Duero vs. CA 373 SCRA

Facts:

According to petitioner, respondent Eradel, entered and occupied his land. As shown in the tax declaration, the land had an assessed value of P5,240. When petitioner politely informed private respondent that the land was his and requested the latter to vacate the land, private respondent refused, but instead threatened him with bodily harm. Despite repeated demands, private respondent remained steadfast in his refusal to leave the land.

Petitioner filed before the RTC a complaint for Recovery of Possession and Ownership against Eradel and two others. A compromise agreement was reached by petitioner and the defendants except Eradel. Consequently, Eradel failed to file his Answer and was declared in default. Petitioner presented his evidence ex parte and judgment was rendered in his favour.

Private respondent filed a Motion for New Trial, alleging that he has been occupying the land as a tenant of Artemio Laurente, Sr., since 1958. He explained that he turned over the complaint and summons to Laurente in the honest belief that as landlord, the latter had a better right to the land and was responsible to defend any adverse claim on it. However, the trial court denied the motion for new trial. Private respondent filed before the RTC a Petition for Relief from Judgment, reiterating the same allegation in his Motion for New Trial. He averred that unless there is a determination on who owned the land, he could not be made to vacate the land. He also averred that the judgment of the trial court was void inasmuch as the heirs of Artemio Laurente, Sr., who are indispensable parties, were not impleaded.

The trial court issued an order denying the Petition for Relief from Judgment. In a Motion for Reconsideration of said order, private respondent alleged that the RTC had no jurisdiction over the case, since the value of the land was only P5,240 and therefore it was under the jurisdiction of the municipal trial court. The trial court denied the MR.

Petitioner filed a motion for execution which was granted. Petitioner filed a petition for certiorari with CA. The CA granted the petition and declared that the RTC did not have jurisdiction over the action.

Issue:

Whether the Court of Appeals gravely abused its discretion when it held that the municipal trial court had jurisdiction, and that private respondent was not estopped from assailing the jurisdiction of the RTC after he had filed several motions before it.

Held:

No. In the present case, private respondent questions the jurisdiction of RTC in Tandag, Surigao del Sur, on legal grounds. Recall that it was petitioner who filed the complaint against private respondent and two other parties before the said court,16 believing that the RTC had jurisdiction over his complaint. But by then, Republic Act 769117 amending BP 129 had become effective, such that jurisdiction already belongs not to the RTC but to the MTC pursuant to said amendment. Private respondent, an unschooled farmer, in the mistaken belief that since he was merely a tenant of the late Artemio Laurente Sr., his landlord, gave the summons to a Hipolito Laurente, one of the surviving heirs of Artemio Sr., who did not do anything about the summons. For failure to answer the complaint, private respondent was declared in default. He then filed a Motion for New Trial in the same court and explained that he defaulted because of his belief that the suit ought to be answered by his landlord. In that motion he stated that he had by then the evidence to prove that he had a better right than petitioner over the land because of his long, continuous and uninterrupted possession as bona-fide tenant-lessee of the land.18But his motion was denied. He tried an alternative recourse. He filed before the RTC a Motion for Relief from Judgment. Again, the same court denied his motion, hence he moved for reconsideration of the denial. In his Motion for Reconsideration, he raised for the first time the RTC's lack of jurisdiction. This motion was again denied. Note that private respondent raised the issue of lack of jurisdiction, not when the case was already on appeal, but when the case, was still before the RTC that ruled him in default, denied his motion for new trial as well as for relief from judgment, and denied likewise his two motions for reconsideration. After the RTC still refused to reconsider the denial of private respondent's motion for relief from judgment, it went on to issue the order for entry of judgment and a writ of execution.

Under these circumstances, we could not fault the Court of Appeals in overruling the RTC and in holding that private respondent was not estopped from questioning the jurisdiction of the regional trial court. The fundamental rule is that, the lack of jurisdiction of the court over an action cannot be waived by the parties, or even cured by their silence, acquiescence or even by their express consent.19 Further, a party may assail the jurisdiction of the court over the action at any stage of the proceedings and even on appeal.20 The appellate court did not err in saying that the RTC should have declared itself barren of jurisdiction over the action. Even if private respondent actively participated in the proceedings before said court, the doctrine of estoppel cannot still be properly invoked against him because the question of lack of jurisdiction may be raised at anytime and at any stage of the action.21 Precedents tell us that as a general rule, the jurisdiction of a court is not a question of acquiescence as a matter of fact, but an issue of conferment as a matter of law.22 Also, neither waiver nor estoppel shall apply to confer jurisdiction upon a court, barring highly meritorious and exceptional circumstances.

Donato vs. CA 417 SCRA

Facts:

Petitioner file a complaint for FE and UD against against 43 named defendants and all unknown occupants of his land in San Andres, Manila. He alleged that private respondents had oral contracts of lease that expired at the end of each month but were impliedly renewed under the same terms by mere acquiescence or tolerance; sometime in 1992, they stopped paying rent. Demand letters were sent but were left unanswered.

20 of the 43 defendants filed a consolidated answer. They contend that they cannot be evicted because the Urban Land Reform Law guarantees security of tenure and priority right to purchase the subject property; and that there was a negotiation for the purchase of the lots occupied by them but when the negotiation reached a passive stage, they decided to continue payment of rentals and tendered payment to petitioners counsel and thereafter initiated a petition for consignation while they await the outcome of the negotiation to purchase.

The METC renderer judgment against the 23 defendants who failed to answer, ordering them to vacate the premises occupied by each of them. As to 20 private respondents, the MeTC issued a separate judgment[on the same day sustaining their rights under the Land Reform Law, declaring petitioners cause of action as not duly warranted by the facts and circumstances of the case and dismissing the case without prejudice.

On appeal, the RTC sustained the METC. Thereafter, the CA dismissed the petition for review because the certification against forum shopping was signed by counsel not the petitioner himself the only annex to the petition is a certified copy of the questioned decision but copies of the pleadings and other material portions of the record as would support the allegations of the petition are not annexed.

Petitioner filed a petition for review under Rule 45 with the SC raising the issue of grave abuse of discretion of the CA when it dismissed its petition on a mere technicality.

Issue:

Whether the proper remedy was filed?

Held:

NO. The proper recourse of an aggrieved party from a decision of the CA is a petition for review on certiorari under Rule 45 of the Rules of Court. However, if the error, subject of the recourse, is one of jurisdiction, or the act complained of was perpetrated by a court with grave abuse of discretion amounting to lack or excess of jurisdiction, the proper remedy available to the aggrieved party is a petition for certiorari under Rule 65 of the said Rules. As enunciated by the Court in Fortich vs. Corona:[19

Anent the first issue, in order to determine whether the recourse of petitioners is proper or not, it is necessary to draw a line between an error of judgment and an error of jurisdiction. An error of judgment is one which the court may commit in the exercise of its jurisdiction, and which error is reviewable only by an appeal. On the other hand, an error of jurisdiction 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. This error is correctible only by the extraordinary writ of certiorari.

Inasmuch as the present petition principally assails the dismissal of the petition on ground of procedural flaws involving the jurisdiction of the court a quo to entertain the petition, it falls within the ambit of a special civil action for certiorari under Rule 65 of the Rules of Court.

Sps. Gonzaga vs. CA 394 SCRA

Facts:

Petitioners bought a parcel of land with Lucky Homes Inc. The lot was known as Lot 19. Said lot was used as security for petitioners housing loan with the SSS. Petitioners then started the construction of their house, not on Lot No. 19 but on Lot No. 18, as private respondent mistakenly identified Lot No. 18 as Lot No. 19. Upon realizing its error, private respondent Lucky Homes, through its general manager, informed petitioners of such mistake but the latter offered to buy Lot No. 18 in order to widen their premises. Thus, petitioners continued with the construction of their house. However, petitioners defaulted in the payment of their housing loan from SSS. Consequently, Lot No. 19 was foreclosed by SSS and petitioners certificate of title was cancelled and a new one was issued in the name of SSS. After Lot No. 19 was foreclosed, petitioners offered to swap Lot Nos. 18 and 19 and demanded from private respondent that their contract of sale be reformed and another deed of sale be executed with respect to Lot No. 18, considering that their house was built therein. However, private respondent refused. This prompted petitioners to file, on June 13, 1996, an action for reformation of contract and damages with the RTC.

The RTC dismissed the complaint. A writ of execution was issued. Petitioners filed an urgent motion to recall writ of execution, alleging that the court a quo had no jurisdiction to try the case as it was vested in the Housing and Land Use Regulatory Board (HLURB). Conformably, petitioners filed a new complaint against private respondent with the HLURB. Likewise, petitioners filed with the Court of Appeals a petition for annulment of judgment, premised on the ground that the trial court had no jurisdiction. The CA denied the petition.

Issue:

Whether or not the petitioners are estopped from questioning the jurisdiction of the trial court?

Held:

Yes. Petitioners claim that the recent decisions of this Court have already abandoned the doctrine laid down in Tijam vs. Sibonghanoy.5 We do not agree. In countless decisions, this Court has consistently held that, while an order or decision rendered without jurisdiction is a total nullity and may be assailed at any stage, active participation in the proceedings in the court which rendered the order or decision will bar such party from attacking its jurisdiction. As we held in the leading case of Tijam vs. Sibonghanoy:

"A party may be estopped or barred from raising a question in different ways and for different reasons. Thus we speak of estoppel in pais, or estoppel by deed or by record, and of estoppel by laches.

"It has been held that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and, after obtaining or failing to obtain such relief, repudiate, or question that same jurisdiction x x x x [T]he question whether the court had jurisdiction either of the subject matter of the action or of the parties was not important in such cases because the party is barred from such conduct not because the judgment or order of the court is valid and conclusive as an adjudication, but for the reason that such a practice can not be tolerated obviously for reasons of public policy."

In the case at bar, it was petitioners themselves who invoked the jurisdiction of the court a quo by instituting an action for reformation of contract against private respondents. It appears that, in the proceedings before the trial court, petitioners vigorously asserted their cause from start to finish. Not even once did petitioners ever raise the issue of the courts jurisdiction during the entire proceedings which lasted for two years. It was only after the trial court rendered its decision and issued a writ of execution against them in 1998 did petitioners first raise the issue of jurisdiction and it was only because said decision was unfavorable to them.

Petitioners thus effectively waived their right to question the courts jurisdiction over the case they themselves filed.Petitioners should bear the consequence of their act. They cannot be allowed to profit from their omission to the damage and prejudice of the private respondent. This Court frowns upon the undesirable practice of a party submitting his case for decision and then accepting the judgment but only if favorable, and attacking it for lack of jurisdiction if not.

Escobal vs. Garchitorena 422 SCRA

Facts:

Petitioner was a member of the Philippine Constabulary. While conducting a surveillance operation on drug trafficking at the Sa Harong Caf Bar and Restaurant, he got involved in a shooting incident which resulted in the death of Rodney Rafael Nueca. An amended information was filed against him for murder with RTC.

He was preventively suspended. During arraignment, he pleaded not guilty. Thereafter, he filed a Motion to Quash the Information alleging that the court martial and not the RTC which has jurisdiction.

The prosecution commenced the presentation of evidence. Petitioner filed a Motion to Dismiss, arguing that since he committed the crime in the performance of his duties, the Sandiganbayan had exclusive jurisdiction over the case. The MTD was denied but a preliminary hearing was ordered to determine whether the offense was committed in relation to his office. The trial court initially ruled in the negative but it reversed such decision. The Information was ordered to be amended and that the records of the case be transmitted to the SB. The Presiding Justice of the SB ordered that the case be returned to the court of origin. It reasoned that under P.D. No. 1606, as amended by R.A. No. 7975, the RTC retained jurisdiction over the case, considering that the petitioner had a salary grade of "23." Petitioner then filed a petition for certiorari assailing the Order of the Presiding Justice of the Sandiganbayan remanding the records of the case to the RTC.

Issue:

Whether or not the Presiding Justice of the Sandiganbayan committed a grave abuse of his discretion amounting to excess or lack of jurisdiction in ordering the remand of the case to the RTC?

Held:

No. Under Section 4(a) of P.D. No. 1606 as amended by P.D. No. 1861, the Sandiganbayan had exclusive jurisdiction in all cases involving the following:

(1) Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII of the Revised Penal Code;

(2) Other offenses or felonies committed by public officers and employees in relation to their office, including those employed in government-owned or controlled corporations, whether simple or complexed with other crimes, where the penalty prescribed by law is higher than prision correccional or imprisonment for six (6) years, or a fine of P6,000.00 .

However, for the Sandiganbayan to have exclusive jurisdiction under the said law over crimes committed by public officers in relation to their office, it is essential that the facts showing the intimate relation between the office of the offender and the discharge of official duties must be alleged in the Information. It is not enough to merely allege in the Information that the crime charged was committed by the offender in relation to his office because that would be a conclusion of law.22 The amended Information filed with the RTC against the petitioner does not contain any allegation showing the intimate relation between his office and the discharge of his duties. Hence, the RTC had jurisdiction over the offense charged when on November 24, 1995, it ordered the re-amendment of the Information to include therein an allegation that the petitioner committed the crime in relation to office. The trial court erred when it ordered the elevation of the records to the Sandiganbayan. It bears stressing that R.A. No. 7975 amending P.D. No. 1606 was already in effect and under Section 2 of the law:

In cases where none of the principal accused are occupying positions corresponding to salary grade "27" or higher, as prescribed in the said Republic Act No. 6758, or PNP officers occupying the rank of superintendent or higher, or their equivalent, exclusive jurisdiction thereof shall be vested in the proper Regional Trial Court, Metropolitan Trial Court, Municipal Trial Court, and Municipal Circuit Trial Court, as the case may be, pursuant to their respective jurisdiction as provided in Batas Pambansa Blg. 129.

Under the law, even if the offender committed the crime charged in relation to his office but occupies a position corresponding to a salary grade below "27," the proper Regional Trial Court or Municipal Trial Court, as the case may be, shall have exclusive jurisdiction over the case. In this case, the petitioner was a Police Senior Inspector, with salary grade "23." He was charged with homicide punishable by reclusion temporal. Hence, the RTC had exclusive jurisdiction over the crime charged conformably to Sections 20 and 32 of Batas Pambansa Blg. 129, as amended by Section 2 of R.A. No. 7691.

The petitioners contention that R.A. No. 7975 should not be applied retroactively has no legal basis. It bears stressing that R.A. No. 7975 is a substantive procedural law which may be applied retroactively.

Liga ng mga Barangay vs. Atienza 420

Facts:

Petitioner is the national organization of all the barangays in the Philippines pursuant to the Local Government Code. The Liga adopted and ratified its own Constitution and By-laws to govern its internal organization.4 Section 1, third paragraph, Article XI of said Constitution and By-Laws states: All other election matters not covered in this Article shall be governed by the "Liga Election Code" or such other rules as may be promulgated by the National Liga Executive Board in conformity with the provisions of existing laws.

By virtue of the above-cited provision, the Liga adopted and ratified its own Election Code.5 Section 1.2, Article I of the Liga Election Code states: . There shall be nationwide synchronized elections for the provincial, metropolitan, and HUC/ICC chapters to be held on the third Monday of the month immediately after the month when the synchronized elections in paragraph 1.1 above was held.

Thereafter, the City Council of Manila enacted Ordinance No. 8039, Series of 2002, providing, among other things, for the election of representatives of the District Chapters in the City Chapter of Manila and setting the elections for both chapters thirty days after the barangay elections. Mayor Atienza signed and approved the assailed city ordinance and issued E.O. No. 11 to implement the same.

Subsequently, petitioners filed a petition for certiorari under Rule 65 directly with the SC seeking nullification of Manila City Ordinance No. 8039, Series of 2002,1 and respondent City Mayors Executive Order No. 011, Series of 2002.

Issue:

Whether the petitioners violated the principle of hierarchy of courts?

Held:

Yes. We have held that this Courts original jurisdiction to issue a writ of certiorari (as well as of prohibition, mandamus, quo warranto, habeas corpus and injunction) is not exclusive, but is concurrent with the Regional Trial Courts and the Court of Appeals in certain cases. As aptly stated in People v. Cuaresma:16

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 therefor0 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 of that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is [an] established policy. It is a policy necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Courts docket.

As we have said in Santiago v. Vasquez,17 the propensity of litigants and lawyers to disregard the hierarchy of courts in our judicial system by seeking relief directly from this Court must be put to a halt for two reasons: (1) it would be an imposition upon the precious time of this Court; and (2) 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.

(Note: the SC likewise held: although the instant petition is styled as a petition for certiorari, in essence, it seeks the declaration by this Court of the unconstitutionality or illegality of the questioned ordinance and executive order. It, thus, partakes of the nature of a petition for declaratory relief over which this Court has only appellate, not original, jurisdiction.14 Section 5, Article VIII of the Constitution provides: Sec. 5. The Supreme Court shall have the following powers:

(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of Court may provide, final judgments and orders of lower courts in:

(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (Italics supplied).

As such, this petition must necessary fail, as this Court does not have original jurisdiction over a petition for declaratory relief even if only questions of law are involved.)

Hannah Serrana vs. SB 542 SCRA

Facts:

Petitioner was appointed as a student regent of UP, to serve a one-year term by President Estrada. She then discussed and proposed to to President Estrada the renovation of Vinzons Hall Annex in UP Diliman.

Thereafter, petitioner and her siblings, registered with the Securities and Exchange Commission the Office of the Student Regent Foundation, Inc. (OSRFI).

President Estrada gave 15million pesos to the OSRFI as financial assistance for the proposed renovation.

The renovation of Vinzons Hall Annex failed to materialize.5 The succeeding student regent, Kristine Clare Bugayong, and Christine Jill De Guzman, Secretary General of the KASAMA sa U.P., a system-wide alliance of student councils within the state university, consequently filed a complaint for Malversation of Public Funds and Property with the Office of the Ombudsman.

The Ombudsman, after due investigation, found probable cause to indict petitioner and her brother Jade Ian D. Serana for estafa.

Petitioner moved to quash the information. She claimed that the Sandiganbayan does not have any jurisdiction over the offense charged or over her person, in her capacity as UP student regent. Also, that she is not a public officer and assuming in arguendo that she was, she did not commit the crime in relation to her office.

Issue:

1. Whether the SB has jurisdiction?

2. Whether petitioner is a public officer?

3. Whether she committed the crime in relation to her office?

Held:

1. Yes. Section 4(B) of P.D. No. 1606 reads:

B. Other offenses or felonies whether simple or complexed with other crimes committed by the public officials and employees mentioned in subsection a of this section in relation to their office.

Evidently, the Sandiganbayan has jurisdiction over other felonies committed by public officials in relation to their office. We see no plausible or sensible reason to exclude estafa as one of the offenses included in Section 4(bB) of P.D. No. 1606. Plainly, estafa is one of those other felonies. The jurisdiction is simply subject to the twin requirements that (a) the offense is committed by public officials and employees mentioned in Section 4(A) of P.D. No. 1606, as amended, and that (b) the offense is committed in relation to their office.

2. Yes. Petitioner claims that she is not a public officer with Salary Grade 27; she is, in fact, a regular tuition fee-paying student. This is likewise bereft of merit. It is not only the salary grade that determines the jurisdiction of the Sandiganbayan. The Sandiganbayan also has jurisdiction over other officers enumerated in P.D. No. 1606. In Geduspan v. People,43 We held that while the first part of Section 4(A) covers only officials with Salary Grade 27 and higher, its second part specifically includes other executive officials whose positions may not be of Salary Grade 27 and higher but who are by express provision of law placed under the jurisdiction of the said court. Petitioner falls under the jurisdiction of the Sandiganbayan as she is placed there by express provision of law.44

Section 4(A)(1)(g) of P.D. No. 1606 explictly vested the Sandiganbayan with jurisdiction over Presidents, directors or trustees, or managers of government-owned or controlled corporations, state universities or educational institutions or foundations. Petitioner falls under this category. As the Sandiganbayan pointed out, the BOR performs functions similar to those of a board of trustees of a non-stock corporation.45 By express mandate of law, petitioner is, indeed, a public officer as contemplated by P.D. No. 1606.

3. Yes. In the case at bench, the information alleged, in no uncertain terms that petitioner, being then a student regent of U.P., "while in the performance of her official functions, committing the offense in relation to her office and taking advantage of her position, with intent to gain, conspiring with her brother, JADE IAN D. SERANA, a private individual, did then and there wilfully, unlawfully and feloniously defraud the government.

(note: according to sir,)

Manila Bankers vs. Ng Kok Wei 418 SCRA

Facts:

Respondent, in a Letter of Intent addressed to Manila Bankers Life Insurance Corporation, Petitioner, expressed his intention to purchase a condominium unit at Valle Verde Terraces. He paid petitioner a reservation fee of P50,000.00 for the purchase of a 46-square meter condominium unit (Unit 703) valued at P860,922.00. Then, respondent paid 90% of the purchase price in the sum of P729,830.00.

Consequently, Petitioner, through its President, Mr. Antonio G. Puyat, executed a Contract to Sell in favor of the respondent. The contract expressly states that the subject condominium unit shall substantially be completed and delivered to the respondent within fifteen (15) months from February 8, 1989 or on May 8, 1990, and that (S)hould there be no substantial completion and fail(ure) to deliver the unit on the date specified, a penalty of 1% of the total amount paid (by respondent) shall be charged against (petitioner).

Petitioner returned to the Philippines on April, 1990 only to find out that the turn-over of the unit was reset to May 31, 1990 because various uncontrollable forces (such as coup d etat attempts, typhoon and steel and cement shortage). Meanwhile, on July 5, 1990, upon receipt of petitioners notice of delivery dated May 31, 1990, respondent again flew back to Manila. He found the unit still uninhabitable for lack of water and electric facilities. Once more, petitioner issued another notice to move-in addressed to its building administrator advising the latter that respondent is scheduled to move in on August 22, 1990.

On October 5, 1990, respondent returned to the Philippines only to find that his condominium unit was still unlivable. Exasperated, he was constrained to send petitioner a letter dated November 21, 1990 demanding payment for the damages he sustained. But petitioner ignored such demand, prompting respondent to file an action for specific performance and damages. Meanwhile, during the pendency of the case, respondent finally accepted the condominium unit and on April 12, 1991, occupied the same. Thus, respondents cause of action has been limited to his claim for damages.

The trial court found petitioner liable for damages. On appeal, the CA affirmed in toto the RTCs decision. A MR was filed but was denied. Hence, this petition for review questioning the jurisdiction of the RTC over the case. Petitioner argues that it is the HLURB which has jurisdiction.

Issue:

Whether the RTC has jurisdiction?

Held:

Here, petitioner failed to raise the question of jurisdiction before the trial court and the Appellate Court. In effect, petitioner confirmed and ratified the trial courts jurisdiction over this case. Certainly, it is now in estoppel and can no longer question the trial courts jurisdiction.

On petitioners claim that it did not incur delay, suffice it to say that this is a factual issue. Time and again, we have ruled that the factual findings of the trial court are given weight when supported by substantial evidence and carries more weight when affirmed by the Court of Appeals.[7 Whether or not petitioner incurred delay and thus, liable to pay damages as a result thereof, are indeed factual questions.

The jurisdiction of this Court in a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, is limited to reviewing only errors of law, not of fact, unless the factual findings being assailed are not supported by evidence on record or the impugned judgment is based on a misapprehension of facts.[8 These exceptions are not present here.

Katon vs. Palanca 437 SCRA

Facts:

Petitioner caused the inspection investigation and survey of lands located in Sombrero Island in Palawan for the purpose of its re-classification from forest to agricultural land and, thereafter for him to apply for a homestead patent. The In, 1965, Director of Lands favourably declared the land as agricultural land.

"Records show that on November 8, 1996, [R]espondent Juan Fresnillo filed a homestead patent application for a portion of the island comprising 8.5 hectares. Records also reveal that [R]espondent Jesus Gapilango filed a homestead application on June 8, 1972. Respondent Manuel Palanca, Jr. was issued Homestead Patent No. 145927 and OCT No. G-7089 on March 3, 19775 with an area of 6.84 hectares of Sombrero Island.

In 1999, Petitioner filed an action seeking to nullify the homestead patents and original certificates of title issued in favor of the respondents covering certain portions of the Sombrero Island as well as the reconveyance of the whole island in his favor. The petitioner claims that he has the exclusive right to file an application for homestead patent over the whole island since it was he who requested for its conversion from forest land to agricultural land.

Respondents filed their Answer with Special and/or Affirmative Defenses and Counterclaim in due time. On June 30, 1999, they also filed a Motion to Dismiss on the ground of the alleged defiance by petitioner of the trial courts Order to amend his Complaint so he could thus effect a substitution by the legal heirs of the deceased, Respondent Gapilango. The Motion to Dismiss was granted by the RTC in its Order dated July 29, 1999. A MR was filed but was denied , for being a third and prohibited motion. In his Petition for Certiorari before the CA, petitioner charged the trial court with grave abuse of discretion on the ground that the denied Motion was his first and only Motion for Reconsideration of the aforesaid Order. The CA dismissed the complaint because of prescription invoking its residual prerogative. Hence, this petition.

Issue:

Is the Court of Appeals correct in invoking its alleged residual prerogative under Section 1, Rule 9 of the 1997 Rules of Civil Procedure in resolving the Petition on an issue not raised in the Petition?

Held:

Yes. Under Section 1 of Rule 9 of the Rules of Court, defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived, except when (1) lack of jurisdiction over the subject matter, (2) litis pendentia, (3) res judicata and (4) prescription are evident from the pleadings or the evidence on record. In the four excepted instances, the court shall motu proprio dismiss the claim or action. In Gumabon v. Larin11 we explained thus:

"x x x [T]he motu proprio dismissal of a case was traditionally limited to instances when the court clearly had no jurisdiction over the subject matter and when the plaintiff did not appear during trial, failed to prosecute his action for an unreasonable length of time or neglected to comply with the rules or with any order of the court. Outside of these instances, any motu proprio dismissal would amount to a violation of the right of the plaintiff to be heard. Except for qualifying and expanding Section 2, Rule 9, and Section 3, Rule 17, of the Revised Rules of Court, the amendatory 1997 Rules of Civil Procedure brought about no radical change. Under the new rules, a court may motu proprio dismiss a claim when it appears from the pleadings or evidence on record that it has no jurisdiction over the subject matter; when there is another cause of action pending between the same parties for the same cause, or where the action is barred by a prior judgment or by statute of limitations. x x x."12 (Italics supplied)

On the other hand, "residual jurisdiction" is embodied in Section 9 of Rule 41 of the Rules of Court. The "residual jurisdiction" of trial courts is available at a stage in which the court is normally deemed to have lost jurisdiction over the case or the subject matter involved in the appeal. This stage is reached upon the perfection of the appeals by the parties or upon the approval of the records on appeal, but prior to the transmittal of the original records or the records on appeal.13 In either instance, the trial court still retains its so-called residual jurisdiction to issue protective orders, approve compromises, permit appeals of indigent litigants, order execution pending appeal, and allow the withdrawal of the appeal.

The CAs motu proprio dismissal of petitioners Complaint could not have been based, therefore, on residual jurisdiction under Rule 41. Undeniably, such order of dismissal was not one for the protection and preservation of the rights of the parties, pending the disposition of the case on appeal. What the CA referred to as residual prerogatives were the general residual powers of the courts to dismiss an action motu proprio upon the grounds mentioned in Section 1 of Rule 9 of the Rules of Court and under authority of Section 2 of Rule 114 of the same rules.

To be sure, the CA had the excepted instances in mind when it dismissed the Complaint motu proprio "on more fundamental grounds directly bearing on the lower courts lack of jurisdiction"15 and for prescription of the action. Indeed, when a court has no jurisdiction over the subject matter, the only power it has is to dismiss the action.

(Note: the action was more of an action for reversion and not annulment of title nor reconveyance; dismissal was proper because, the action being one for reversion, it is only the Sol Gen who can bring said action, thus, the complaint states cause of action)

Rule 1 to 5 (inc. 1991 Revised Rules on Summary Procedure)

Facts:

Respondent FGU Insurance Corporation filed a complaint with the Regional Trial Court of Makati1 alleging that petitioner Evangeline K. Alday owed it P114,650.76, representing unliquidated cash advances, unremitted costs of premiums and other charges incurred by petitioner in the course of her work as an insurance agent for respondent. Petitioner filed her answer and by way of counterclaim, asserted her right for the payment of P104,893.45, representing direct commissions, profit commissions and contingent bonuses earned from 1 July 1986 to 7 December 1986, and for accumulated premium reserves amounting to P500,000.00. In addition, petitioner prayed for attorney's fees, litigation expenses, moral damages and exemplary damages for the allegedly unfounded action filed by respondent.

Respondent filed a motion to dismiss petitioner's counterclaim, contending that the trial court never acquired jurisdiction over the same because of the non-payment of docket fees by petitoner. In response, petitioner asked the trial court to declare her counterclaim as exempt from payment of docket fees since it is compulsory and that respondent be declared in default for having failed to answer such counterclaim.

The trial court9 granted respondent's motion to dismiss petitioner's counterclaim and consequently, denied petitioner's motion. The court found petitioner's counterclaim to be merely permissive in nature and held that petitioner's failure to pay docket fees prevented the court from acquiring jurisdiction over the same.10 The trial court denied petitioner's motion for reconsideration. On appeal, the CA sustained the trial courts decision. A MR was filed but was denied. Hence, this petition for review.

Issue:

Whether the counterclaim is compulsory or permissive?

Held:

Permissive. A compulsory counterclaim is one which, being cognizable by the regular courts of justice, arises out of or is connected with the transaction or occurrence constituting the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.19

In Valencia v. Court of Appeals,20 this Court capsulized the criteria or tests that may be used in determining whether a counterclaim is compulsory or permissive, summarized as follows:

1. Are the issues of fact and law raised by the claim and counterclaim largely the same?

2. Would res judicata bar a subsequent suit on defendant's claim absent the compulsory counterclaim rule?

3. Will substantially the same evidence support or refute plaintiff's claim as well s defendant's counterclaim?

4. Is there any logical relation between the claim and the counterclaim?

Another test, applied in the more recent case of Quintanilla v. Court of Appeals,21 is the "compelling test of compulsoriness" which requires "a logical relationship between the claim and counterclaim, that is, where conducting separate trials of the respective claims of the parties would entail a substantial duplication of effort and time by the parties and the court."

Tested against the abovementioned standards, petitioner's counterclaim for commissions, bonuses, and accumulated premium reserves is merely permissive. The evidence required to prove petitioner's claims differs from that needed to establish respondent's demands for the recovery of cash accountabilities from petitioner, such as cash advances and costs of premiums. The recovery of respondent's claims is not contingent or dependent upon establishing petitioner's counterclaim, such that conducting separate trials will not result in the substantial duplication of the time and effort of the court and the parties. One would search the records in vain for a logical connection between the parties' claims. This conclusion is further reinforced by petitioner's own admissions since she declared in her answer that respondent's cause of action, unlike her own, was not based upon the Special Agent's Contract.23 However, petitioner's claims for damages, allegedly suffered as a result of the filing by respondent of its complaint, are compulsory.24

There is no need for need for petitioner to pay docket fees for her compulsory counterclaim.25 On the other hand, in order for the trial court to acquire jurisdiction over her permissive counterclaim, petitioner is bound to pay the prescribed docket fees.26 The rule on the payment of filing fees has been laid down by the Court in the case of Sun Insurance Office, Ltd. V. Hon. Maximiano Asuncion27-

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.

In Suson, the Court explained that although the payment of the prescribed docket fees is a jurisdictional requirement, its non-payment does not result in the automatic dismissal of the case provided the docket fees are paid within the applicable prescriptive or reglementary period.

Korea Technologies Inc. vs. Lerma

Facts:

Petitioner (KOGIES) is a Korean corporation which is engaged in the supply and installation of Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants, while private respondent Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic corporation.

Petitioner and respondent entered into a contract whereby KOGIES would set up an LPG Cylinder Manufacturing Plant in Carmona, Cavite. The total contract price amounted to USD 1,530,000. Subsequently, the machineries, equipment, and facilities for the manufacture of LPG cylinders were shipped, delivered, and installed in the Carmona plant. For the remaining balance of USD306,000 for the installation and initial operation of the plant, PGSMC issued two postdated checks. When KOGIES deposited the checks, these were dishonored for the reason PAYMENT STOPPED. Thus, on May 8, 1998, KOGIES sent a demand letter[6] to PGSMC threatening criminal action for violation of BP 22 in case of non-payment. On the same date, the wife of PGSMCs President faxed a letter to KOGIES President who was then staying at a Makati City hotel. She complained that not only did KOGIES deliver a different brand of hydraulic press from that agreed upon but it had not delivered several equipment parts already paid for.

PGSMC informed KOGIES that PGSMC was canceling their Contract dated March 5, 1997 on the ground that KOGIES had altered the quantity and lowered the quality of the machineries and equipment it delivered to PGSMC, and that PGSMC would dismantle and transfer the machineries, equipment, and facilities installed in the Carmona plant. Five days later, PGSMC filed before the Office of the Public Prosecutor an Affidavit-Complaint for Estafa. KOGIES wrote PGSMC informing the latter that PGSMC could not unilaterally rescind their contract nor dismantle and transfer the machineries and equipment on mere imagined violations by KOGIES. It also insisted that their disputes should be settled by arbitration as agreed upon in Article 15, the arbitration clause of their contract.

Then, KOGIES instituted an Application for Arbitration before the Korean Commercial Arbitration Board (KCAB) in Seoul, Korea pursuant to Art. 15 of the Contract as amended. Pursuant to the application for arbitration, KOGIES filed a Complaint for Specific Performance before the RTC of Muntinlupa. PGSMC filed its Answer with Compulsory Counterclaim. The petitioner filed a MTD the counterclaim for failing to pay the docket fees. The trial court ruled that payment is unnecessary because the counterclaim of respondent is compulsory in nature. Petitioner elevated the case to the CA via petition for certiorari. The CA affirmed the trial courts decision. Hence, the petition for review.

Issue:

Whether respondent was required to pay docket fees for the counterclaim?

Held:

No. As aptly ruled by the CA, the counterclaims of PGSMC were incorporated in its Answer with Compulsory Counterclaim dated July 17, 1998 in accordance with Section 8 of Rule 11, 1997 Revised Rules of Civil Procedure, the rule that was effective at the time the Answer with Counterclaim was filed. Sec. 8 on existing counterclaim or cross-claim states, A compulsory counterclaim or a cross-claim that a defending party has at the time he files his answer shall be contained therein.On July 17, 1998, at the time PGSMC filed its Answer incorporating its counterclaims against KOGIES, it was not liable to pay filing fees for said counterclaims being compulsory in nature. We stress, however, that effective August 16, 2004 under Sec. 7, Rule 141, as amended by A.M. No. 04-2-04-SC, docket fees are now required to be paid in compulsory counterclaim or cross- claims.

Mercado vs. CA 569 SCRA

Facts:

Mercado had been distributing respondent San Miguel Corporations (SMCs) beer products in Quiapo, Manila since 1967. In 1991, SMC extended to him aP7.5 million credit line allowing him to withdraw goods on credit. To secure his purchases, Mercado assigned three China Banking Corporation (CBC) certificates of deposit amounting toP5 million1to SMC and executed a continuing hold-out agreement stating that Any demand made by [SMC] on [CBC], claiming default on my/our part shall be conclusive on [CBC] and shall serve as absolute authority for [CBC] to encash the [CBC certificates of deposit] in accordance with the third paragraph of this Hold-Out Agreement, whether or not I/we have in fact defaulted on any of my/our obligations with [SMC], it being understood that the issue of whether or not there was factual default must be threshed out solely between me/us and [SMC]

SMC notified CBC that Mercado failed to pay for the items he withdrew on credit. Consequently, citing the continuing hold-out agreement, it asked CBC to release the proceeds of the assigned certificates of deposit. CBC approved SMBs request and informed Mercado.

Mercado filed an action to annul the continuing hold-out agreement and deed of assignment in the RTC of Manila. He claimed that the agreement constitute pactum commisorium which is void. SMC filed its answer with counterclaim against Mercado. It contended that Mercado delivered only two CBC certificates of deposit amounting toP4.5 million5and asserted that the execution of the continuing hold-out agreement and deed of assignment was a recognized business practice. Then, Mercado filed an Urgent Manifestation claiming that he was no longer interested in annulling the continuing hold-out agreement and deed of assignment. The RTC, however, denied the motion.8Instead, it set the case for pre-trial.

The trial court rendered a judgment in favour of SMC. Petitioner appealed to the CA, insisting that Mercado did not default in the payment of his obligations to SMC. The CA, however, affirmed in toto the RTCs decision. Thereafter, Mercado passed away and was substituted by his heirs. Petitioners subsequently filed this petition asserting that the CA erred in affirming the RTC decisionin toto.The said decision was void. SMCs counterclaim was permissive in nature. Inasmuch as SMC did not pay docket fees, the RTC never acquired jurisdiction over the counterclaim.

Issue:

Whether the counterclaim is permissive or compulsory?

Held:

Compulsory. A counterclaim (ora claim which a defending party may have against any party)16may be compulsory17or permissive. A counterclaim that (1) arises out of (or is necessarily connected with) the transaction or occurrence that is the subject matter of the opposing partys claim; (2) falls within the jurisdiction of the court and (3) does not require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction, is compulsory.18Otherwise, a counterclaim is merely permissive.s

When Mercado sought to annul the continuing hold-out agreement and deed of assignment (which he executed as security for his credit purchases), he in effect sought to be freed from them. While he admitted having outstanding obligations, he nevertheless asserted that those were not covered by the assailed accessory contracts. For its part, aside from invoking the validity of the said agreements, SMC therefore sought to collect the payment for the value of goods Mercado purchased on credit. Thus, Mercados complaint and SMCs counterclaim both touched the issues of whether the continuing hold-out agreement and deed of assignment were valid and whether Mercado had outstanding liabilities to SMC. The same evidence would essentially support or refute Mercados claim and SMCs counterclaim.

Based on the foregoing, had these issues been tried separately, the efforts of the RTC and the parties would have had to be duplicated. Clearly, SMCs counterclaim, being logically related to Mercados claim, was compulsory in nature.19Consequently, the payment of docket fees was not necessary for the RTC to acquire jurisdiction over the subject matter.

Proton Pilipinas vs. Banque National de Paris 460 SCRA

Facts:

Proton Pilipinas Corporation (Proton) availed of the credit facilities of herein respondent, Banque Nationale de Paris (BNP). To guarantee the payment of its obligation, its co-petitioners Automotive Corporation Philippines (Automotive), Asea One Corporation (Asea) and Autocorp Group (Autocorp) executed a corporate guarantee2 to the extent of US$2,000,000.00. BNP and Proton subsequently entered into three trust receipt.

Under the terms of the trust receipt agreements, Proton would receive imported passenger motor vehicles and hold them in trust for BNP. Proton would be free to sell the vehicles subject to the condition that it would deliver the proceeds of the sale to BNP, to be applied to its obligations to it. In case the vehicles are not sold, Proton would return them to BNP, together with all the accompanying documents of title.

Allegedly, Proton failed to deliver the proceeds of the sale and return the unsold motor vehicles. Pursuant to the corporate guarantee, BNP demanded from Automotive, Asea and Autocorp the payment. These Guarantors refused to pay. Hence, BNP filed a complaint for sum of money. The Makati RTC Clerk of Court assessed the docket fees which BNP paid at P352,116.30.

The defendants-herein petitioners filed a Motion to Dismiss9 on the ground that BNP failed to pay the correct docket fees to thus prevent the trial court from acquiring jurisdiction over the case. The RTC denied the MTD. Petitioner moved for reconsideration but was denied. Petitioners thereupon brought the case on certiorari and mandamus to the Court of Appeals which was denied. Hence, this petition.

Issue:

Whether the case should be dismissed because of incorrect payment of docket fees?

Held:

NO. 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.

The ruling in Sun Insurance Office was echoed in the 2005 case of Heirs of Bertuldo Hinog v. Hon. Achilles Melicor:

Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the applicable prescriptive or reglementary period, more so when the party involved demonstrates a willingness to abide by the rules prescribing such payment. Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the government, the Manchester rule does not apply.

In the case at bar, respondent merely relied on the assessment made by the clerk of court which turned out to be incorrect. Under the circumstances, the clerk of court has the responsibility of reassessing what respondent must pay within the prescriptive period, failing which the complaint merits dismissal.

Ruby Shelter Builders vs. Judge Formaran 578 SCRA 283

Facts:

Petitioner obtained a loan from respondents Romeo Y. Tan (Tan) and Roberto L. Obiedo (Obiedo), secured by real estate mortgages over five parcels of land. When petitioner was unable to pay the loan when it became due and demandable, respondents Tan and Obiedo agreed to an extension of the same. In turn, petitioner is to execute Deeds of Sale of the parcels of land in favor of respondents and if he fails to pay, respondents Tan and Obiedo could already present the Deeds of Absolute Sale covering the same to the RD of Naga to acquire TCTs to the said properties in their names. Also, petitioner may choose to redeem the property.

Petitioner failed to pay, respondents Tan and Obiedo presented the Deeds of Absolute Sale before the RD of Naga City. As a result of which, they were able to secure TCTs over the five parcels of land in their names.

Petitioner filed before the RTC a Complaint12against respondents Tan, Obiedo, and Atty. Reyes, for declaration of nullity of deeds of sales.

Upon filing its Complaint with the RTC, petitioner paid the sum ofP13,644.25 for docket and other legal fees, as assessed by the Office of the Clerk of Court. The Clerk of Court initially considered Civil Case No. 2006-0030 as an action incapable of pecuniary estimation and computed the docket and other legal fees due thereon according to Section 7(b)(1), Rule 141 of the Rules of Court.

Only respondent Tan filed an Answer. Thereafter, respondent Tan filed before the RTC an Omnibus Motion in which he contended that the case filed by the petitioner involved real properties, the docket fees for which should be computed in accordance with Section 7(a), not Section 7(b)(1), of Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC which took effect on 16 August 2004. Since petitioner did not pay the appropriate docket fees for Civil Case No. 2006-0030, the RTC did not acquire jurisdiction over the said case.

The RTC ruled in favor of respondent. Petitioner moved for reconsideration but was denied. Petitioner, however, had not yet conceded, and it filed a Petition for Certiorari with the Court of Appeals. This time, petitioner asserts that the RTC24acted with grave abuse of discretion, amounting to lack or excess of jurisdiction, when it issued the order mandating that the docket/filing fees for Civil Case No. 2006-0030, an action for annulment of deeds of sale, be assessed under Section 7(a), Rule 141 of the Rules of Court, as amended. The CA affirmed the decision of the RTC. Hence, this petition.

Issue:

Whether the CA erred in affirming the decision of the RTC in so far as the applicable computation of docket fees is concerned?

Held:

No. In Manchester Development Corporation v. Court of Appeals,28the Court explicitly pronounced that "[t]he court acquires jurisdiction over any case only upon the payment of the prescribed docket fee." Hence, the payment of docket fees is not only mandatory, but also jurisdictional.

In Sun Insurance Office, Ltd. (SIOL) v. Asuncion,29the Court laid down guidelines for the implementation of its previous pronouncement in Manchester under particular circumstances, to wit:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.

In the Petition at bar, the RTC found, and the Court of Appeals affirmed, that petitioner did not pay the correct amount of docket fees for Civil Case No. 2006-0030. According to both the trial and appellate courts, petitioner should pay docket fees in accordance with Section 7(a), Rule 141 of the Rules of Court, as amended. Consistent with the liberal tenor of Sun Insurance, the RTC, instead of dismissing outright petitioners Complaint in Civil Case No. 2006-0030, granted petitioner time to pay the additional docket fees. Despite the seeming munificence of the RTC, petitioner refused to pay the additional docket fees assessed against it, believing that it had already paid the correct amount before, pursuant to Section 7(b)(1), Rule 141 of the Rules of Court, as amended.

(The SC explained that in order to determine the correct basis for the computation, the nature of the action must be settled. The SC said that it was a real action and not merely an action to declare as null and void the deeds of sale. Hence, Rule 141 (a) should apply. Consequently, 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.)

St. Louis University vs. Cobarrubias 626 SCRA 649

Facts:

Respondent Evangeline C. Cobarrubias is an associate professor of the petitioners College of Human Sciences. She is an active member of the Union of Faculty and Employees of Saint Louis University (UFESLU). Their 2006-2011 CBA, contained the following provisions: Section 7.7. For teaching employees in college who fail the yearly evaluation, the following provisions shall apply:

(a) Teaching employees who are retained for three (3) cumulative years in five (5) years shall be on forced leave for one (1) regular semester during which period all benefits due them shall be suspended.

SLU placed Cobarrubias on forced leave for the first semester of School Year (SY) 2007-2008 when she failed the evaluation for SY 2002-2003, SY 2005-2006, and SY 2006-2007, with the rating of 85, 77, and 72.9 points, respectively, below the required rating of 87 points.

Respondent sought recourse from the CBAs grievance machinery but no settlement was reached. Thus, respondent filed with the National Conciliation and Mediation Board of the DOLE a case for illegal forced leave and illegal suspension. The case was then referred to the Voluntary Arbitrator (VA). The case was dismissed by the VA.

On December 5, 2007, Cobarrubias filed with the CA a petition for review under Rule 43 of the Rules of Court, but failed to pay the required filing fees and to attach to the petition copies of the material portions of the record. The CA dismissed the petition. On February 15, 2008, Cobarrubias filed her motion for reconsideration, arguing that the ground cited is technical. She, nonetheless, attached to her motion copies of the material portions of the record and the postal money orders for P4,230.00. The CA reinstated the petition. It found that Cobarrubias substantially complied with the rules by paying the appeal fee in full and attaching the proper documents in her motion for reconsideration.

SLU filed a motion for reconsideration but was denied. SLU insisted that the VA decision had already attained finality for Cobarrubias failure to pay the docket fees on time. When the CA denied the motion for reconsideration that followed, SLU filed the present petition for review on certiorari.

Issue:

whether the CA erred in reinstating Cobarrubias petition despite her failure to pay the appeal fee within the reglementary period, and in reversing the VA decision.

Held:

Yes. Appeal is not a natural right but a mere statutory privilege, thus, appeal must be made strictly in accordance with the provision set by law. Rule 43 of the Rules of Court provides that appeals from the judgment of the VA shall be taken to the CA, by filing a petition for review within fifteen (15) days from the receipt of the notice of judgment. Furthermore, upon the filing of the petition, the petitioner shall pay to the CA clerk of court the docketing and other lawful fees; non-compliance with the procedural requirements shall be a sufficient ground for the petitions dismissal. Thus, payment in full of docket fees within the prescribed period is not only mandatory, but also jurisdictional. It is an essential requirement, without which, the decision appealed from would become final and executory as if no appeal has been filed.

As early as the 1932 case of Lazaro v. Endencia and Andres, we stressed that the payment of the full amount of the docket fee is an indispensable step for the perfection of an appeal. In Lee v. Republic, we decided that even though half of the appellate court docket fee was deposited, no appeal was deemed perfected where the other half was tendered after the period within which payment should have been made. In Aranas v. Endona, we reiterated that the appeal is not perfected if only a part of the docket fee is deposited within the reglementary period and the remainder is tendered after the expiration of the period.

In the present case, Cobarrubias filed her petition for review on December 5, 2007, fifteen (15) days from receipt of the VA decision on November 20, 2007, but paid her docket fees in full only after seventy-two (72) days, when she filed her motion for reconsideration on February 15, 2008 and attached the postal money orders for P4,230.00. Undeniably, the docket fees were paid late, and without payment of the full docket fees, Cobarrubias appeal was not perfected within the reglementary period.

( The SC added that respondent failed to prove that the case falls within the exceptions for paying the docket fees in full when she filed her petition for review.)

Relucio vs. Lopez 373 SCRA 578

Facts:

Private respondent Angelina Mejia Lopez filed a petition for "APPOINTMENT AS SOLE ADMINISTRATIX OF CONJUGAL PARTNERSHIP OF PROPERTIES, FORFEITURE, ETC.," against defendant Alberto Lopez and petition Imelda Relucio. She alleged that she and Lopez are legally Married and that after abandoning her and their 4 legitimate children, he arrogated unto himself full and exclusive control and administration of the conjugal properties, spending and using the same for his sole gain and benefit to the total exclusion of the private respondent and their four children and that he maintained an illicit relationship and cohabited with herein petitioner since 1976.

A Motion to Dismiss the Petition was filed by herein petitioner on the ground that private respondent has no cause of action against her. The trial court denied the motion. Petitioner Relucio filed a Motion for Reconsideration to the Order of the respondent Judge but the same was likewise denied. Petitioner filed with the Court of Appeals a petition for certiorari assailing the trial court's denial of her motion to dismiss. The Court of Appeals promulgated a decision denying the petition. She moved for reconsideration but was also denied. Hence, this appeal.

Issue:

1. Whether respondent's petition for appointment as sole administratrix of the conjugal property, accounting, etc. against her husband Alberto J. Lopez established a cause of action against petitioner.

2. Whether petitioner's inclusion as party defendant is essential in the proceedings for a complete adjudication of the controversy.

Held:

1. No. "A cause of action is an act or omission of one party the defendant in violation of the legal right of the other."10 The elements of a cause of action are:

(1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created;

(2) an obligation on the part of the named defendant to respect or not to violate such right; and

(3) an act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages.

A cause of action is sufficient if a valid judgment may be rendered thereon if the alleged facts were admitted or proved.

In order to sustain a motion to dismiss for lack of cause of action, the complaint must show that the claim for relief does not exist, rather than that a claim has been merely defectively stated or is ambiguous, indefinite or uncertain.

The complaint is by an aggrieved wife against her husband.

Nowhere in the allegations does it appear that relief is sought against petitioner. Respondent's causes of action were all against her husband.

The first cause of action is for judicial appointment of respondent as administratrix of the conjugal partnership or absolute community property arising from her marriage to Alberto J. Lopez. Petitioner is a complete stranger to this cause of action.

2. No. A real party in interest is one who stands "to be benefited or injured by the judgment of the suit."18 In this case, petitioner would not be affected by any judgment in Special Proceedings M-3630.

If petitioner is not a real party in interest, she cannot be an indispensable party. An indispensable party is one without whom there can be no final determination of an action.19 Petitioner's participation in Special Proceedings M-36-30 is not indispensable. Certainly, the trial court can issue a judgment ordering Alberto J. Lopez to make an accounting of his conjugal partnership with respondent, and give support to respondent and their children, and dissolve Alberto J. Lopez' conjugal partnership with respondent, and forfeit Alberto J. Lopez' share in property co-owned by him and petitioner. Such judgment would be perfectly valid and enforceable against Alberto J. Lopez.

Nor can petitioner be a necessary party in Special Proceedings M-3630. A necessary party as one who is not indispensable but who ought to be joined as party if complete relief is to be accorded those already parties, or for a complete determination or settlement of the claim subject of the action.20 In the context of her petition in the lower court, respondent would be accorded complete relief if Alberto J. Lopez were ordered to account for his alleged conjugal partnership property with respondent, give support to respondent and her children, turn over his share in the co-ownership with petitioner and dissolve his conjugal partnership or absolute community property with respondent.

Rule 1 to 5 (inc. 1991 Revised Rules on Summary Procedure)

Facts:

Respondent FGU Insurance Corporation filed a complaint with the Regional Trial Court of Makati1 alleging that petitioner Evangeline K. Alday owed it P114,650.76, representing unliquidated cash advances, unremitted costs of premiums and other charges incurred by petitioner in the course of her work as an insurance agent for respondent. Petitioner filed her answer and by way of counterclaim, asserted her right for the payment of P104,893.45, representing direct commissions, profit commissions and contingent bonuses earned from 1 July 1986 to 7 December 1986, and for accumulated premium reserves amounting to P500,000.00. In addition, petitioner prayed for attorney's fees, litigation expenses, moral damages and exemplary damages for the allegedly unfounded action filed by respondent.

Respondent filed a motion to dismiss petitioner's counterclaim, contending that the trial court never acquired jurisdiction over the same because of the non-payment of docket fees by petitoner. In response, petitioner asked the trial court to declare her counterclaim as exempt from payment of docket fees since it is compulsory and that respondent be declared in default for having failed to answer such counterclaim.

The trial court9 granted respondent's motion to dismiss petitioner's counterclaim and consequently, denied petitioner's motion. The court found petitioner's counterclaim to be merely permissive in nature and held that petitioner's failure to pay docket fees prevented the court from acquiring jurisdiction over the same.10 The trial court denied petitioner's motion for reconsideration. On appeal, the CA sustained the trial courts decision. A MR was filed but was denied. Hence, this petition for review.

Issue:

Whether the counterclaim is compulsory or permissive?

Held:

Permissive. A compulsory counterclaim is one which, being cognizable by the regular courts of justice, arises out of or is connected with the transaction or occurrence constituting the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.19

In Valencia v. Court of Appeals,20 this Court capsulized the criteria or tests that may be used in determining whether a counterclaim is compulsory or permissive, summarized as follows:

1. Are the issues of fact and law raised by the claim and counterclaim largely the same?

2. Would res judicata bar a subsequent suit on defendant's claim absent the compulsory counterclaim rule?

3. Will substantially the same evidence support or refute plaintiff's claim as well s defendant's counterclaim?

4. Is there any logical relation between the claim and the counterclaim?

Another test, applied in the more recent case of Quintanilla v. Court of Appeals,21 is the "compelling test of compulsoriness" which requires "a logical relationship between the claim and counterclaim, that is, where conducting separate trials of the respective claims of the parties would entail a substantial duplication of effort and time by the parties and the court."

Tested against the abovementioned standards, petitioner's counterclaim for commissions, bonuses, and accumulated premium reserves is merely permissive. The evidence required to prove petitioner's claims differs from that needed to establish respondent's demands for the recovery of cash accountabilities from petitioner, such as cash advances and costs of premiums. The recovery of respondent's claims is not contingent or dependent upon establishing petitioner's counterclaim, such that conducting separate trials will not result in the substantial duplication of the time and effort of the court and the parties. One would search the records in vain for a logical connection between the parties' claims. This conclusion is further reinforced by petitioner's own admissions since she declared in her answer that respondent's cause of action, unlike her own, was not based upon the Special Agent's Contract.23 However, petitioner's claims for damages, allegedly suffered as a result of the filing by respondent of its complaint, are compulsory.24

There is no need for need for petitioner to pay docket fees for her compulsory counterclaim.25 On the other hand, in order for the trial court to acquire jurisdiction over her permissive counterclaim, petitioner is bound to pay the prescribed docket fees.26 The rule on the payment of filing fees has been laid down by the Court in the case of Sun Insurance Office, Ltd. V. Hon. Maximiano Asuncion27-

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.

In Suson, the Court explained that although the payment of the prescribed docket fees is a jurisdictional requirement, its non-payment does not result in the automatic dismissal of the case provided the docket fees are paid within the applicable prescriptive or reglementary period.

Korea Technologies Inc. vs. Lerma

Facts:

Petitioner (KOGIES) is a Korean corporation which is engaged in the supply and installation of Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants, while private respondent Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic corporation.

Petitioner and respondent entered into a contract whereby KOGIES would set up an LPG Cylinder Manufacturing Plant in Carmona, Cavite. The total contract price amounted to USD 1,530,000. Subsequently, the machineries, equipment, and facilities for the manufacture of LPG cylinders were shipped, delivered, and installed in the Carmona plant. For the remaining balance of USD306,000 for the installation and initial operation of the plant, PGSMC issued two postdated checks. When KOGIES deposited the checks, these were dishonored for the reason PAYMENT STOPPED. Thus, on May 8, 1998, KOGIES sent a demand letter[6] to PGSMC threatening criminal action for violation of BP 22 in case of non-payment. On the same date, the wife of PGSMCs President faxed a letter to KOGIES President who was then staying at a Makati City hotel. She complained that not only did KOGIES deliver a different brand of hydraulic press from that agreed upon but it had not delivered several equipment parts already paid for.

PGSMC informed KOGIES that PGSMC was canceling their Contract dated March 5, 1997 on the ground that KOGIES had altered the quantity and lowered the quality of the machineries and equipment it delivered to PGSMC, and that PGSMC would dismantle and transfer the machineries, equipment, and facilities installed in the Carmona plant. Five days later, PGSMC filed before the Office of the Public Prosecutor an Affidavit-Complaint for Estafa. KOGIES wrote PGSMC informing the latter that PGSMC could not unilaterally rescind their contract nor dismantle and transfer the machineries and equipment on mere imagined violations by KOGIES. It also insisted that their disputes should be settled by arbitration as agreed upon in Article 15, the arbitration clause of their contract.

Then, KOGIES instituted an Application for Arbitration before the Korean Commercial Arbitration Board (KCAB) in Seoul, Korea pursuant to Art. 15 of the Contract as amended. Pursuant to the application for arbitration, KOGIES filed a Complaint for Specific Performance before the RTC of Muntinlupa. PGSMC filed its Answer with Compulsory Counterclaim. The petitioner filed a MTD the counterclaim for failing to pay the docket fees. The trial court ruled that payment is unnecessary because the counterclaim of respondent is compulsory in nature. Petitioner elevated the case to the CA via petition for certiorari. The CA affirmed the trial courts decision. Hence, the petition for review.

Issue:

Whether respondent was required to pay docket fees for the counterclaim?

Held:

No. As aptly ruled by the CA, the counterclaims of PGSMC were incorporated in its Answer with Compulsory Counterclaim dated July 17, 1998 in accordance with Section 8 of Rule 11, 1997 Revised Rules of Civil Procedure, the rule that was effective at the time the Answer with Counterclaim was filed. Sec. 8 on existing counterclaim or cross-claim states, A compulsory counterclaim or a cross-claim that a defending party has at the time he files his answer shall be contained therein.On July 17, 1998, at the time PGSMC filed its Answer incorporating its counterclaims against KOGIES, it was not liable to pay filing fees for said counterclaims being compulsory in nature. We stress, however, that effective August 16, 2004 under Sec. 7, Rule 141, as amended by A.M. No. 04-2-04-SC, docket fees are now required to be paid in compulsory counterclaim or cross- claims.

Mercado vs. CA 569 SCRA

Facts:

Mercado had been distributing respondent San Miguel Corporations (SMCs) beer products in Quiapo, Manila since 1967. In 1991, SMC extended to him aP7.5 million credit line allowing him to withdraw goods on credit. To secure his purchases, Mercado assigned three China Banking Corporation (CBC) certificates of deposit amounting toP5 million1to SMC and executed a continuing hold-out agreement stating that Any demand made by [SMC] on [CBC], claiming default on my/our part shall be conclusive on [CBC] and shall serve as absolute authority for [CBC] to encash the [CBC certificates of deposit] in accordance with the third paragraph of this Hold-Out Agreement, whether or not I/we have in fact defaulted on any of my/our obligations with [SMC], it being understood that the issue of whether or not there was factual default must be threshed out solely between me/us and [SMC]

SMC notified CBC that Mercado failed to pay for the items he withdrew on credit. Consequently, citing the continuing hold-out agreement, it asked CBC to release the proceeds of the assigned certificates of deposit. CBC approved SMBs request and informed Mercado.

Mercado filed an action to annul the continuing hold-out agreement and deed of assignment in the RTC of Manila. He claimed that the agreement constitute pactum commisorium which is void. SMC filed its answer with counterclaim against Mercado. It contended that Mercado delivered only two CBC certificates of deposit amounting toP4.5 million5and asserted that the execution of the continuing hold-out agreement and deed of assignment was a recognized business practice. Then, Mercado filed an Urgent Manifestation claiming that he was no longer interested in annulling the continuing hold-out agreement and deed of assignment. The RTC, however, denied the motion.8Instead, it set the case for pre-trial.

The trial court rendered a judgment in favour of SMC. Petitioner appealed to the CA, insisting that Mercado did not default in the payment of his obligations to SMC. The CA, however, affirmed in toto the RTCs decision. Thereafter, Mercado passed away and was substituted by his heirs. Petitioners subsequently filed this petition asserting that the CA erred in affirming the RTC decisionin toto.The said decision was void. SMCs counterclaim was permissive in nature. Inasmuch as SMC did not pay docket fees, the RTC never acquired jurisdiction over the counterclaim.

Issue:

Whether the counterclaim is permissive or compulsory?

Held:

Compulsory. A counterclaim (ora claim which a defending party may have against any party)16may be compulsory17or permissive. A counterclaim that (1) arises out of (or is necessarily connected with) the transaction or occurrence that is the subject matter of the opposing partys claim; (2) falls within the jurisdiction of the court and (3) does not require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction, is compulsory.18Otherwise, a counterclaim is merely permissive.s

When Mercado sought to annul the continuing hold-out agreement and deed of assignment (which he executed as security for his credit purchases), he in effect sought to be freed from them. While he admitted having outstanding obligations, he nevertheless asserted that those were not covered by the assailed accessory contracts. For its part, aside from invoking the validity of the said agreements, SMC therefore sought to collect the payment for the value of goods Mercado purchased on credit. Thus, Mercados complaint and SMCs counterclaim both touched the issues of whether the continuing hold-out agreement and deed of assignment were valid and whether Mercado had outstanding liabilities to SMC. The same evidence would essentially support or refute Mercados claim and SMCs counterclaim.

Based on the foregoing, had these issues been tried separately, the efforts of the RTC and the parties would have had to be duplicated. Clearly, SMCs counterclaim, being logically related to Mercados claim, was compulsory in nature.19Consequently, the payment of docket fees was not necessary for the RTC to acquire jurisdiction over the subject matter.

Proton Pilipinas vs. Banque National de Paris 460 SCRA

Facts:

Proton Pilipinas Corporation (Proton) availed of the credit facilities of herein respondent, Banque Nationale de Paris (BNP). To guarantee the payment of its obligation, its co-petitioners Automotive Corporation Philippines (Automotive), Asea One Corporation (Asea) and Autocorp Group (Autocorp) executed a corporate guarantee2 to the extent of US$2,000,000.00. BNP and Proton subsequently entered into three trust receipt.

Under the terms of the trust receipt agreements, Proton would receive imported passenger motor vehicles and hold them in trust for BNP. Proton would be free to sell the vehicles subject to the condition that it would deliver the proceeds of the sale to BNP, to be applied to its obligations to it. In case the vehicles are not sold, Proton would return them to BNP, together with all the accompanying documents of title.

Allegedly, Proton failed to deliver the proceeds of the sale and return the unsold motor vehicles. Pursuant to the corporate guarantee, BNP demanded from Automotive, Asea and Autocorp the payment. These Guarantors refused to pay. Hence, BNP filed a complaint for sum of money. The Makati RTC Clerk of Court assessed the docket fees which BNP paid at P352,116.30.

The defendants-herein petitioners filed a Motion to Dismiss9 on the ground that BNP failed to pay the correct docket fees to thus prevent the trial court from acquiring jurisdiction over the case. The RTC denied the MTD. Petitioner moved for reconsideration but was denied. Petitioners thereupon brought the case on certiorari and mandamus to the Court of Appeals which was denied. Hence, this petition.

Issue:

Whether the case should be dismissed because of incorrect payment of docket fees?

Held:

NO. 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.

The ruling in Sun Insurance Office was echoed in the 2005 case of Heirs of Bertuldo Hinog v. Hon. Achilles Melicor:

Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee is paid within the applicable prescriptive or reglementary period, more so when the party involved demonstrates a willingness to abide by the rules prescribing such payment. Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no intention to defraud the government, the Manchester rule does not apply.

In the case at bar, respondent merely relied on the assessment made by the clerk of court which turned out to be incorrect. Under the circumstances, the clerk of court has the responsibility of reassessing what respondent must pay within the prescriptive period, failing which the complaint merits dismissal.

Ruby Shelter Builders vs. Judge Formaran 578 SCRA 283

Facts:

Petitioner obtained a loan from respondents Romeo Y. Tan (Tan) and Robe