nonresidents, it

has been held that in actions in personam . . .
service by publication on resident defendants who
are personally within the state and can be found
therein is not "due process of law," and statute
allowing it is unconstitutional. (16A C.J.S., pp.
786, 789; Emphasis our)"
2. CIVIL LAW; OBLIGATIONS AND CONTRACTS;
CREDITORS; REMEDY AGAINST ABSCONDING
DEBTORS. The proper recourse for a creditor in
the same situation as petitioner is to locate
properties, real or personal, of the resident
defendant debtor with unknown address and
cause them to be attached under Rule 57, Sec.
l(f), in which case, the enactment converts the
action into a proceeding in rem or quasi in rem
and the summons by publication may then
accordingly be deemed valid and effective But
because debtors who abscond and conceal
themselves are also quite adept at concealing
their properties, the dismissal of the case below
by respondent Judge should be set aside and the
case held pending in the courts archives, until
petitioner as plaintiff succeed in determining the
whereabouts of the defendants person or
properties and causes valid summons to be
served personally or by publication as the case
may be. In this manner, the tolling of the period
of prescription for as long as the debtor remains
in hiding would properly be a matter of court
record, and he can not emerge after a sufficient

lapse of time from the dismissal of the case to

profit from his own misdeed and claim
prescription of his just debt.
DECISION
REYES, J.B.L., J.:
Petitioner Citizens Surety & Insurance Company,
Inc. seeks review of an order of respondent Judge
in Civil Case No. 77134 of the Court of First
Instance of Manila, Branch XVII, entitled "Citizens
Surety & Insurance Co., Inc. v. Santiago Dacanay
and Josefina Dacanay," dismissing the complaint
for lack of proper service of summons upon
defendants.
The record is to the effect that petitioner had filed
its complaint in the Court below, alleging that at
request of defendant Santiago Dacanay, the
plaintiff Surety Company had issued its Surety
Bonds Nos. 4942 and 4944, the first, in favor of
Gregorio Fajardo to guarantee payment of a
P5,000-promissory note executed by said
Dacanay, and the second, in favor of
Manufacturers Bank & Trust Co., to guarantee
payment of another promissory note in like
amount; that in consideration of said bonds,
Santiago and Josefina Dacanay executed

Indemnity Agreements, binding themselves jointly

and severally to indemnify plaintiff for any losses,
costs and expenses which it might sustain in
connection with the issuance of the bonds
aforesaid, with interest at 12% per annum; that
as additional security, the Dacanays mortgaged to
plaintiff a parcel of land in Baguio City, covered by
Certificate of Title No. T-8116, the mortgage
having been duly recorded; that the promissory
notes were not paid .and as a result, plaintiff
Surety was compelled to pay P5,000.00 to
Gregorio Fajardo and P4,081.69 to the
Manufacturers Bank; that the Dacanays failed to
reimburse the Surety for such payments,
whereupon the Surety caused the extrajudicial
foreclosure of the mortgage to pay its claim of
P12,941.69 representing its payments, interest
and stipulated liquidated damages: that at the
foreclosure sale, the land mortgaged was sold to
plaintiff, as highest bidder, for the sum of
P2,000.00 leaving an unsatisfied balance of
P10,491.69, that plaintiff sought to recover from
defendants Dacanay, plus 10% thereof as
attorneys fees, and the costs.
At petitioners request, respondent Judge caused
summons to be made by publication in the
newspaper Philippines Herald. But despite the
publication and deposit of a prepaid copy of the
complaint at the Manila post office, defendants did
not appear within the period of 60 days from last
publication, as required by the summons.

Plaintiff then asked that defendants be declared in

default; but :instead, the Judge, by order of May
16, 1970, asked it to show cause why the action
should not be dismissed, the suit being in
personam and defendants not having appeared.
Then, on May 29, 1970, respondent Judge
dismissed the case, despite plaintiff Suretys
argument that the summons by publication was
sufficient and valid under section 16 of Rule 14 of
the Revised Rules of Court.
We agree with respondent Judge that the action
of plaintiff petitioner, being in personam, the
Court could not validly acquire jurisdiction on a
non-appearing defendant, absent a personal
service of summons within the forum. We have
explicitly so ruled in Pantaleon v. Asuncin, 105
Phil. 765, pointing out without such personal
service, any judgment on a non-appearing
defendant would be violative of due process. In
the aforecited case this Court, through Justice
Roberto Concepcin, now Chief Justice, ruled as
follows:jgc:chanrobles.com.ph
"Apart from the foregoing, it is well-settled
principle of Constitutional Law that, in an action
strictly in personam, like the one at bar, personal
service of summons, within the forum. is essential
to the acquisition of jurisdiction over the person of
the defendant, who does not voluntarily submit
himself to the authority of the court. In other

words, summons by publication cannot

consistently with the due process clause in the Bill
of Rights confer upon the court jurisdiction over
said defendants.
Due process of law requires personal service to
support a personal judgment, and. when the
proceeding is strictly in personam brought to
determine the personal rights and obligations of
the parties, personal service within the state or a
voluntary appearance in the case is essential to
the acquisition of jurisdiction so as to constitute
compliance with the constitutional requirement of
due process. . . .
Although a state legislature has more control over
the form of service on its own residents than
nonresidents, it has been held that in actions in
personam . . . service by publication on resident
defendants, who are personally within the state
and can be found therein is not "due process of
law," and a statute allowing it is unconstitutional.
(16A C.J.S., pp. 786, 789; Emphasis ours.)"
The proper recourse for a creditor in the same
situation as petitioner is to locate properties, real
or personal, of the resident defendant debtor with
unknown address and cause them to be attached
under Rule 57, section 1(f), in which case, the
attachment converts the action into a proceeding
in rem or quasi in rem and the summons by
publication may then accordingly be deemed valid

and effective.
But because debtors who abscond and conceal
themselves are also quite adept at concealing
their properties, the dismissal of the case below
by respondent Judge should be set aside and the
case held pending in the courts archives, until
petitioner as plaintiff succeeds in determining the
whereabouts of the defendants person or
properties and causes valid summons to be
served personally or by publication as the case
may be. In this manner, the tolling of the period
of prescription for as long as the debtor remains
in hiding would properly be a matter of court
records and he can not emerge after a sufficient
lapse of time from the dismissal of the case to
profit from his own misdeed and claim
prescription of his just debt.
WHEREFORE, the order of dismissal of the case
issued by the Court below is hereby set aside, and
in the interest of justice, the proceedings are
ordered suspended, to be held pending until the
plaintiff petitioner succeeds in ascertaining the
whereabouts of the defendants and/or locating
properties of the same, to enable proper
summons to be issued conformably to this
Opinion. No costs.
Concepcion, C.J., Makalintal, Zaldivar, Fernando,
Teehankee, Barredo, Villamor and Makasiar, JJ.,
concur.

Dizon and Castro, JJ., reserve their votes.

SECOND DIVISION
[G.R. No. 156187. November 11, 2004]

JIMMY T. GO, petitioner, vs. UNITED

COCONUT PLANTERS BANK, ANGELO
V. MANAHAN, FRANCISCO C. ZARATE,
PERLITA A. URBANO and ATTY.
EDWARD MARTIN, respondents.
DECISION
CHICO-NAZARIO, J.:

Before
Us
is
a
Petition
for
Review
[1]
[2]
on Certiorari assailing the Decision dated 31 July 2002
of the Court of Appeals in CA-G.R. SP No. 62625, the
decretal portion of which reads:

WHEREFORE, the petition is GRANTED and the

assailed orders dated June 7, 2000, August 9, 2000 and
November 8, 2000 are SET ASIDE.
Respondent judge is directed to DISMISS Civil Case
No. 67878 on the ground of improper venue.[3]

Petitioner Jimmy T. Go and Alberto T. Looyuko are

co-owners of Noahs Ark International, Noahs Ark Sugar
Carriers, Noahs Ark Sugar Truckers, Noahs Ark Sugar
Repacker, Noahs Ark Sugar Insurers, Noahs Ark Sugar
Terminal, Noahs Ark Sugar Building, and Noahs Ark
Sugar Refinery.[4]
Sometime in August 1996, petitioner Jimmy T. Go
and Alberto T. Looyuko applied for an Omnibus Line
accommodation with respondent United Coconut
Planters Bank (UCPB) in the amount of Nine Hundred
Million (P900,000,000) Pesos,[5] and was favorably acted
upon by the latter.
The transaction was secured by Real Estate
Mortgages over parcels of land, covered by Transfer
Certificate of Title (TCT) No. 64070, located at
Mandaluyong City with an area of 24,837 square meters,
and registered in the name of Mr. Looyuko; and TCT No.
3325, also located at Mandaluyong City with an area of
14,271 square meters, registered in the name of Noahs
Ark Sugar Refinery.
On 21 July 1997, the approved Omnibus Line
accommodation granted to petitioner was subsequently
cancelled[6] by respondent UCPB. As a consequence,
petitioner Jimmy T. Go demanded from UCPB the return

of the two (2) TCTs (No. 64070 and No. 3325) covered by
Real Estate Mortgages earlier executed. UCPB refused
to return the same and proceeded to have the two (2)
pre-signed Real Estate Mortgages notarized on 22 July
1997 and caused the registration thereof before the
Registry of Deeds of Mandaluyong City on 02 September
1997.
On 15 June 1999, respondent UCPB filed with the
Office of the Clerk of Court and Ex-Officio Sheriff of
Mandaluyong City an extrajudicial foreclosure of real
estate mortgage[7] covered by TCT No. 64070, for
nonpayment of the obligation secured by said mortgage.
As a result, the public auction sale of the mortgaged
property was set on 11 April 2000 and 03 May 2000.
To protect his interest, petitioner Jimmy T. Go filed a
complaint for Cancellation of Real Estate Mortgage and
damages, with prayer for temporary restraining order
and/or writ of preliminary injunction, against respondent
bank and its officers, namely, Angelo V. Manahan,
Francisco C. Zarate, Perlita A. Urbano and Atty. Edward
E. Martin, together with Ex-Officio Sheriff Lydia G. San
Juan and Sheriff IV Helder A. Dyangco, with the Regional
Trial Court of Pasig City, Branch 266, docketed as Civil
Case No. 67878. The complaint was subsequently
amended[8] on 22 May 2000. The amended complaint
alleged, among other things, the following: that petitioner
Jimmy T. Go is a co-owner of the property covered by

TCT No. 64070, although the title is registered only in the

name of Looyuko; that respondent bank was aware that
he is a co-owner as he was asked to sign two deeds of
real estate mortgage covering the subject property; that
the approved omnibus credit line applied for by him and
Looyuko did not materialize and was cancelled by
respondent bank on 21 July 1997, so that the pre-signed
real estate mortgages were likewise cancelled; that he
demanded from respondent bank that TCTs No. 64070
and No. 3325 be returned to him, but respondent bank
refused to do so; that despite the cancellation of the
omnibus credit line on 21 July 1997, respondent bank
had the two deeds of real estate mortgage dated and
notarized on 22 July 1997 and caused the extrajudicial
foreclosure of mortgage constituted on TCT No. 64070;
that the auction sale scheduled on 11 April 2000 and 03
May 2000 be enjoined; that the two real estate
mortgages be cancelled and TCTs No. 64070 and No.
3325 be returned to him; and that respondent bank and
its officers be ordered to pay him moral and exemplary
damages and attorneys fees.
On 07 June 2000, respondent bank, instead of filing
an answer, filed a motion to dismiss[9] based on the
following grounds: 1) that the court has no jurisdiction
over the case due to nonpayment of the proper filing and
docket fees; 2) that the complaint was filed in the wrong
venue; 3) an indispensable party/real party in interest
was not impleaded and, therefore, the complaint states

no cause of action; 4) that the complaint was improperly

verified; and 5) that petitioner is guilty of forum shopping
and submitted an insufficient and false certification of
non-forum shopping.

A motion for reconsideration was filed by petitioner,

which was denied in an order dated 14 November
2002.[17]
[16]

Hence, this petition for review on certiorari.[18]

On 07 June 2000, the trial court issued an
order[10] granting petitioners application for a writ of
preliminary injunction. Correspondingly, the auction sale,
scheduled on 11 April 2000 and 03 May 2000, was
enjoined.
On
09
August
2000,
the
trial
court
[11]
denied respondent banks motion to dismiss Civil Case
No. 67878. A motion for reconsideration [12] was filed, but
the same was likewise denied in an Order [13] dated 08
November 2000.

On 16 June 2003, the Court gave due course to the

petition, and required[19] the parties to file their respective
memoranda. Respondents filed their Joint Memorandum
on 27 August 2003, while petitioner filed his on 25
September 2003 upon prior leave of court for extension.
With leave of this Court, private respondents filed their
reply to petitioners memorandum.
In his memorandum, petitioner raised a lone issue:

Respondent bank questioned said orders before the

Court of Appeals via a petition for certiorari[14] dated 03
January 2001, alleging that the trial court acted without or
in excess of jurisdiction or with grave abuse of discretion
in issuing an order denying the motion to dismiss and the
motion for reconsideration thereof.

WHETHER OR NOT THE COURT OF

APPEALS COMMITTED REVERSIBLE
ERROR WHEN IT FAILED TO APPLY THE
LAW AND ESTABLISHED JURISPRUDENCE
ON THE MATTER BY ISSUING THE
QUESTIONED RESOLUTIONS FINDING
THAT THE CASE A QUO IS A REAL ACTION.

On 31 July 2002, the Court of Appeals [15] set aside

the Orders dated 07 June 2000, 09 August 2000 and 08
November 2000 issued by the trial court and directed the
trial court to dismiss Civil Case No. 67878 on the ground
of improper venue.

Simply put, the issue to be resolved in this case is

whether petitioners complaint for cancellation of real
estate mortgage is a personal or real action for the
purpose of determining venue.

In a real action, the plaintiff seeks the recovery of real

property, or as provided for in Section 1, Rule 4, [20] a real
action is an action affecting title to or possession of real
property, or interest therein. These include partition or
condemnation of, or foreclosure of mortgage on, real
property. The venue for real actions is the same for
regional trial courts and municipal trial courts -- the court
which has territorial jurisdiction over the area where the
real property or any part thereof lies.[21]
Personal action is one brought for the recovery of
personal property, for the enforcement of some contract
or recovery of damages for its breach, or for the recovery
of damages for the commission of an injury to the person
or property.[22] The venue for personal actions is likewise
the same for the regional and municipal trial courts -- the
court of the place where the plaintiff or any of the
principal plaintiffs resides, or where the defendant or any
of the principal defendants resides, at the election of the
plaintiff, as indicated in Section 2 of Rule 4.[23]
It is quite clear then that the controlling factor in
determining venue for cases of the above nature is the
primary objective for which said cases are filed. Thus:
1. In Commodities Storage & Ice Plant Corp. v. Court
of Appeals,[24] this Court ruled that an action to
redeem by the mortgage debtor affects his title to
the foreclosed property. If the action is seasonably
made, it seeks to erase from the title of the

judgment or mortgage debtor the lien created by

registration of the mortgage and sale. If not made
seasonably, it may seek to recover ownership to
the land since the purchasers inchoate title to the
property becomes consolidated after [the]
expiration of the redemption period. Either way,
redemption involves the title to the foreclosed
property. It is a real action.
2. In Fortune Motors, (Phils.), Inc., v. Court of
Appeals,[25] this Court quoting the decision of the
Court of Appeals ruled that since an extrajudicial
foreclosure of real property results in a
conveyance of the title of the property sold to the
highest bidder at the sale, an action to annul the
foreclosure sale is necessarily an action affecting
the title of the property sold. It is therefore a real
action which should be commenced and tried in
the province where the property or part thereof
lies.
3. In Punsalan, Jr. v. Vda. de Lacsamana,[26] this
court ruled that while it is true that petitioner does
not directly seek the recovery . . . of the property in
question, his action for annulment of sale and his
claim for damages are closely intertwined with the
issue of ownership of the building which, under the
law, is considered immovable property, the
recovery of which is petitioners primary objective.
The prevalent doctrine is that an action for the
annulment or rescission of a sale of real property
does not operate to efface the fundamental and

prime objective and nature of the case, which is to

recover said real property. It is a real action.
Respondent Court, therefore, did not err in
dismissing the case on the ground of improper
venue which was timely raised.
4. In Ruiz v. J. M. Tuason Co., Inc., et al.,[27] the court
ruled that although [a] complaint is entitled to be
one for specific performance, yet the fact that
[complainant] asked that a deed of sale of a parcel
of land . . . be issued in his favor and that a
transfer certificate of title covering said land be
issued to him, shows that the primary objective
and nature of the action is to recover the parcel of
land itself because to execute in favor of
complainant the conveyance requested there is
need to make a finding that he is the owner of the
land which in the last analysis resolves itself into
an issue of ownership. Hence, the action must be
commenced in the province where the property is
situated . . . ."
5. In Dr. Antonio A. Lizares, Inc. v. Hon. Hermogenes
Caluag,[28] this Court ruled that an action praying
that defendant be ordered `to accept the payment
being made by plaintiff for the lot which the latter
contracted to buy on installment basis from the
former, to pay plaintiff compensatory damages and
attorneys fees and to enjoin defendant and his
agents from repossessing the lot in question, is
one that affects title to the land under Section 3 of
Rule 5, of the Rules of Court, and shall be

commenced and tried in the province where the

property or any part thereof lies, because,
although the immediate remedy is to compel the
defendant to accept the tender of payment
allegedly made, it is obvious that this relief is
merely the first step to establish plaintiffs title to
[the] real property.
6. In Land Tenure Administration, et al. v. The
Honorable Higinio B. Macadaeg and Alejandro T.
Lim,[29] this Court ruled that where the lessee
seeks to establish an interest in an hacienda that
runs with the land and one that must be respected
by the purchaser of the land even if the latter is not
a party to the original lease contract, the question
of whether or not the standing crop is immovable
property become[s] irrelevant, for venue is
determined by the nature of the principal claim.
Since the lessee is primarily interested in
establishing his right to recover possession of the
land for the purpose of enabling him to gather his
share of the crops, his action is real and must be
brought in the locality where the land is situated.
7. In Espineli & Mojica v. Hon. Santiago and Vda. de
Ramirez,[30] the court ruled that although the main
relief sought in the case at bar was the delivery of
the certificate of title, said relief, in turn, entirely
depended upon who, between the parties, has a
better right to the lot in question. As it is not
possible for the court to decide the main relief,
without passing upon the claim of the parties with

respect to the title to and possession of the lot in

question, the claim shall be determined x x x in the
province where [the] said property or any part
thereof lies.

The case of Carandang v. Court of Appeals,[31] is

more particularly instructive. There, we held that an
action for nullification of the mortgage documents and
foreclosure of the mortgaged property is a real action that
affects the title to the property. Thus, venue of the real
action is before the court having jurisdiction over the
territory in which the property lies, which is the Court of
First Instance of Laguna.
Petitioner in this case contends that a case for
cancellation of mortgage is a personal action and since
he resides at Pasig City, venue was properly laid therein.
He tries to make a point by alluding to the case
of Francisco S. Hernandez v. Rural Bank of Lucena.[32]
Petitioners reliance in the case of Francisco S.
Hernandez v. Rural Bank of Lucena [33] is misplaced.
Firstly, said case was primarily an action to compel the
mortgagee bank to accept payment of the mortgage debt
and to release the mortgage. That action, which is not
expressly included in the enumeration found in Section
2(a) of Rule 4 of the Old Civil Procedure and now under
Section 1, Rule 4 of the 1997 Rules of Civil Procedure,
does not involve titles to the mortgaged lots. It is a
personal action and not a real action. The mortgagee has

not foreclosed the mortgage. The plaintiffs title is not in

question. They are in possession of the mortgaged lots.
Hence, the venue of the plaintiffs personal action is the
place where the defendant or any of the defendants
resides or may be found, or where the plaintiff or any of
the plaintiffs resides, at the election of the plaintiff. In the
case at bar, the action for cancellation of real estate
mortgage filed by herein petitioner was primarily an
action to compel private respondent bank to return to him
the properties covered by TCTs No. 64070 and No. 3325
over which the bank had already initiated foreclosure
proceedings because of the cancellation by the said
respondent bank of the omnibus credit line on 21 July
1997. The prime objective is to recover said real
properties. Secondly, Carandang distinctly articulated
that the ruling in Hernandez does not apply where the
mortgaged property had already been foreclosed. Here,
and as correctly pointed out by the appellate court,
respondent bank had already initiated extrajudicial
foreclosure proceedings, and were it not for the timely
issuance of a restraining order secured by petitioner Go
in the lower court, the same would have already been
sold at a public auction.
In a relatively recent case, Asset Privatization Trust v.
Court of Appeals,[34] it was succinctly stated that the
prayer for the nullification of the mortgage is a prayer
affecting real property, hence, is a real action.

In sum, the cancellation of the real estate mortgage,

subject of the instant petition, is a real action, considering
that a real estate mortgage is a real right and a real
property by itself.[35]An action for cancellation of real
estate mortgage is necessarily an action affecting the title
to the property. It is, therefore, a real action which should
be commenced and tried in Mandaluyong City, the place
where the subject property lies.
WHEREFORE, the instant petition is DENIED for
lack of merit. The assailed decision dated 31 July 2002

FIRST DIVISION
[G.R. No. 146089. December 13, 2001]

VIRGINIA GOCHAN, LOUISE GOCHAN,

LAPU-LAPU
REAL
ESTATE
CORPORATION, FELIX GOCHAN AND
SONS
REALTY
CORPORATION,
MACTAN REALTY DEVELOPMENT
CORPORATION, petitioners,
vs.
MERCEDES
GOCHAN,
ALFREDO
GOCHAN,
ANGELINA
GOCHANHERNAEZ, MA. MERCED GOCHAN
GOROSPE, CRISPO GOCHAN, JR., and
MARLON GOCHAN, respondents.

and the Order dated 14 November 2002 denying the

motion for reconsideration are hereby AFFIRMED. With
costs.
SO ORDERED.
Austria-Martinez,
JJ., concur.

(Acting

Chairman), and Callejo,

Puno, (Chairman), J., on official leave.

Tinga, J., on leave.

DECISION
YNARES-SANTIAGO, J.:

This is a petition for review seeking to set aside the

decision of the Court of Appeals dated September 10, 1999 in
CA-G.R. SP No. 49084,[1] as well as its Resolution[2] dated
November 22, 2000, denying the Motion for Reconsideration.
Respondents were stockholders of the Felix Gochan and
Sons Realty Corporation and the Mactan Realty Development
Corporation. Sometime in 1996, respondents offered to sell
their shares in the two corporations to the individual
petitioners, the heirs of the late Ambassador Esteban Gochan,
for
and
in
consideration
of
the
sum
of
P200,000,000.00. Petitioners accepted and paid the said
amount to respondents. Accordingly, respondents issued to

petitioners the necessary Receipts.[3] In addition, respondents

executed their respective Release, Waiver and Quitclaim,
[4]
wherein they undertook that they would not initiate any suit,
action or complaint against petitioners for whatever reason or
purpose.
In turn, respondents, through Crispo Gochan, Jr., required
individual petitioners to execute a promissory note,
[5]
undertaking not to divulge the actual consideration they paid
for the shares of stock. For this purpose, Crispo Gochan, Jr.
drafted a document entitled promissory note in his own
handwriting and had the same signed by Felix Gochan, III,
Louise Gochan and Esteban Gochan, Jr.
Unbeknown to petitioners, Crispo Gochan, Jr. inserted in
the promissory note a phrase that says, Said amount is in partial
consideration of the sale.[6]
On April 3, 1998, respondents filed a complaint against
petitioners for specific performance and damages with the
Regional Trial Court of Cebu City, Branch 11, docketed as
Civil Case No. CEB-21854.Respondents alleged that sometime
in November 1996, petitioner Louise Gochan, on behalf of all
the petitioners, offered to buy their shares of stock, consisting
of 254 shares in the Felix Gochan and Sons Realty Corporation
and 1,624 shares of stock in the Mactan Realty Development
Corporation; and that they executed a Provisional
Memorandum of Agreement, wherein they enumerated the
following as consideration for the sale:

1. Pesos: Two Hundred Million Pesos (P200M)

2. Two (2) hectares more or less of the fishpond in Gochan
compound, Mabolo, Lot 4F-2-B
3. Lot 2, Block 9 with an area of 999 square meters in
Gochan Compound, Mabolo, Cebu
4. Three Thousand (3,000) square meters of Villas
Magallanes in Mactan, Cebu

5. Lot 423 New Gem Building with an area of 605

square meters.[7]
Accordingly, respondents claimed that they are entitled to
the conveyance of the aforementioned properties, in addition to
the amount of P200,000,000.00, which they acknowledge to
have received from petitioners. Further, respondents prayed for
moral damages of P15,000,000.00, exemplary damages of
P2,000,000.00, attorneys fees of P14,000,000.00, and litigation
expenses of P2,000,000.00.
Petitioners filed their answer, raising the following
affirmative defenses: (a) lack of jurisdiction by the trial court
for non-payment of the correct docket fees; (b)
unenforceability of the obligation to convey real properties due
to lack of a written memorandum thereof, pursuant to the
Statute of Frauds; (c) extinguishment of the obligation by
payment; (d) waiver, abandonment and renunciation by

respondent of all their claims against petitioners; and (e) nonjoinder of indispensable parties.
On August 7, 1998, petitioners filed with the trial court a
motion for a preliminary hearing on the affirmative
defenses. In an Order dated August 11, 1998, the trial court
denied the motion, ruling as follows:

As the grant of said motion lies in the discretion of the

court under Section 6 of Rule 16 of the 1997 Rules of
Civil Procedure, this Court in the exercise of its
discretion, hereby denies the said motion because the
matters sought to be preliminarily heard do not appear
to be tenable. For one, the statute of frauds does not
apply in this case because the contract which is the
subject matter of this case is already an executed
contract. The statute of frauds applies only to executory
contracts. According to Dr. Arturo M. Tolentino, a
leading authority in civil law, since the statute of frauds
was enacted for the purpose of preventing frauds, it
should not be made the instrument to further
them. Thus, where one party has performed his
obligation under a contract, equity would agree that all
evidence should be admitted to prove the alleged
agreement (PNB vs. Philippine Vegetable Oil Company,
49 Phil. 897). For another, the contention of the
defendants that the claims of the plaintiffs are already

extinguished by full payment thereof does not appear to

be indubitable because the plaintiffs denied under oath
the due execution and genuineness of the receipts which
are attached as Annexes 1-A, 1-B and 1-C of defendants
answer. This issue therefore has to be determined on the
basis of preponderance of evidence to be adduced by
both parties. Then, still for another, the contention that
the complaint is defective because it allegedly has failed
to implead indispensable parties appears to be wanting
in merit because the parties to the memorandum of
agreement adverted to in the complaint are all parties in
this case. Then the matter of payment of docketing and
filing fees is not a fatal issue in this case because the
record shows that the plaintiffs had paid at least
P165,000.00 plus in the form of filing and docketing
fees. Finally, regarding exerting earnest efforts toward a
compromise by the plaintiffs, the defendants cannot say
that there is an absence of an allegation to this effect in
the complaint because paragraph 11 of the complaint
precisely states that before filing this case, earnest
efforts toward a compromise have been made.
Petitioners motion for reconsideration of the above Order
was denied by the trial court on September 11, 1998.
Petitioners thus filed a petition for certiorari with the Court
of Appeals, docketed as CA-G.R. SP No. 49084. On September

10, 1999, the Court of Appeals rendered the appealed decision

dismissing the petition on the ground that respondent court did
not commit grave abuse of discretion, tantamount to lack or in
excess of jurisdiction in denying the motion to hear the
affirmative defenses.[8]
Again, petitioners filed a motion for reconsideration, but
the same was denied by the Court of Appeals in its assailed
Resolution of November 22, 2000.[9]
Petitioners, thus, brought the present petition for review
anchored on the following grounds:
I.

THE COURT OF APPEALS COMMITTED GRAVE

AND PALPABLE ERROR IN FINDING THAT THE
CORRECT DOCKET FEES HAVE BEEN PAID.
II.

THE COURT OF APPEALS COMMITTED SERIOUS

ERROR IN RULING THAT THE PMOA WAS A
PARTIALLY EXECUTED CONTRACT AND HENCE
NOT COVERED BY THE STATUTE OF FRAUDS.
III.

THE COURT OF APPEALS COMMITTED GRAVE

ERROR IN DECIDING THAT THE CLAIMS OF

PRIVATE RESPONDENTS HAVE NOT BEEN

EXTINGUISHED BY PAYMENT OR FULL
SETTLEMENT DESPITE THE PRESENCE OF
RECEIPTS SIGNED BY THE PRIVATE
RESPONDENTS SHOWING THE CONTRARY.
IV.

THE COURT OF APPEALS COMMITTED GRAVE

ERROR IN RESOLVING THAT FELIX GOCHAN III
AND ESTEBAN GOCHAN, JR. ARE NOT
INDISPENSABLE PARTIES AND THEREFORE
NEED NOT BE IMPLEADED AS PARTIES.[10]
Respondents filed their Comment,[11] arguing, in fine, that
petitioners are guilty of forum-shopping when they filed two
petitions for certiorari with the Court of Appeals; and that the
Court of Appeals did not err in dismissing the petition for
certiorari.
The instant petition has merit.
The rule is well-settled that the court acquires jurisdiction
over any case only upon the payment of the prescribed docket
fees. In the case of Sun Insurance Office, Ltd. (SIOL) v.
Asuncion,[12] this Court 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.

Respondents maintain that they paid the correct docket

fees in the amount of P165,000.00 when they filed the
complaint with the trial court. Petitioners, on the other hand,
contend that the complaint is in the nature of a real action
which affects title to real properties; hence, respondents should
have alleged therein the value of the real properties which shall
be the basis for the assessment of the correct docket fees.
The Court of Appeals found that the complaint was one for
specific performance and incapable of pecuniary
estimation. We do not agree.
It is necessary to determine the true nature of the
complaint in order to resolve the issue of whether or not
respondents paid the correct amount of docket fees therefor. In
this jurisdiction, the dictum adhered to is that the nature of an
action is determined by the allegations in the body of the
pleading or complaint itself, rather than by its title or heading.
[13]
The caption of the complaint below was denominated as one
for specific performance and damages. The relief sought,
however, is the conveyance or transfer of real property, or
ultimately, the execution of deeds of conveyance in their favor
of the real properties enumerated in the provisional
memorandum of agreement. Under these circumstances, the
case below was actually a real action, affecting as it does title
to or possession of real property.
In the case of Hernandez v. Rural Bank of Lucena,[14] this
Court held that a real action is one where the plaintiff seeks the
recovery of real property or, as indicated in section 2(a) of Rule

4 (now Section 1, Rule 4 of the 1997 Rules of Civil Procedure),

a real action is an action affecting title to or recovery of
possession of real property.
It has also been held that where a complaint is entitled as
one for specific performance but nonetheless prays for the
issuance of a deed of sale for a parcel of land, its primary
objective and nature is one to recover the parcel of land itself
and, thus, is deemed a real action. In such a case, the action
must be filed in the proper court where the property is located:

In this Court, the appellant insists that her action is one

for specific performance, and, therefore, personal and
transitory in nature.
This very issue was considered and decided by this
Court in the case of Manuel B. Ruiz vs. J.M. Tuason &
Co., Inc. et al., L-18692, promulgated 31 January
1963. There the Court, by unanimous vote of all the
Justices, held as follows:
This contention has no merit. Although appellants
complaint is entitled to be one for specific performance,
yet the fact that he asked that a deed of sale of a parcel
of land situated in Quezon City be issued in his favor
and that a transfer certificate of title covering said parcel
of land be issued to him shows that the primary
objective and nature of the action is to recover the

parcel of land itself because to execute in favor of

appellant the conveyance requested there is need to
make a finding that he is the owner of the land which in
the last analysis resolves itself into an issue of
ownership. Hence, the action must be commenced in the
province where the property is situated pursuant to
Section 3, Rule 5, of the Rules of Court, which provides
that actions affecting title to or recovery of possession
of real property shall be commenced and tried in the
province where the property or any part thereof lies. [15]
In the case at bar, therefore, the complaint filed with the
trial court was in the nature of a real action, although ostensibly
denominated as one for specific performance. Consequently,
the basis for determining the correct docket fees shall be the
assessed value of the property, or the estimated value thereof as
alleged by the claimant. Rule 141, Section 7, of the Rules of
Court, as amended by A.M. No. 00-2-01-SC, provides:

Section 7. Clerks of Regional Trial Courts. - x x x

(b) xxx
In a real action, the assessed value of the property, or if
there is none, the estimated value thereof shall be
alleged by the claimant and shall be the basis in
computing the fees.

We are not unmindful of our pronouncement in the case

of Sun Insurance,[16] to the effect that in case 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 period. However, the liberal interpretation of the
rules relating to the payment of docket fees as applied in the
case of Sun Insurance cannot apply to the instant case as
respondents have never demonstrated any willingness to abide
by the rules and to pay the correct docket fees. Instead,
respondents have stubbornly insisted that the case they filed
was one for specific performance and damages and that they
actually paid the correct docket fees therefor at the time of the
filing of the complaint. Thus, it was stated in the case of Sun
Insurance:[17]

The principle in Manchester could very well be applied

in the present case. The pattern and the intent to defraud
the government of the docket fee due it is obvious not
only in the filing of the original complaint but also in
the filing of the second amended complaint.
However, in Manchester, petitioner did not pay any
additional docket fee until the case was decided by this
Court on May 7, 1987. Thus, in Manchester, due to the
fraud committed on the government, this Court held that
the court a quo did not acquire jurisdiction over the case
and that the amended complaint could not have been

admitted inasmuch as the original complaint was null

and void.
In the present case, a more liberal interpretation of the
rules is called for considering that, unlike Manchester,
private respondent demonstrated his willingness to
abide by the rules by paying the additional docket fees
as required. The promulgation of the decision
in Manchester must have had that sobering influence on
private respondent who thus paid the additional docket
fee as ordered by the respondent court. It triggered his
change of stance by manifesting his willingness to pay
such additional docket fee as may be ordered.
Respondents accuse petitioners of forum-shopping when
they filed two petitions before the Court of
Appeals. Petitioners, on the other hand, contend that there was
no forum-shopping as there was no identity of issues or identity
of reliefs sought in the two petitions.
We agree with petitioners that they are not guilty of forumshopping. The deplorable practice of forum-shopping is
resorted to by litigants who, for the purpose of obtaining the
same relief, resort to two different fora to increase his or her
chances of obtaining a favorable judgment in either one. In the
case of Golangco v. Court of Appeals,[18] we laid down the
following test to determine whether there is forum-shopping:

Ultimately, what is truly important to consider in

determining whether forum-shopping exists or not is the
vexation caused the courts and the parties-litigant by a
person who asks different courts and/or administrative
agencies to rule on the same or related causes and/or
grant the same or substantially the same reliefs, in the
process creating the possibility of conflicting decisions
being rendered by the different fora upon the same
issues.
In sum, two different orders were questioned, two
distinct causes of action and issues were raised, and two
objectives were sought; thus, forum shopping cannot be
said to exist in the case at bar.
Likewise, we do not find that there is forum-shopping in
the case at bar. The first petition, docketed as CA-G.R. SP. No.
49084, which is now the subject of the instant petition,
involved the propriety of the affirmative defenses relied upon
by petitioners in Civil Case No. CEB-21854. The second
petition, docketed as CA-G.R. SP No. 54985, raised the issue
of whether or not public respondent Judge Dicdican was guilty
of manifest partiality warranting his inhibition from further
hearing Civil Case No. CEB-21854.
More importantly, the two petitions did not seek the same
relief from the Court of Appeals. In CA-G.R. SP. No. 49084,
petitioners prayed, among others, for the annulment of the

orders of the trial court denying their motion for preliminary

hearing on the affirmative defenses in Civil Case No. CEB21854. No such reliefs are involved in the second petition,
where petitioners merely prayed for the issuance of an order
enjoining public respondent Judge Dicdican from further trying
the case and to assign a new judge in his stead.
True, the trial court has the discretion to conduct a
preliminary hearing on affirmative defenses. In the case at bar,
however, the trial court committed a grave abuse of its
discretion when it denied the motion for preliminary
hearing. As we have discussed above, some of these defenses,
which petitioners invoked as grounds for the dismissal of the
action, appeared to be indubitable, contrary to the
pronouncement of the trial court. Indeed, the abuse of
discretion it committed amounted to an evasion of positive
duty or virtual refusal to perform a duty enjoined by law, or to
Republic of the Philippines
SUPREME COURT
Manila

act at all in contemplation of law,[19] which would have

warranted the extraordinary writ of certiorari. Hence, the Court
of Appeals erred when it dismissed the petition for certiorari
filed by petitioners.
WHEREFORE, in view of the foregoing, the instant
petition is GRANTED. This case is REMANDED to the
Regional Trial Court of Cebu City, Branch 11, which is
directed to forthwith conduct the preliminary hearing on the
affirmative defenses in Civil Case No. CEB-21854.
SO ORDERED.
Kapunan, and Pardo, JJ., concur.
Davide, Jr., C.J., (Chairman), see dissenting opinion.
Puno, J., joins the dissent of C.J., Davide, Jr.
CORPORATION, STEPHEN ROXAS, ANDREW LUISON,
GRACE LUISON and JOSE DE MAISIP, respondents.
Tanjuatco, Oreta and Tanjuatco for petitioners.

EN BANC
Pecabar Law Offices for private respondents.
G.R. No. 75919 May 7, 1987
RESOLUTION
MANCHESTER DEVELOPMENT CORPORATION, ET
AL., petitioners,
vs.
COURT OF APPEALS, CITY LAND DEVELOPMENT

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. 2While 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 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 coplaintiff 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

In the present case no such honest difference of opinion was

possible as the allegations of the complaint, the designation
and the prayer show clearly that it is an action for damages
and specific performance. The docketing fee should be
assessed by considering the amount of damages as alleged in
the original complaint.
As reiterated in the Magaspi case the rule is well-settled "that
a case is deemed filed only upon payment of the docket fee
regardless of the actual date of filing in court . 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
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. Nos. 79937-38 February 13, 1989

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.
SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera,
Gutierrez, Jr., Cruz, Paras, Feliciano, Bidin, Sarmiento and
Cortes, JJ., concur.
Paras, J., took no part.
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 reraffled 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 deficiency, to order its payment. The Resolution also
requires all clerks of court to issue certificates of reassessment 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 letter-report 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, judgment is hereby rendered:
1. Denying due course to the petition in CAG.R. SP No. 1, 09715 insofar as it seeks
annulment of the order
(a) denying petitioners' motion to dismiss the
complaint, as amended, and
(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

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, 5wherein this Court held that

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 hereinabove 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 trial court acquired jurisdiction over the case even if the docket
fee paid was insufficient.

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.

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 (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.

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.

In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro

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.

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,

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.
11

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. R11882. 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,

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 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 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 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
Republic of the Philippines
SUPREME COURT
Manila

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, GrioAquino, Medialdea and Regalado, JJ., concur.
EN BANC
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.
Eduardo C. De Vera for petitioners.
RESOLUTION

NARVASA, J.:
In the Regional Trial Court at Tagum, Davao del Norte, 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;
2 ) Actual damages, as proven;
3 ) Moral and nominal damages as the
Honorable Court may fix ;
4) P30,000.00, "as attorney's fees, and
representation fees of P5,000.00 per day of
appearance;" 4
and

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
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 complaints "without prejudice to private respondent
Pineda's re-filing 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 question-indeed, 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, 12or 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.

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, thirdparty 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
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
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 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
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 88421 January 30, 1990
AYALA CORPORATION, LAS PIAS VENTURES, INC., and
FILIPINAS LIFE ASSURANCE COMPANY, INC., petitioners
vs.
THE HONORABLE JOB B. MADAYAG, PRESIDING JUDGE,
REGIONAL TRIAL COURT, NATIONAL CAPITAL JUDICIAL
REGION, BRANCH 145 and THE SPOUSES CAMILO AND
MA. MARLENE SABIO, respondents.
Renato L. De la Fuente for petitioners.
Camilo L. Sabio for private respondents.

amount of each item of damages and accept payment of the

requisite fees therefor within the relevant prescriptive period.
WHEREFORE, the petition is DISMISSED, without
pronouncement as to costs.
Fernan, C.J., Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, GrioAquino, Medialdea and Regalado, JJ., concur.

GANCAYCO, J.:
Once more the issue relating to the payment of filing fees in an
action for specific performance with damages is presented by
this petition for prohibition.
Private respondents filed against petitioners an action for
specific performance with damages in the Regional Trial Court
of Makati. Petitioners filed a motion to dismiss on the ground
that the lower court has not acquired jurisdiction over the case
as private respondents failed to pay the prescribed docket fee
and to specify the amount of exemplary damages both in the
body and prayer of the amended and supplemental complaint.
The trial court denied the motion in an order dated April 5,
1989. A motion for reconsideration filed by petitioners was
likewise denied in an order dated May 18, 1989. Hence this
petition.

The main thrust of the petition is that private respondent paid

only the total amount of P l,616.00 as docket fees instead of
the amount of P13,061.35 based on the assessed value of the
real properties involved as evidenced by its tax declaration.
Further, petitioners contend that private respondents failed to
specify the amount of exemplary damages sought both in the
body and the prayer of the amended and supplemental
complaint.
In Manchester Development Corporation vs. Court of
Appeals 1 a similar case involving an action for specific performance
with damages, this Court held that the docket fee should be
assessed by considering the amount of damages as alleged in the
original complaint.

However, the contention of petitioners is that since the action

concerns real estate, the assessed value thereof should be
considered in computing the fees pursuant to Section 5, Rule
141 of the Rules of Court. Such rule cannot apply to this case
which is an action for specific performance with damages
although it is in relation to a transaction involving real estate.
Pursuant to Manchester, the amount of the docket fees to be
paid should be computed on the basis of the amount of
damages stated in the complaint.
Petitioners also allege that because of the failure of the private
respondents to state the amount of exemplary damages being
sought, the complaint must nevertheless be dismissed in
accordance to Manchester. The trial court denied the motion
stating that the determination of the exemplary damages is
within the sound discretion of the court and that it would be
unwarrantedly presumptuous on the part of the private

respondents to fix the amount of exemplary damages being

prayed for. The trial court cited the subsequent case of Sun
Insurance vs. Judge Asuncion 2 in support of its ruling.
The clarificatory and additional rules laid down in Sun
Insurance are 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 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 tune 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.
Apparently, the trial court misinterpreted paragraph 3 of the
above ruling of this Court wherein it is 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, say for
exemplary or corrective damages, 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.
In the latest case Tacay vs. Regional Trial Court of
Tagum, 3 this Court had occasion to make the clarification that the
phrase "awards of claims not specified in the pleading" refers only to
"damages arising after the filing of the complaint or similar
pleading . . . as to which the additional filing fee therefor shall
constitute a lien on the judgment." The amount of any claim for
damages, therefore, arising on or before the filing of the complaint or
any pleading, should be specified. While it is true that the
determination of certain damages as exemplary or corrective
damages is left to the sound discretion of the court, it is the duty of
the parties claiming such damages to specify the amount sought on
the basis of which the court may make a proper determination, and

for the proper assessment of the appropriate docket fees. The

exception contemplated as to claims not specified or to claims
although specified are left for determination of the court is limited
only to any damages that may arise after the filing of the complaint or
similar pleading for then it will not be possible for the claimant to
specify nor speculate as to the amount thereof.

The amended and supplemental complaint in the present

case, therefore, suffers from the material defect in failing to
state the amount of exemplary damages prayed for.
As ruled in Tacay the trial court may either order said claim to
be expunged from the record as it did not acquire jurisdiction
over the same or on motion, it may allow, within a reasonable
time, the amendment of the amended and supplemental
complaint so as to state the precise amount of the exemplary
damages sought and require the payment of the requisite fees
therefor within the relevant prescriptive period. 4
WHEREFORE, the petition is GRANTED. The trial court is
directed either to expunge from the record the claim for
exemplary damages in the amended and supplemental
complaint, the amount of which is not specified, or it may
otherwise, upon motion, give reasonable time to private
respondents to amend their pleading by specifying its amount
and paying the corresponding docketing fees within the
appropriate reglementary or prescriptive period. No costs.
SO ORDERED.
Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.

THIRD DIVISION

Whats sauce for the goose is sauce for the

gander.
NEGROS ORIENTAL PLANTERS
G.R. No. 179878
ASSOCIATION, INC. (NOPA),
This
is
a
Petition
for
Review
Petitioner,
on Certiorari seeking
the
reversal
of
the
[1]
Present:
Resolutions of the Court of Appeals dated 23 May
2007 and 16 August 2007, respectively, in CA-G.R.
YNARES-SANTIAGO,
SP No. 02651 outrightly dismissing the Petition
- versus Chairperson, for Certiorari filed by petitioner Negros Oriental
AUSTRIA-MARTINEZ,
Planters Association, Inc. (NOPA) against private
CHICO-NAZARIO,
respondent Aniceto Manojo Campos (Campos).
NACHURA, and
REYES, JJ.
On 17 March 1999, Campos filed a Complaint
HON. PRESIDING JUDGE OF
for Breach of Contract with Damages, docketed as
RTC-NEGROS
OCCIDENTAL,
Civil Case No. 99-10773, against NOPA before the
BRANCH
52, BACOLOD CITY,
Regional
Trial
Court
(RTC)
of
Negros
and
ANICETO
Occidental, Bacolod City. According
to
the
MANOJO CAMPOS,
Promulgated: Complaint, Campos and NOPA entered into two
Respondents.
separate contracts denominated as Molasses Sales
December 24,Agreement.Campos
2008
allegedly paid the consideration
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - of the Molasses Sales Agreement in full, but was only
- - - - - - - - - - - - - -x
able to receive a partial delivery of the molasses
because of a disagreement as to the quality of the
products being delivered.
DECISION
On 17 August 2005, more than six years after
NOPA filed its Answer, NOPA filed a Motion to
CHICO-NAZARIO, J.:
Dismiss on the ground of an alleged failure

of Campos to file the correct filing fee. According to

NOPA, Campos deliberately
concealed
in
his
Complaint the exact amount of actual damages by
opting to estimate the value of the unwithdrawn
molasses in order to escape the payment of the proper
docket fees.
On 30 June 2006, the RTC issued an Order
denying the Motion to Dismiss. NOPA received this
Order on 17 July 2006.
On 1 August 2006, NOPA filed a Motion for
Reconsideration of the 30 June 2006 Order. On 5
January 2007, the RTC issued an Order denying
NOPAs Motion for Reconsideration.
On 2 April 2007, NOPA filed a Petition
for Certiorari before the Court of Appeals assailing
the Orders of the RTC dated 30 June 2006 and 5
January 2007.
On 23 May 2007, the Court of Appeals issued
the first assailed Resolution dismissing the Petition
for Certiorari on the following grounds:
1. Failure of the Petitioner to state in its
Verification that the allegations in the petition
are based on authentic records, in violation of
Section 4, Rule 7, of the 1997 Rules of Civil

Procedure, as amended by A.M. No. 00-2-10-SC

(May 1, 2000), which provides:
x x x - A pleading is
verified by an affidavit that the
affiant has read the pleading and
that the allegations therein are
true and correct of his personal
knowledge or based on authentic
records.
A pleading required to be
verified which contains a
verification based on information
and belief, or lacks a proper
verification, shall be treated as
an unsigned pleading.
2. Failure of the petitioner to append to
the petition relevant pleadings and documents,
which would aid in the resolution of the instant
petition, in violation of Section 1, Rule 65 of the
Rules of Court, such as:
a.

Ex-parte Motion to Set the Case for

Pre-Trial dated July 27, 1999;
b. Notice of Pre-Trial;
c. Motion for Leave to File Third Party
Complaint;
d. Orders dated July 31, 2000, March
20 2001, November 17, 2004,
and May 17, 2005, respectively;

e.

Motion to Suspend the Proceedings

dated August 10, 2003;
f. Motion to Dismiss for Failure to
Prosecute; and
g. Motion for Reconsideration to the
Order dated May 12, 2005.
Section 1, Rule 65 of the Rules of Court,
provides:
When any tribunal, board
or officer exercising judicial or
quasi-judicial functions has
acted without or in excess of its
or his jurisdiction, or with grave
abuse of discretion amounting to
lack or excess of jurisdiction,
and there is no appeal, or any
plain, speedy, and adequate
remedy in the ordinary course of
law, a person aggrieved thereby
may file a verified petition in the
proper court, alleging the facts
with certainty and praying that
judgment be rendered annulling
or modifying the proceedings of
such tribunal, board or officer,
and granting such incidental
reliefs as law and justice may
require.
The petition shall be
accompanied by a certified true

copy of the judgment, order or

resolution subject thereof, copies
of all pleadings and documents
relevant and pertinent thereto,
and a sworn certification of nonforum shopping as provided in
the paragraph of section 3, Rule
46.
3. Failure of petitioners counsel to
indicate in the petition his current IBP Official
Receipt Number, in violation of Bar Matter No.
1132 and/or A.M. No. 287, which reads as
follows:
The Court resolved, upon
recommendation of the Office of
the Bar Confidant, to GRANT
the request of the Board of
Governors of the Integrated Bar
of the Philippinesand the
Sanguniang Panlalawigan of
Ilocos Norte to require all
lawyers to indicate their Roll of
Attorneys Number in all papers
or pleadings submitted to the
various judicial or quasi-judicial
bodies in addition to the
requirement of indicating the
current Professional Tax Receipt
(PTR) and the IBP Official
Receipt or Lifetime Member
Number.[2]

On 22 June 2007, NOPA filed a Motion for

Reconsideration of the above Resolution, attaching
thereto an Amended Petition for Certiorari in
compliance with the requirements of the Court of
Appeals deemed to have been violated by NOPA. The
Court of Appeals denied the said Motion in the second
assailed Resolution dated 16 August 2007.
Hence, this Petition for Review on Certiorari,
where NOPA raises the following issue and
arguments:
ISSUE
WHETHER OR NOT THE PUBLIC
RESPONDENT
CA
COMMITTED
REVERSIBLE ERROR WHEN IT RULED
THAT THERE WAS NO SUBSTANTIAL
COMPLIANCE WITH THE PROCEDURAL
REQUIREMENTS
WHEN
PETITIONER
FAILED TO ALLEGE IN ITS VERIFICATION
THAT THE ALLEGATIONS THEREIN ARE
TRUE AND CORRECT OF HIS PERSONAL
KNOWLEDGE OR BASED ON AUTHENTIC
RECORDS AND FAILURE TO ATTACH THE
NECESSARY DOCUMENTS
ON
ITS
PLEADINGS AS REQUIRED BY SECTION 1,
RULE 65 OF THE 1997 RULES OF CIVIL
PROCEDURE.[3]

ARGUMENTS
1. The requirement that a pleading be
verified
is
merely formal
and
not
jurisdictional. The court may give due course to
an unverified pleading where the material facts
alleged are a matter of record and the questions
raised are mainly of law such as in a petition for
certiorari.[4]
2. Petitioner had attached to its Petition
for Certiorari clearly legible and duplicate
original or a certified true copy of the judgment
or final order or resolution of the court a quo
and the requisite number of plain copies thereof
and such material portions of the record as
would support the petition.[5]
3. Substantial compliance of the rules,
which was further supplied by the petitioners
subsequent full compliance demonstrates its
good faith to abide by the procedural
requirements.[6]
4. The resolution of the important
jurisdictional issue raised by the petitioner
before the PUBLIC RESPONDENT CA would
justify a relaxation of the rules.[7]

The original Verification in the original Petition

for Certiorari filed by NOPA states as follows:

1. That I am the President and Chairman

of the Board of Directors of Negros Oriental
Planters Association, Inc. (NOPA), the
petitioner in this case, a domestic corporation
duly organized under Philippine Laws, with
principal place of business at Central Bais, Bais
City, Philippines; that I am duly authorized by
the Board of NOPA (Secretarys Certificate
attached as Annex A) to cause the preparation of
the foregoing petition; and that I hereby affirm
and confirm that all the allegations contained
herein are true and correct to my own
knowledge and belief;[8]

NOPA claims that this Court has in several

cases allowed pleadings with a Verification that
contains the allegation to the best of my knowledge
and the allegation are true and correct, without the
words of his own knowledge, citing Decano v. Edu,
[9]
and Quimpo v. De la Victoria.[10] NOPA claims that
the allegations in these cases constitute substantial
compliance with the Rules of Court, and should
likewise apply to the case at bar.
NOPA is mistaken. NOPA cited cases
promulgated before 1 May 2000, when Section 4 of
Rule 7 was amended by A.M. No. 00-2-10. Before the
amendment, said Section 4 stated:

SEC.
4. Verification.Except when
otherwise specifically required by law or rule,
pleadings need not be under oath, verified or
accompanied by affidavit.
A pleading is verified by an affidavit that
the affiant has read the pleading and that the
allegations therein are true and correct of his
knowledge and belief.

As amended, said Section 4 now states:

SEC.
4. Verification.Except when
otherwise specifically required by law or rule,
pleadings need not be under oath, verified or
accompanied by affidavit.
A pleading is verified by an affidavit that
the affiant has read the pleading and that the
allegations therein are true and correct of his
personal knowledge or based on authentic
records.

Clearly, the amendment was introduced in

order to make the verification requirement stricter,
such that the party cannot now merely state under
oath that he believes the statements made in the
pleading. He cannot even merely state under oath that
he has knowledge that such statements are true and
correct. His knowledge must be specifically alleged

under oath to be either personal knowledge or at

least based on authentic records.
Unlike, however, the requirement for a
Certification against Forum Shopping in Section 5,
wherein failure to comply with the requirements is not
curable by amendment of the complaint or other
initiatory pleading,[11] Section 4 of Rule 7, as
amended, states that the effect of the failure to
properly verify a pleading is that the pleading shall be
treated as unsigned:
A pleading required to be verified
which
contains
a
verification based
on information and belief, or upon knowledge,
information and belief, or lacks a proper
verification, shall be treated as an unsigned
pleading.

Unsigned pleadings are discussed in the

immediately preceding section of Rule 7:
SEC. 3. Signature and address. x x x.
xxxx
An unsigned pleading produces no legal
effect. However, the court may, in its discretion,
allow such deficiency to be remedied if it shall
appear that the same was due to mere

inadvertence and not intended for delay.

Counsel who deliberately files an unsigned
pleading, or signs a pleading in violation of this
Rule, or alleges scandalous or indecent matter
therein, or fails to promptly report to the court a
change of his address, shall be subject to
appropriate disciplinary action. (5a)

A pleading, therefore, wherein the Verification

is merely based on the partys knowledge and
belief produces no legal effect, subject to
the discretion of the court to allow the deficiency to
be remedied. In the case at bar, the Court of Appeals,
in the exercise of this discretion, refused to allow the
deficiency in the Verification to be remedied, by
denying NOPAs Motion for Reconsideration with
attached Amended Petition for Certiorari.
May an appellate court reverse the exercise of
discretion by a lower court? The old case of Lino
Luna v. Arcenas[12] states that it can, but only in
exceptional cases when there is grave abuse of this
discretion or adverse effect on the substantial rights of
a litigant:
Discretionary power is generally
exercised by trial judges in furtherance of the
convenience of the courts and the litigants, the
expedition of business, and in the decision of
interlocutory matters on conflicting facts where

one tribunal could not easily prescribe to

another the appropriate rule of procedure.
The general rule, therefore, and indeed
one of the fundamental principles of appellate
procedure is that decisions of a trial court
which "lie in discretion" will not be reviewed
on appeal, whether the case be civil or
criminal at law or in equity.
We have seen that where such rulings
have to do with minor matters, not affecting the
substantial rights of the parties, the prohibition
of review in appellate proceedings is made
absolute by the express terms of the statute; but
it would be a monstrous travesty on justice to
declare that where the exercise of
discretionary power by an inferior court
affects adversely the substantial legal rights
of a litigant, it is not subject to review on
appeal in any case wherein a clear and
affirmative showing is made of an abuse of
discretion, or of a total lack of its exercise, or
of conduct amounting to an abuse of
discretion, such as its improper exercise under a
misapprehension of the law applicable to the
facts upon which the ruling is based.
In its very nature, the discretionary
control conferred upon the trial judge over the
proceedings had before him implies the absence
of any hard-and-fast rule by which it is to be
exercised, and in accordance with which it may

be reviewed. But the discretion conferred

upon the courts is not a willful, arbitrary,
capricious and uncontrolled discretion. It is a
sound, judicial discretion which should
always be exercised with due regard to the
rights of the parties and the demands of
equity and justice. As was said in the case of
The Styria vs. Morgan (186 U. S., 1, 9): "The
establishment of a clearly defined rule of action
would be the end of discretion, and yet
discretion should not be a word for arbitrary will
or inconsiderate action." So in the case of
Goodwin vs. Prime (92 Me., 355), it was said
that "discretion implies that in the absence of
positive law or fixed rule the judge is to decide
by his view of expediency or by the demands of
equity and justice."
There being no "positive law or fixed
rule" to guide the judge in the court below in
such cases, there is no "positive law or fixed
rule" to guide a court of appeal in reviewing his
action in the premises, and such courts will not
therefore attempt to control the exercise of
discretion by the court below unless it plainly
appears that there was "inconsiderate action" or
the exercise of mere "arbitrary will," or in other
words that his action in the premises amounted
to "an abuse of discretion." But the right of an
appellate court to review judicial acts which lie
in the discretion of inferior courts may properly
be invoked upon a showing of a strong and clear
case of abuse of power to the prejudice of the

appellant, or that the ruling objected to rested on

an erroneous principle of law not vested in
discretion.[13]

The case at bar demonstrates a situation in

which there is no effect on the substantial rights of a
litigant. NOPAs Petition for Certiorari is seeking the
reversal of the Orders of the RTC denying NOPAs
Motion to Dismiss on the ground of failure to pay the
proper docket fees. The alleged deficiency in the
payment of docket fees by Campos, if there is any,
would not inure to the benefit of NOPA.
There is therefore no substantive right that will
be prejudiced by the Court of Appeals exercise of
discretion in the case at bar. While the payment of
docket fees is jurisdictional, it is nevertheless
unmistakably also a technicality. Ironically, in seeking
the leniency of this Court on the basis of substantial
justice, NOPA is ultimately praying for a Writ
of Certiorari enjoining the action for breach of
contract from being decided on the merits. Whats
sauce for the goose is sauce for the gander. A party
cannot expect its opponent to comply with the
technical rules of procedure while, at the same time,
hoping for the relaxation of the technicalities in its
favor.

There was therefore no grave abuse of

discretion on the part of the Court of Appeals
warranting this Courts reversal of the exercise of
discretion by the former. However, even if we decide
to brush aside the lapses in technicalities on the part
of NOPA in its Petition for Certiorari, we
nevertheless find that such Petition would still fail.
NOPA seeks in its Petition for Certiorari for
the application of this Courts ruling in Manchester
Development Corporation v. Court of Appeals,
[14]
wherein we ruled that the court acquires
jurisdiction over any case only upon 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.
In denying[15] NOPAs Motion to Dismiss, the
RTC cited Sun Insurance Office, Ltd. (SIOL) v.
Asuncion,[16] wherein
we modified
our
ruling
in Manchester and decreed that where the initiatory
pleading is not accompanied by the payment of the
docket fee, the court may allow payment of the fee
within a reasonable period of time, but in no case
beyond the applicable prescriptive or reglementary
period. The aforesaid ruling was made on the
justification that, unlike in Manchester, the private

respondent
in Sun
Insurance
Office,
Ltd.
(SIOL) demonstrated his willingness to abide by the
rules by paying the additional docket fees
required. NOPA claims that Sun is not applicable to
the case at bar, since Campos deliberately concealed
his claim for damages in the prayer.

Second,
complainant's
counsel
in Manchester claimed, in the body of the
complaint,
damages
in
the
amount
of P78,750.00 but omitted the same in its prayer
in order to evade the payment of docket fees.
Such fraud-defining circumstance is absent in
the instant petition.

In United Overseas Bank (formerly Westmont

Bank) v. Ros,[17] we discussed how Manchester was
not applicable to said case in view of the lack of
deliberate intent to defraud manifested in the latter:

Finally, when
the
court
took
cognizance of the issue of non-payment of
docket fees in Manchester, the complainant
therein filed an amended complaint, this time
omitting all mention of the amount of
damages being claimed in the body of the
complaint; and when directed by the court to
specify the amount of damages in such
amended complaint, it reduced the same
from P78,750,000.00
to P10,000,000.00,
obviously to avoid payment of the required
docket fee. Again, this patent fraudulent scheme
is wanting in the case at bar.

This Court wonders how the petitioner could

possibly arrive at the conclusion that the private
respondent was moved by fraudulent intent in
omitting the amount of damages claimed in its
Second Amended Complaint, thus placing itself
on the same footing as the complainant
in Manchester, when it is clear that the factual
milieu of the instant case is far from that
of Manchester.
First, the
complainant
in Manchester paid the docket fee only in the
amount of P410.00, notwithstanding its claim
for damages in the amount of P78,750,000.00,
while in the present case, the private
respondent paid P42,000.00 as docket fees
upon filing of the original complaint.

This Court is not inclined to adopt the

petitioner's piecemeal construction of our
rulings in Manchester and Sun Insurance. Its
attempt to strip the said landmark cases of one
or two lines and use them to bolster its
arguments and clothe its position with
jurisprudential blessing must be struck down by
this Court.
All told, the rule is clear and simple. In
case where the party does not deliberately

intend to defraud the court in payment of

docket fees, and manifests its willingness to
abide by the rules by paying additional
docket fees when required by the court, the
liberal
doctrine
enunciated
in Sun
Insurance and not the strict regulations set
in Manchester will apply.

In the case at bar, Campos filed an amount

of P54,898.50 as docket fee, based on the amounts
of P10,000,000.00 representing the value of
unwithdrawn molasses, P100,00.00 as storage
fee, P200,00.00 as moral damages, P100,000.00 as
exemplary damages and P500,000.00 as attorneys
fees. The total amount considered in computing the
docket fee was P10,900,000.00. NOPA alleges
that Campos deliberately omitted a claim for
unrealized profit of P100,000.00 and an excess
amount of storage fee in the amount of P502,875.98
in its prayer and, hence, the amount that should have
been considered in the payment of docket fees
is P11,502,875.98. The amount allegedly deliberately
omitted was therefore only P602,875.98 out
of P11,502,875.98, or merely 5.2% of said alleged
total. Camposs pleadings furthermore evince his
willingness to abide by the rules by paying the
additional docket fees when required by the Court.
Since the circumstances of this case clearly
show that there was no deliberate intent to defraud the

Court in the payment of docket fees, the case

of Sun should be applied, and the Motion to Dismiss
by NOPA should be denied.
WHEREFORE, the Resolutions of the Court
of Appeals dated 23 May 2007 and 16 August 2007,
respectively, in CA-G.R. SP No. 02651, outrightly
dismissing the Petition for Certiorari filed by
petitioner Negros Oriental Planters Association, Inc.
against private respondent Aniceto Manojo Campos,
are AFFIRMED. No costs.
SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice
SECOND DIVISION
[G.R. No. 140954. April 12, 2005]

HEIRS OF BERTULDO[1] 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 ten-year
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.

direct examination. However, on June 24, 1998,

Bertuldo died without completing his evidence.

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 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]

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

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]

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
[7]
construction.

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]

records and the nullification of all court

proceedings taken for failure to pay the correct
docket fees, nonetheless, held:

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]

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
reinstatement[12] but on March 22, 1999, the trial
court issued the first assailed Order reinstating the
case.[13]

On January 21, 1999, the trial court, while

ordering the complaint to be expunged from the

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]

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 verified; and that such new
document is deemed waived in the light of Section
1, Rule 9[17] 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
opposition[20] 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 reconsideration[23] 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]
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 overcrowding 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. Romulo[33] on citizens right to
bear arms; (b) Government of the United States of
America vs. Purganan[34] on bail in extradition
proceedings; (c) Commission on Elections vs.
Quijano-Padilla[35] on government contract involving
modernization and computerization of voters
registration list; (d) Buklod ng Kawaning EIIB vs.
Zamora[36] on status and existence of a public
office; and (e) Fortich vs. Corona[37] 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.
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. Asuncion[45] 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 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
fees 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.

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 non-payment 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 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 3 [53] 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
[54]
representative of his estate. 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 65[56] 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,
Tinga and Chico-Nazario, JJ., concur.

Sr.,