THIRD DIVISION

 THE HEIRS OF THE LATE RUBEN REINOSO, SR., represented by Ruben Reinoso Jr.,

Petitioners,  

- versus -  

 COURT OF APPEALS, PONCIANO TAPALES, JOSE GUBALLA, and FILWRITERS GUARANTY ASSURANCE CORPORATION,* *

Respondent.

  G.R. No. 116121 Present: CARPIO,* J.VELASCO, JR., Chairperson,PERALTA,ABAD, andMENDOZA, JJ.    Promulgated: July 18, 2011

 

x -------------------------------------------------------------------------------------xDECISION

 MENDOZA, J.: 

Before the Court is a petition for review assailing the May 20, 1994 Decision [1] and June 30, 1994 Resolution[2] of the Court

of Appeals (CA), in CA-G.R. CV No. 19395, which set aside the March 22, 1988 Decision of the Regional Trial Court, Branch 8,

Manila (RTC) for non-payment of docket fees. The dispositive portion of the CA decision reads:IN VIEW OF ALL THE FOREGOING, the decision appealed from is SET ASIDE and

REVERSED and the complaint in this case is ordered DISMISSED. No costs pronouncement. SO ORDERED.

 

The complaint for damages arose from the collision of a passenger jeepney and a truck at around 7:00 oclock in the evening of June

14, 1979 along E. Rodriguez Avenue, Quezon City. As a result, a passenger of the jeepney, Ruben Reinoso, Sr. (Reinoso), was

killed. The passenger jeepney was owned by Ponciano Tapales (Tapales)and driven by Alejandro Santos (Santos), while the truck

was owned by Jose Guballa (Guballa) and driven by Mariano Geronimo (Geronimo). 

On November 7, 1979, the heirs of Reinoso (petitioners) filed a complaint for damages against Tapales and Guballa. In

turn, Guballa filed a third party complaint against Filwriters Guaranty Assurance Corporation (FGAC) under Policy Number OV-

09527. 

On March 22, 1988, the RTC rendered a decision in favor of the petitioners and against Guballa. The decision in part,

reads: 

In favor of herein plaintiffs and against defendant Jose Guballa: 

1. For the death of Ruben Reinoso, Sr. ₱30,000.00

2. Loss of earnings (monthly income at the time of death (₱2,000.00 Court used ₱1,000.00 only per month (or ₱12,000.00 only per year) & victim then being 55 at death had ten (10) years life expectancy 

120,000.00

3. Mortuary, Medical & funeral expenses and all incidental expenses in the wake in serving those who condoled..

15,000.00

4. Moral damages .. 50,000.00

5. Exemplary damages 25,000.00 

6. Litigation expenses . 15,000.00

7. Attorneys fees 25,000.00

Or a total of ₱250,000.00For damages to property: 

In favor of defendant Ponciano Tapales and against defendant Jose Guballa: 

1. Actual damages for repair is already awarded to defendant-cross-claimant Ponciano Tapales by Br. 9, RTC-Malolos, Bulacan (Vide: Exh. 1-G-Tapales); hence, cannot recover twice.

 

2. Compensatory damages (earnings at ₱150.00 per day) and for two (2) months jeepney stayed at the repair shop.

₱9,000.00

3. Moral damages ... 10,000.00

4. Exemplary damages . 10,000.00

5. Attorneys fees 15,000.00

 or a total of ₱44,000.00 Under the 3rd party complaint against 3rd party defendant Filwriters Guaranty Assurance Corporation, the Court hereby renders judgment in favor of said 3rd party plaintiff by way of 3rd party liability under policy No. OV-09527 in the amount of ₱50,000.00 undertaking plus ₱10,000.00 as and for attorneys fees. For all the foregoing, it is the well considered view of the Court that plaintiffs, defendant Ponciano Tapales and 3rd Party plaintiff Jose Guballa established their claims as specified above, respectively. Totality of evidence preponderance in their favor. J U D G M E N T WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows: In favor of plaintiffs for the death of Ruben Reinoso, Sr.₱250,000.00; 

In favor of defendant Ponciano Tapales due to damage of his passenger jeepney.₱44,000.00; In favor of defendant Jose Guballa under Policy No. OV-09527....₱60,000.00; All the specified accounts with 6% legal rate of interest per annum from date of complaint until fully

paid (Reformina vs. Tomol, 139 SCRA 260; and finally; Costs of suit. SO ORDERED.[3]

  

On appeal, the CA, in its Decision dated May 20, 1994, set aside and reversed the RTC decision and dismissed the complaint on the

ground of non-payment of docket fees pursuant to the doctrine laid down in Manchesterv. CA.[4] In addition, the CA ruled that since

prescription had set in, petitioners could no longer pay the required docket fees.[5]

 

Petitioners filed a motion for reconsideration of the CA decision but it was denied in a resolution dated  June 30, 1994.[6] Hence, this

appeal, anchored on the following

 

GROUNDS:

 A. The Court of Appeals MISAPPLIED THE RULING of the Supreme Court in the case ofManchester Corporation vs. Court of Appeals to this case. B. The issue on the specification of the damages appearing in the prayer of the Complaint was NEVER PLACED IN ISSUE BY ANY OF THE PARTIES IN THE COURT OF ORIGIN (REGIONAL TRIAL COURT) NOR IN THE COURT OF APPEALS. C. The issues of the case revolve around the more substantial issue as to the negligence of the private respondents and their culpability to petitioners.[7]

The petitioners argue that the ruling in Manchester should not have been applied retroactively in this case, since it was filed

prior to the promulgation of the Manchester decision in 1987. They plead that though this Court stated that failure to state the

correct amount of damages would lead to the dismissal of the complaint, said doctrine should be applied prospectively.

 

Moreover, the petitioners assert that at the time of the filing of the complaint in 1979, they were not certain of the amount of

damages they were entitled to, because the amount of the lost income would still be finally determined in the course of the trial of

the case. They claim that the jurisdiction of the trial court remains even if there was failure to pay the correct filing fee as long as the

correct amount would be paid subsequently.

 

Finally, the petitioners stress that the alleged defect was never put in issue either in the RTC or in the CA.

 

The Court finds merit in the petition.

 

The rule is that payment in full of the docket fees within the prescribed period is mandatory.[8] In Manchester v. Court of Appeals,

[9] it was held that a court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. The strict

application of this rule was, however, relaxed two (2) years after in the case ofSun Insurance Office, Ltd. v. Asuncion,[10] wherein the

Court 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. This ruling

was made on the premise that the plaintiff had demonstrated his willingness to abide by the rules by paying the additional docket

fees required.[11] Thus, in the more recent case of United Overseas Bank v. Ros,[12] the Court explained that 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 Office, Ltd., and not the strict

regulations set in Manchester, will apply. It has been on record that the Court, in several instances, allowed the relaxation of the rule

on non-payment of docket fees in order to afford the parties the opportunity to fully ventilate their cases on the merits.In the case

of La Salette College v. Pilotin,[13] the Court stated: 

Notwithstanding the mandatory nature of the requirement of payment of appellate docket fees, we also recognize that its strict application is qualified by the following: first, failure to pay those fees within the reglementary period allows only discretionary, not automatic, dismissal; second, such power should be used by the court in conjunction with its exercise of sound discretion in accordance with the tenets of justice and fair play, as well as with a great deal of circumspection in consideration of all attendant circumstances.[14]

 

 

While there is a crying need to unclog court dockets on the one hand, there is, on the other, a greater demand for resolving

genuine disputes fairly and equitably,[15] for it is far better to dispose of a case on the merit which is a primordial end, rather than on

a technicality that may result in injustice.

 

In this case, it cannot be denied that the case was litigated before the RTC and said trial court had already rendered a

decision. While it was at that level, the matter of non-payment of docket fees was never an issue. It was only the CA which  motu

propio dismissed the case for said reason.

Considering the foregoing, there is a need to suspend the strict application of the rules so that the petitioners would be able

to fully and finally prosecute their claim on the merits at the appellate level rather than fail to secure justice on a technicality,  for,

indeed, the general objective of procedure is to facilitate the application of justice to the rival claims of contending parties, bearing

always in mind that procedure is not to hinder but to promote the administration of justice.[16]

 

The Court also takes into account the fact that the case was filed before the Manchester ruling came out. Even if said ruling

could be applied retroactively, liberality should be accorded to the petitioners in view of the recency then of the ruling. Leniency

because of recency was applied to the cases of Far Eastern Shipping Company v. Court of Appeals[17] and Spouses Jimmy and Patri

Chan v. RTC of Zamboanga.[18] In the case ofMactan Cebu International Airport Authority v. Mangubat (Mactan),[19] it was stated

that the intent of the Court is clear to afford litigants full opportunity to comply with the new rules and to temper enforcement of

sanctions in view of the recency of the changes introduced by the new rules. In Mactan, the Office of the Solicitor

General (OSG) also failed to pay the correct docket fees on time.

 

We held in another case: 

x x x It bears stressing that the rules of procedure are merely tools designed to facilitate the attainment of justice. They were conceived and promulgated to effectively aid the court in the dispensation of justice. Courts are not slaves to or robots of technical rules, shorn of judicial discretion. In rendering justice, courts have always been, as they ought to be, conscientiously guided by the norm that, on the balance, technicalities take a backseat against substantive rights, and not the other way around. Thus, if the application of the Rules would tend to frustrate rather than promote justice, it is always within the power of the Court to suspend the Rules, or except a particular case from its operation.[20]

  

The petitioners, however, are liable for the difference between the actual fees paid and the correct payable docket fees to be

assessed by the clerk of court which shall constitute a lien on the judgment pursuant to Section 2 of Rule 141 which provides: SEC. 2. Fees in lien. Where the court in its final judgment awards a claim not

alleged, or a relief different from, or more than that claimed in the pleading, the party concerned shall pay the additional fees which shall constitute a lien on the judgment in satisfaction of said lien. The clerk of court shall assess and collect the corresponding fees. 

As the Court has taken the position that it would be grossly unjust if petitioners claim would be dismissed on a strict

application of the Manchester doctrine, the appropriate action, under ordinary circumstances, would be for the Court to remand the

case to the CA. Considering, however, that the case at bench has been pending for more than 30 years and the records thereof are

already before this Court, a remand of the case to the CA would only unnecessarily prolong its resolution. In the higher interest of

substantial justice and to spare the parties from further delay, the Court will resolve the case on the merits.

 

The facts are beyond dispute. Reinoso, the jeepney passenger, died as a result of the collision of ajeepney and a truck

on June 14, 1979 at around 7:00 oclock in the evening along E. Rodriguez Avenue,Quezon City. It was established that the primary

cause of the injury or damage was the negligence of the truck driver who was driving it at a very fast pace. Based on the sketch and

spot report of the police authorities and the narration of the jeepney driver and his passengers, the collision was brought about

because the truck driver suddenly swerved to, and encroached on, the left side portion of the road in an attempt to avoid a wooden

barricade, hitting the passenger jeepney as a consequence. The analysis of the RTC appears in its decision as follows:Perusal and careful analysis of evidence adduced as well as proper consideration

of all the circumstances and factors bearing on the issue as to who is responsible for the instant vehicular mishap convince and persuade this Court that preponderance of proof is in favor of plaintiffs and defendant Ponciano Tapales. The greater mass of evidence spread on the records and its influence support plaintiffs plaint including that of defendant Tapales.

The Land Transportation and Traffic Rule (R.A. No. 4136), reads as follows:Sec. 37. Driving on right side of highway. Unless a different course of

action is required in the interest of the safety and the security of life, person or property, or because of unreasonable difficulty of operation in compliance therewith, every person operating a motor vehicle or an animal drawn vehicle on highway shall pass to the right when meeting persons or vehicles coming toward him, and to the left when overtaking persons or vehicles going the same direction, and when turning to the left in going from one highway to another, every vehicle shall be conducted to the right of the center of the intersection of the highway.

Having in mind the foregoing provision of law, this Court is convinced of the veracity of the version of the passenger jeepney driver Alejandro Santos, (plaintiffs and Tapales witness) that while running on lane No. 4 westward bound towards Ortigas Avenue at between 30-40 kms. per hour (63-64 tsn, Jan. 6, 1984) the sand & gravel truck from the opposite direction driven by Mariano Geronimo, the headlights of which the former had seen while still at a distance of about 30-40 meters from the wooden barricade astride lanes 1 and 2, upon reaching said wooden block suddenly swerved to the left into lanes 3 and 4 at high speed napakabilis po ng dating ng truck. (29 tsn,  Sept. 26, 1985) in the process hitting them (Jeepney passenger) at the left side up to where the reserve tire was in an oblique manner pahilis (57 tsn, Sept. 26, 1985). The jeepney after it was bumped by the truck due to the strong impact was thrown resting on its right side while the left side was on top of the Bangketa (side walk). The passengers of the jeepney and its driver were injured including two passengers who died. The left side of the jeepney suffered considerable damage as seen in the picture (Exhs. 4 & 5-Tapales, pages 331-332, records) taken while at the repair shop.

The Court is convinced of the narration of Santos to the effect that the gravel & sand truck was running in high speed on the good portion of E. Rodriguez Avenue (lane 1 & 2) before the wooden barricade and (having in mind that it had just delivered its load at the Corinthian Gardens) so that when suddenly confronted with the wooden obstacle before it had to avoid the same in a manner of a reflex reaction or knee-jerk response by forthwith swerving to his left into the right lanes (lanes 3 & 4). At the time of the bumping, the jeepney was running on its right lane No. 4 and even during the moments before said bumping, moving at moderate speed thereon since lane No. 3 was then somewhat rough because being repaired also according to Mondalia who has no reason to prevaricate being herself one of those seriously injured. The narration of Santos and Mondalia are convincing and consistent in depicting the true facts of the case untainted by vacillation and therefore, worthy to be relied upon. Their story is forfeited and confirmed by the sketch drawn by the investigating officer Pfc. F. Amaba, Traffic Division, NPD, Quezon City who rushed to the scene of the mishap (Vide: Resolution of Asst fiscal Elizabeth B. Reyes marked as Exhs. 7, 7-A, 7-B-Tapales, pp. 166-168, records; the Certified Copy found on pages 598-600, ibid, with the attached police

sketch of Pfc. Amaba, marked as Exh. 8-Tapales on page 169, ibid; certified copy of which is on page 594, ibid) indicating the fact that the bumping indeed occurred at lane No. 4 and showing how the gavel & sand truck is positioned in relation to the jeepney. The said police sketch having been made right after the accident is a piece of evidence worthy to be relied upon showing the true facts of the bumping-occurrence. The rule that official duty had been performed (Sec.5(m), R-131, and also Sec. 38, R-a30, Rev. Rules of Court) there being no evidence adduced and made of record to the contrary is that said circumstance involving the two vehicles had been the result of an official investigation and must be taken as true by this Court.[21]

 

While ending up on the opposite lane is not conclusive proof of fault in automobile collisions, [22] the position of the two

vehicles, as depicted in the sketch of the police officers, clearly shows that it was the truck that hit the  jeepney. The evidentiary

records disclosed that the truck was speeding along E. Rodriguez, heading towards Santolan Street, while the passenger jeepney was

coming from the opposite direction. When the truck reached a certain point near the Meralco Post No. J9-450,  the front portion of

the truck hit the left middle side portion of the passenger jeepney, causing damage to both vehicles and injuries to the driver and

passengers of the jeepney. The truck driver should have been more careful, because, at that time, a portion of  E. Rodriguez

Avenue was under repair and a wooden barricade was placed in the middle thereof.

The Court likewise sustains the finding of the RTC that the truck owner, Guballa, failed to rebut the presumption of

negligence in the hiring and supervision of his employee. Article 2176, in relation to Article 2180 of the Civil Code, provides: Art. 2176. Whoever by act or omission causes damage to another, there being

fault or negligence is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

 xxxx

     Art. 2180. The obligation imposed by Art. 2176 is demandable not only for ones

own acts or omissions but also for those of persons for whom one is responsible.                   xxxx 

    Employers shall be liable for the damage caused by their employees and household helpers acting within the scope of their assigned tasks even though the former are not engaged in any business or industry.

      xxxxThe responsibility treated of in this article shall cease when the persons herein

mentioned prove that they observed all the diligence of a good father of a family to prevent damage.

 

  Whenever an employees negligence causes damage or injury to another, there instantly arises a presumption juris tantum that the

employer failed to exercise diligentissimi patris families in the selection or supervision of his employee.[23] Thus, in the selection of

prospective employees, employers are required to examine them as to their qualification, experience and service record.  With

respect to the supervision of employees, employers must formulate standard operating procedures, monitor their implementation,

and impose disciplinary measures for breaches thereof.  These facts must be shown by concrete proof, including documentary

evidence.[24] Thus, the RTC committed no error in finding that the evidence presented by respondent Guballa was wanting. It ruled:x x x. As expected, defendant Jose Guballa, attempted to overthrow this

presumption of negligence by showing that he had exercised the due diligence required of him by seeing to it that the driver must check the vital parts of the vehicle he is assigned to before he leaves the compound like the oil, water, brakes, gasoline, horn (9 tsn, July 17, 1986); and that Geronimo had been driving for him sometime in 1976 until the collision in litigation came about (5-6 tsn, ibid); that whenever his trucks gets out of the compound to make deliveries, it is always accompanied with two (2) helpers (16-17 tsn, ibid). This was all which he considered as selection and supervision in compliance

with the law to free himself from any responsibility. This Court then cannot consider the foregoing as equivalent to an exercise of all the care of a good father of a family in the selection and supervision of his driver Mariano Geronimo.[25]http://sc.judiciary.gov.ph/jurisprudence/2005/dec2005/146635.htm - _ftn45

 

WHEREFORE, the petition is GRANTED. The May 20, 1994 Decision and June 30, 1994 Resolution of the Court of

Appeals are REVERSED and SET ASIDE and the March 22, 1988 Decision of the Regional Trial Court, Branch 8, Manila,

is REINSTATED. 

SO ORDERED.

 

 JOSE CATRAL MENDOZAAssociate Justice

WE CONCUR:

ANTONIO T. CARPIOAssociate Justice

    PRESBITERO J. VELASCO, JR. DIOSDADO M. PERALTAAssociate Justice Associate JusticeChairperson    

ROBERTO A. ABADAssociate Justice

 A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.  PRESBITERO J. VELASCO, JR.

Associate JusticeChairperson, Third Division 

C E R T I F I C A T I O NPursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons Attestation, I certify that the

conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. RENATO C. CORONAChief Justice

SECOND DIVISION  DO-ALL METALS INDUSTRIES, G.R. No. 176339INC., SPS. DOMINGO LIM andLELY KUNG LIM,Petitioners, Present:CARPIO, J., Chairperson,- versus - NACHURA,

PERALTA,BERSAMIN,* andABAD, JJ.

SECURITY BANK CORP.,TITOLAIDO E. PAYONGAYONG,EVYLENE C. SISON, PHIL.INDUSTRIAL SECURITY Promulgated:AGENCY CORP. and GIL SILOS,

Respondents. January 10, 2011 x --------------------------------------------------------------------------------------- x 

DECISION ABAD, J.:

 

This case is about the propriety of awarding damages based on claims embodied in the plaintiffs supplemental complaint

filed without prior payment of the corresponding filing fees.

 

The Facts and the Case

 

From 1996 to 1997, Dragon Lady Industries, Inc., owned by petitioner spouses Domingo Lim and Lely Kung Lim (the

Lims) took out loans from respondent Security Bank Corporation (the Bank) that totaledP92,454,776.45. Unable to pay the loans on

time, the Lims assigned some of their real properties to the Bank to secure the same, including a building and the lot on which it

stands (the property), located at M. de Leon St., Santolan, Pasig City.[1]

 

In 1998 the Bank offered to lease the property to the Lims through petitioner Do-All Metals Industries, Inc. (DMI)

primarily for business although the Lims were to use part of the property as their residence.  DMI and the Bank executed a two-year

lease contract from October 1, 1998 to September 30, 2000 but the Bank retained the right to pre-terminate the lease.  The contract

also provided that, should the Bank decide to sell the property, DMI shall have the right of first refusal.

 

On December 3, 1999, before the lease was up, the Bank gave notice to DMI that it was pre-terminating the lease on

December 31, 1999. Wanting to exercise its right of first refusal, DMI tried to negotiate with the Bank the terms of its

purchase. DMI offered to pay the Bank P8 million for the property but the latter rejected the offer, suggesting P15 million

instead. DMI made a second offer of P10 million but the Bank declined the same.

 

While the negotiations were on going, the Lims claimed that they continued to use the property in their business.  But the

Bank posted at the place private security guards from Philippine Industrial Security Agency (PISA). The Lims also claimed that on

several occasions in 2000, the guards, on instructions of the Bank representatives Titolaido Payongayong and Evylene Sison,

padlocked the entrances to the place and barred the Lims as well as DMIs employees from entering the property.  One of the guards

even pointed his gun at one employee and shots were fired. Because of this, DMI was unable to close several projects and contracts

with prospective clients. Further, the Lims alleged that they were unable to retrieve assorted furniture, equipment, and personal

items left at the property.

 

The Lims eventually filed a complaint with the Regional Trial Court (RTC) of Pasig City for damages with prayer for the

issuance of a temporary restraining order (TRO) or preliminary injunction against the Bank and its co-defendants Payongayong,

Sison, PISA, and Gil Silos.[2] Answering the complaint, the Bank pointed out that the lease contract allowed it to sell the property at

any time provided only that it gave DMI the right of first refusal. DMI had seven days from notice to exercise its option. On

September 10, 1999 the Bank gave notice to DMI that it intended to sell the property to a third party.  DMI asked for an extension of

its option to buy and the Bank granted it. But the parties could not agree on a purchase price. The Bank required DMI to vacate and

turnover the property but it failed to do so. As a result, the Banks buyer backed-out of the sale.Despite what happened, the Bank and

DMI continued negotiations for the purchase of the leased premises but they came to no agreement.

 

The Bank denied, on the other hand, that its guards harassed DMI and the Lims.  To protect its property, the Bank began

posting guards at the building even before it leased the same to DMI. Indeed, this arrangement benefited both parties. The Bank

alleged that in October of 2000, when the parties could not come to an agreement regarding the purchase of the property, DMI

vacated the same and peacefully turned over possession to the Bank.

 

The Bank offered no objection to the issuance of a TRO since it claimed that it never prevented DMI or its employees from

entering or leaving the building. For this reason, the RTC directed the Bank to allow DMI and the Lims to enter the building and get

the things they left there. The latter claimed, however, that on entering the building, they were unable to find the movable properties

they left there. In a supplemental complaint, DMI and the Lims alleged that the Bank surreptitiously took such properties, resulting

in additional actual damages to them of over P27 million.

 

The RTC set the pre-trial in the case for December 4, 2001. On that date, however, counsel for the Bank moved to reset the

proceeding. The court denied the motion and allowed DMI and the Lims to present their evidence  ex parte. The court eventually

reconsidered its order but only after the plaintiffs had already presented their evidence and were about to rest their case.  The RTC

declined to recall the plaintiffs witnesses for cross- examination but allowed the Bank to present its evidence. [3] This prompted the

Bank to seek relief from the Court of Appeals (CA) and eventually from this Court but to no avail.[4]

 

During its turn at the trial, the Bank got to present only defendant Payongayong, a bank officer.  For repeatedly canceling

the hearings and incurring delays, the RTC declared the Bank to have forfeited its right to present additional evidence and deemed

the case submitted for decision.

 

On September 30, 2004 the RTC rendered a decision in favor of DMI and the Lims. It ordered the Bank to pay the

plaintiffs P27,974,564.00 as actual damages, P500,000.00 as moral damages, P500,000 as exemplary damages, and P100,000.00 as

attorneys fees. But the court absolved defendants Payongayong, Sison, Silos and PISA of any liability.

 

The Bank moved for reconsideration of the decision, questioning among other things the RTCs authority to grant damages

considering plaintiffs failure to pay the filing fees on their supplemental complaint.  The RTC denied the motion. On appeal to the

CA, the latter found for the Bank, reversed the RTC decision, and dismissed the complaint as well as the counterclaims. [5] DMI and

the Lims filed a motion for reconsideration but the CA denied the same, hence this petition.

 

The Issues Presented

 

The issues presented in this case are:

 1. Whether or not the RTC acquired jurisdiction to hear and adjudicate plaintiffs supplemental complaint against the Bank considering their failure to pay the filing fees on the amounts of damages they claim in it;

 2. Whether or not the Bank is liable for the intimidation and harassment committed against DMI and its representatives;

and 

3. Whether or not the Bank is liable to DMI and the Lims for the machineries, equipment, and other properties they allegedly lost after they were barred from the property.

 

The Courts Rulings

 

One. On the issue of jurisdiction, respondent Bank argues that plaintiffs failure to pay the filing fees on their supplemental

complaint is fatal to their action.

 

But what the plaintiffs failed to pay was merely the filing fees for their Supplemental Complaint.  The RTC acquired

jurisdiction over plaintiffs action from the moment they filed their original complaint accompanied by the payment of the filing fees

due on the same. The plaintiffs non-payment of the additional filing fees due on their additional claims did not divest the RTC of the

jurisdiction it already had over the case.[6]

 

Two. As to the claim that Banks representatives and retained guards harassed and intimidated DMIs employees and the

Lims, the RTC found ample proof of such wrongdoings and accordingly awarded damages to the plaintiffs.  But the CA disagreed,

discounting the testimony of the police officers regarding their investigations of the incidents since such officers were not present

when they happened. The CA may be correct in a way but the plaintiffs presented eyewitnesses who testified out of personal

knowledge. The police officers testified merely to point out that there had been trouble at the place and their investigations yielded

their findings.

 

The Bank belittles the testimonies of the petitioners witnesses for having been presented ex parte before the clerk of

court. But the ex parte hearing, having been properly authorized, cannot be assailed as less credible.  It was the Banks fault that it

was unable to attend the hearing. It cannot profit from its lack of diligence.

 

Domingo Lim and some employees of DMI testified regarding the Bank guards unmitigated use of their superior strength

and firepower. Their testimonies were never refuted. Police Inspector Priscillo dela Paz testified that he responded to several

complaints regarding shooting incidents at the leased premises and on one occasion, he found Domingo Lim was locked in the

building. When he asked why Lim had been locked in, a Bank representative told him that they had instructions to prevent anyone

from taking any property out of the premises. It was only after Dela Paz talked to the Bank representative that they let Lim out.[7]

 

Payongayong, the Banks sole witness, denied charges of harassment against the Banks representatives and the guards.  But

his denial came merely from reports relayed to him. They were not based on personal knowledge.

 

While the lease may have already lapsed, the Bank had no business harassing and intimidating the Lims and their

employees. The RTC was therefore correct in adjudging moral damages, exemplary damages, and attorneys fees against the Bank

for the acts of their representatives and building guards.

 

Three. As to the damages that plaintiffs claim under their supplemental complaint, their stand is that the RTC committed

no error in admitting the complaint even if they had not paid the filing fees due on it since such fees constituted a lien anyway on the

judgment award. But this after-judgment lien, which implies that payment depends on a successful execution of the judgment,

applies to cases where the filing fees were incorrectly assessed or paid or where the court has discretion to fix the amount of the

award.[8] None of these circumstances obtain in this case.

 

Here, the supplemental complaint specified from the beginning the actual damages that the plaintiffs sought against the

Bank. Still plaintiffs paid no filing fees on the same. And, while petitioners claim that they were willing to pay the additional fees,

they gave no reason for their omission nor offered to pay the same.They merely said that they did not yet pay the fees because the

RTC had not assessed them for it. But a supplemental complaint is like any complaint and the rule is that the filing fees due on a

complaint need to be paid upon its filing.[9] The rules do not require the court to make special assessments in cases of supplemental

complaints.

 

To aggravate plaintiffs omission, although the Bank brought up the question of their failure to pay additional filing fees in

its motion for reconsideration, plaintiffs made no effort to make at least a late payment before the case could be submitted for

decision, assuming of course that the prescription of their action had not then set it in. Clearly, plaintiffs have no excuse for their

continuous failure to pay the fees they owed the court.Consequently, the trial court should have treated their Supplemental

Complaint as not filed.

 

Plaintiffs of course point out that the Bank itself raised the issue of non-payment of additional filing fees only after the

RTC had rendered its decision in the case. The implication is that the Bank should be deemed to have waived its objection to such

omission. But it is not for a party to the case or even for the trial court to waive the payment of the additional filing fees due on the

supplemental complaint. Only the Supreme Court can grant exemptions to the payment of the fees due the courts and these

exemptions are embodied in its rules.

 

Besides, as correctly pointed out by the CA, plaintiffs had the burden of proving that the movable properties in question

had remained in the premises and that the bank was responsible for their loss. The only evidence offered to prove the loss was

Domingo Lims testimony and some undated and unsigned inventories.These were self-serving and uncorroborated.

 

WHEREFORE, the Court PARTIALLY GRANTS the petition and REINSTATES with modification the decision of

the Regional Trial Court of Pasig City in Civil Case 68184. The Court DIRECTS respondent Security Bank Corporation to pay

petitioners DMI and spouses Domingo and Lely Kung Lim damages in the following amounts: P500,000.00 as moral

damages, P500,000.00 as exemplary damages, and P100,000.00 for attorneys fees. The Court DELETES the award of actual

damages of P27,974,564.00.

 

SO ORDERED.  

ROBERTO A. ABADAssociate JusticeWE CONCUR:    

ANTONIO T. CARPIOAssociate Justice

  

  

ANTONIO EDUARDO B. NACHURA DIOSDADO M. PERALTAAssociate Justice Associate Justice    

LUCAS P. BERSAMIN

Associate Justice   

ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.   ANTONIO T. CARPIO

Associate JusticeChairperson, Second Division

   

CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution and the Division Chairpersons Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.   RENATO C. CORONA

Chief Justice

   

Republic of the PhilippinesSupreme Court

Manila 

FIRST DIVISION 

SAMUEL JULIAN, represented by his   G.R. No. 174193

Attorney-in-Fact, ROBERTO DELA    

CRUZ,    

Petitioner,   Present:

     

    CORONA, C.J., Chairperson,

- versus -   LEONARDO-DE CASTRO,

    BERSAMIN,

    DEL CASTILLO, and

DEVELOPMENT BANK OF THE   VILLARAMA, JR., JJ.

PHILIPPINES and THE CITY    

SHERIFF,   Promulgated:

Respondents.   December 7, 2011

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x  

D E C I S I O N  

DEL CASTILLO, J.: 

The requirement of an appeal fee is not a mere technicality of law or procedure and should not be disregarded without the most

compelling of reasons.

 

Before us is a Petition for Review on Certiorari[1] of the Resolution[2] of the Court of Appeals (CA) in CA-G.R. CV No. 00240 dated

April 12, 2005 which dismissed petitioners appeal as follows:

 Considering that per JRD Report dated March 30, 2005, the appellant failed to pay the required docket and other

lawful fees, the instant Appeal is hereby DISMISSED pursuant to Section [1](c) Rule 50 of the 1997 Rules of Civil Procedure. SO ORDERED.[3]

Also assailed is the CAs Resolution[4] dated July 27, 2006 which denied the Motion for Reconsideration thereto.

 

Petitioner seeks to reverse the aforesaid Resolutions of the CA and direct the latter to admit the payment for the docket fees enclosed in his Motion

for Reconsideration[5] so that his appeal may be given due course, or, in the alternative, to remand the case to the court  a quo for further

proceedings.

 

Factual Antecedents

 

This case stemmed from a Real Estate Mortgage[6] executed by Thelma Julian (Thelma), mother of herein petitioner Samuel Julian, over

a property situated in Fuentes Subdivision, Roxas City covered by Transfer Certificate of Title (TCT) No. T-16705.[7]

 

On December 23, 1980,[8] Thelma obtained a housing loan from respondent Development Bank of the Philippines (DBP) in the amount

of P99,400.00.[9] To secure payment of the loan, she executed in favor of the respondent a Real Estate Mortgage on the aforementioned parcel of

land registered under her name. A Special Power of Attorney (SPA) appointing the respondent and its personnel to sell the property in the event of

extrajudicial foreclosure was inserted and made an integral part of the mortgage contract.[10]

 

Subsequently, Thelma died on January 8, 1982.[11]

 

Because of arrearages in the monthly amortizations, respondent foreclosed

the mortgaged property. Same was sold at public auction on September 15, 1983[12] with respondent as the highest bidder.[13] No redemption

having been made, title to the property was consolidated in favor of the respondent on September 21, 1984 [14] and TCT No. T-19303[15] was

thereafter issued in its name.

 

Thereafter, the actual occupants of the mortgaged property, spouses Ramon de la Cruz and his wife, who is likewise petitioners sibling,

Ruth Julian de la Cruz (spouses De la Cruz), offered to purchase the property. Respondent accepted the offer and executed a Deed of Conditional

Sale[16] on October 31, 1985. However, spouses De la Cruz failed to pay[17] 72 monthly amortizations resulting in the rescission of the said deed on

February 28, 1992.Notwithstanding, spouses De la Cruz refused to vacate the premises compelling respondent to file an Unlawful Detainer case

against them on February 23, 1993. Judgment was rendered in favor of respondent on July 29, 1993.[18]

 

However, before the Writ of Execution could be carried out,[19] petitioner filed Civil Case No. 6387[20] before the Regional Trial Court

(RTC) of Roxas City on October 27, 1993,[21] for the cancellation of respondents TCT No. T-19303. He contended that the SPA which was used

to sell the mortgaged property at public auction in 1983 was no longer effective in view of Thelmas death in 1982.  Consequently, the public

auction, the resulting Deed of Sale,[22]Affidavit of Consolidation and TCT No. T-19303 are null and void. During the course of the proceedings, a series of postponements[23] were

made at the instance of both parties due to an impending amicable settlement. Eventually, the parties were able to reach a settlement. Thus, in an

Order[24] dated October 28, 1998, the RTC directed both parties to submit a joint motion to dismiss the case. However, almost two years passed

without the parties complying with the said Order.

 

Consequently, in an Order[25] dated October 11, 2000, the RTC dismissed the case for failure of the parties to comply for an unreasonable

length of time. The dismissal, however, was set aside in an Order[26] dated February 12, 2003 in consideration of petitioners payment of ten percent

(10%) of respondents claim. The parties were then given 15 days from notice within which to submit their compromise agreement,[27] which was

subsequently extended for 30 days from notice.[28] Despite the extensions, however, no compromise agreement was filed in court. As a result, in an

Order[29] dated July 24, 2003, the trial court directed the parties to show cause within 15 days from notice why the case should not be dismissed for

failure to prosecute. Meanwhile, with petitioners conformity, his counsel withdrew her appearance on August 13, 2003.[30]

 

Ruling of the Regional Trial Court

 

On January 28, 2004 or six months from the issuance of the show cause Order, the trial court dismissed the case in an Order [31] which

states:

 For failure of the parties thru counsel to comply with the Order dated July 24, 2003, the instant case is hereby

DISMISSED. SO ORDERED.

  

Petitioner, through his new counsel, timely filed a Notice of Appeal[32] on April 26, 2004 but failed to pay the docket and other lawful

fees.

 

Ruling of the Court of Appeals

 

As earlier mentioned, the CA dismissed the appeal for non-payment of the required docket and other lawful fees pursuant to Section

1(c), Rule 50 of the Rules of Court.[33]

Seeking reconsideration,[34] petitioner attached to his motion Postal Money Order Nos. A-0620000276, B-0610000283 and J-065000566

in the aggregate amount of P3,020.00[35] as payment for the docket fees. He explained that his failure to pay the required fees was due to oversight

and non-cognizance of the necessity to pay the said fees since his counsel did not inform him of such requirement to pay. Petitioner prayed for

liberal application of the Rules as according to him, a strict enforcement would be tantamount to imposing a penalty not commensurate to his

thoughtlessness or oversight in not adhering to the procedural requisite.[36]

 

Petitioners submission did not move the CA, which disposed of his motion for reconsideration through its second assailed Resolution[37] thus:

 In the case of Meatmaster International Corporation vs. Lelis Integrated Development Corporation, it was held that

the payment of docket fees within the prescribed period is mandatory for the perfection of an appeal. This is so because a court acquires jurisdiction over the subject matter of the action only upon the payment of the correct amount of docket fees regardless of the actual date of filing of the case in court. The payment of the full amount of the docket fee is sine qua non for the perfection of an appeal. The court acquires jurisdiction over the case only upon the payment of the prescribed docket fees. Verily, the requirement of an appeal fee is not a mere technicality of law or procedure but an essential requirement without which the decision appealed from would become final and executory as if no appeal was filed at all. Thus, if We allow belated payment as prayed for and reinstate the instant appeal, it will have the effect of withholding the finality of the judgment or order appealed from. Procedural rules are not to be belittled or dismissed simply because their non-observance may have resulted in prejudice to a partys substantive rights. Like all rules, they are required to be followed except only for the most persuasive of reasons when they may be relaxed to relieve a litigant of an injustice not proportionate with the degree of his thoughtlessness in not complying with the procedure prescribed. 

In his Motion for Reconsideration, appellant has not shown weighty and persuasive reasons to compel Us to exercise Our discretion of suspending the strict adherence to the Rules. Other than his flimsy excuse that the ground in the Courts Resolution is merely technical, appellant has miserably failed to proffer a convincing justification for [his] procedural error. Thus, appellant failed to justify why the Rules should be relaxed and [why] the equitable consideration of the Court should be exercised in his situation as an exception to the strict implementation of the Rules. IN VIEW THEREOF, the Motion for Reconsideration is hereby DENIED and the Resolution dated April 12, 2005 MAINTAINED. SO ORDERED.[38]

  

Issues

 

Petitioner comes before this Court by way of Petition for Review on Certiorari raising the following issues:

 A.

WHETHER X X X THE DISMISSAL OF THE TRIAL COURT [WAS] PROPER. 

B.WHETHER X X X THE COURT OF APPEALS ERRED IN APPLYING STRICTLY THE RULES ON DOCKET FEES.[39]

  

The pivotal issue is whether the CA was correct in strictly applying the rules on the payment of docket fees.

 

Petitioner acknowledges the mandatory nature of the rule that docket and other lawful fees must be paid in full within the prescribed period for an

appeal to be perfected. However, he asserts that the broader interest of justice and the desired objective of deciding the case on the merits call for

leniency in the application of the rules. Hence, he must be given an opportunity to air his cause without the constraints of technicalities. Petitioner

contends that the CA should apply the pronouncement of this Court in Yambao v. Court of Appeals[40] relaxing the policy of strict adherence to the

rule regarding appeal fees if justifiable reason for the non-payment of the correct amount of docket fees within the prescribed period is shown.  He

further contends that his act of attaching the payment for the fees to his Motion for Reconsideration shows his intention and willingness to comply

with the rules.

 

Our Ruling

 

The petition lacks merit.

 Payment of full docket fees within the prescribed period for taking an appeal is mandatory.

  

It is well-established that [t]he right to appeal is a statutory privilege and must be exercised only in the manner and in accordance with

the provisions of the law.[41] Thus, one who seeks to avail of the right to appeal must strictly comply with the requirements of the rules, and failure

to do so leads to the loss of the right to appeal.[42]

The applicable rule for appeals from judgments issued by the RTC in the exercise of its original jurisdiction is Rule 41 of the Rules of

Court, Section 4 of which provides:

 Section 4. Appellate court docket and other lawful fees. - Within the period for taking an appeal, the appellant shall

pay to the clerk of the court which rendered the judgment or final order appealed from, the full amount of the appellate court docket and other lawful fees. Proof of payment of said fees shall be transmitted to the appellate court together with the original record or the record on appeal.  

The Rules also provide that failure of the appellant to pay the docket and other lawful fees is a ground for dismissal of the appeal.[43]

 

The Court has consistently ruled in a number of cases that the payment of the full amount of docket fees within the prescribed period is

both mandatory and jurisdictional.[44] It is a condition sine qua non for the appeal to be perfected and only then can a court acquire jurisdiction over

the case.[45] The requirement of an appeal fee is not a mere technicality of law or procedure and should not be undermined except for the most

persuasive of reasons. Non-observance would be tantamount to no appeal being filed thereby rendering the challenged decision, resolution or

order final and executory.

 

Admittedly, this rule is not without recognized qualifications. The Court has declared that in appealed cases, failure to pay the appellate

court docket fee within the prescribed period warrants only discretionary as opposed to automatic dismissal of the appeal and that the court shall

exercise its power to dismiss in accordance with the tenets of justice and fair play and with great deal of circumspection considering all attendant

circumstances.[46]

In the case at bench, the justifications presented by petitioner for the non-payment of the docket fees are oversight and the lack of advice from his

counsel. Unfortunately, the reasons presented are neither convincing nor adequate to merit leniency.  Petitioner submits that he only found out

about the requirement to pay the docket fees when he received the CA Resolution denying his appeal on April 22, 2005 or three days short of one

year from filing of the said appeal. This Court finds this not to be logically true to human experience. It is unusual for petitioners counsel not to

advice him of the required docket fees. More often than not, counsels are aware of the docket fees required to be paid to the courts, and will ask

clients for the said amount prior to filing pleadings in court. This is so because counsels are not expected to shoulder or advance payment for their

clients. Assuming arguendo that petitioners counsel did not inform him of the requirement to pay the docket fees to perfect the appeal, what we

find incredible is that petitioner apparently failed to communicate with his counsel after the filing of said appeal. This Court has repeatedly held

that litigants, represented by counsel, should not expect that all they need to do is sit back, relax and await the outcome of their case. [47] It is the duty

of a party-litigant to be in contact with his counsel from time to time in order to be informed of the progress of his case. [48] Moreover, the counsels

negligence binds petitioner and, for that reason alone the loss of his remedy was caused by his own negligence.[49] Consequently, a relaxation of the

rule cannot be granted.[50] The bitter consequence of such grave inadvertence is to render the trial courts order final and executory.[51]

 

Further, the Court notes that petitioner only attempted to perfect his appeal on May 6, 2005 by appending the postal money orders to his Motion

for Reconsideration, or one year and nine days too late.[52] By that time, the challenged

 

Order has long become final and no longer open to an appeal.[53]

 

Petitioners reliance on the policy espoused in the case of Yambao[54] is likewise unavailing. The pertinent portion relied on by petitioner reads:

 Thus, the appellate court may extend the time for the payment of the docket fees if appellant is able to show that there is a justifiable reason for his failure to pay the correct amount of docket fees within the prescribed period, like fraud, accident, mistake, excusable negligence, or a similar supervening casualty, without fault on the part of the appellant. x x x [55](Emphasis supplied.)

  

Clearly, the case applies to a situation where payment of the docket fees was made albeit incomplete. In the instant case, no payment was made by

petitioner at all. Even assuming arguendo that Yambao is applicable to petitioners case, still, the Court sees no justifiable reason to allow this

Court to relax the strict application of the Rules.

 

Likewise assuming for the sake of argument that consideration be given to petitioners willingness to comply with the rules since he attached postal

money orders to his motion for reconsideration, the broader interest of justice will still not be served if petitioners appeal is reinstated.  On one

hand, petitioner calls for leniency to enable him to establish his case.On the other hand is respondent, which has been embroiled in a decades-long

waiting game. The long-running dispute could be recapped thus: (1) petitioners predecessor-in-interest, Thelma, obtained a loan from respondent

secured by a Real Estate Mortgage on the subject property; (2) Thelma was unable to pay the loan thereby causing foreclosure of the Real Estate

Mortgage; (3) petitioner filed his civil action to question the validity of the public auction sale only on October 27, 1993 or 10 years after the sale

was conducted; and, (4) from the time of the consolidation of title in the name of respondent in 1984 until the present, spouses De la Cruz have

been in possession of the foreclosed property.

Petitioner and his sister Ruth Julian de la Cruz (Ruth) know that their mother Thelma has already lost ownership rights to the property in question

when the latter defaulted in her payment to respondent and none of her successors-in-interest redeemed the property within the prescribed

period. This is the reason why Ruth and her husband offered to purchase the property from respondent. However, when the said spouses De la

Cruz defaulted in their payment, they refused to surrender the property to respondent. For his part, petitioner reinforces such refusal to surrender by

questioning the validity of the public auction sale.

 

Now petitioner comes before this Court praying for leniency in the interest of justice. It must be stressed, however, that it is only when persuasive

reasons exist that the Rules may be relaxed to spare a litigant of an injustice not commensurate with his failure to comply with the prescribed

procedure.[56] Here, the Court finds that petitioner is under no threat of suffering an injustice. On the contrary, it will be the height of injustice if the

Court accords petitioner leniency and reinstates his appeal as this would mean further waiting on the part of the respondent which has long been

deprived of its right to possess the property it owns.

 

WHEREFORE, the petition is DENIED. The Resolutions of the Court of Appeals in CA-G.R. CV No. 00240 dated April 12, 2005 and July 27,

2006 are AFFIRMED.

 SO ORDERED.

  

 MARIANO C. DEL CASTILLO

Associate Justice 

  WE CONCUR:

   

RENATO C. CORONAChief JusticeChairperson

   

TERESITA J. LEONARDO-DE CASTROAssociate Justice

LUCAS P. BERSAMINAssociate Justice

   

MARTIN S. VILLARAMA, JR.Associate Justice

     

C E R T I F I C A T I O N 

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

   

RENATO C. CORONAChief Justice