G.R. No.

75919 May 7, 1987

MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners,
vs.
COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, ANDREW
LUISON, GRACE LUISON and JOSE DE MAISIP, respondents.
Tanjuatco, Oreta and Tanjuatco for petitioners.
Pecabar Law Offices for private respondents.
RESOLUTION

GANCAYCO, J.:
Acting on the motion for reconsideration of the resolution of the Second Division of January 28,1987 and
another motion to refer the case to and to be heard in oral argument by the Court En Banc filed by
petitioners, the motion to refer the case to the Court en banc is granted but the motion to set the case for
oral argument is denied.
Petitioners in support of their contention that the filing fee must be assessed on the basis of the amended
complaint cite the case of Magaspi vs. Ramolete. 1 They contend that the Court of Appeals erred in that
the filing fee should be levied by considering the amount of damages sought in the original complaint.
The environmental facts of said case differ from the present in that
1. The Magaspi case was an action for recovery of ownership and possession of a parcel of land with
damages. 2While the present case is an action for torts and damages and specific performance with
prayer for temporary restraining order, etc. 3
2. In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of the defendant
to the property, the declaration of ownership and delivery of possession thereof to plaintiffs but also asks
for the payment of actual moral, exemplary damages and attorney's fees arising therefrom in the amounts
specified therein. 4 However, in the present case, the prayer is for the issuance of a writ of preliminary
prohibitory injunction during the pendency of the action against the defendants' announced forfeiture of
the sum of P3 Million paid by the plaintiffs for the property in question, to attach such property of
defendants that maybe sufficient to satisfy any judgment that maybe rendered, and after hearing, to order
defendants to execute a contract of purchase and sale of the subject property and annul defendants'
illegal forfeiture of the money of plaintiff, ordering defendants jointly and severally to pay plaintiff actual,
compensatory and exemplary damages as well as 25% of said amounts as maybe proved during the trial
as attorney's fees and declaring the tender of payment of the purchase price of plaintiff valid and
producing the effect of payment and to make the injunction permanent. The amount of damages sought is
not specified in the prayer although the body of the complaint alleges the total amount of over P78 Million
as damages suffered by plaintiff. 5

3. Upon the filing of the complaint there was an honest difference of opinion as to the nature of the action
in the Magaspi case. The complaint was considered as primarily an action for recovery of ownership and
possession of a parcel of land. The damages stated were treated as merely to the main cause of action.
Thus, the docket fee of only P60.00 and P10.00 for the sheriff's fee were paid. 6
In the present case there can be no such honest difference of opinion. As maybe gleaned from the
allegations of the complaint as well as the designation thereof, it is both an action for damages and
specific performance. The docket fee paid upon filing of complaint in the amount only of P410.00 by
considering the action to be merely one for specific performance where the amount involved is not
capable of pecuniary estimation is obviously erroneous. Although the total amount of damages sought is
not stated in the prayer of the complaint yet it is spelled out in the body of the complaint totalling in the
amount of P78,750,000.00 which should be the basis of assessment of the filing fee.
4. When this under-re assessment of the filing fee in this case was brought to the attention of this Court
together with similar other cases an investigation was immediately ordered by the Court. Meanwhile
plaintiff through another counsel with leave of court filed an amended complaint on September 12, 1985
for the inclusion of Philips Wire and Cable Corporation as co-plaintiff and by emanating any mention of
the amount of damages in the body of the complaint. The prayer in the original complaint was maintained.
After this Court issued an order on October 15, 1985 ordering the re- assessment of the docket fee in the
present case and other cases that were investigated, on November 12, 1985 the trial court directed
plaintiffs to rectify the amended complaint by stating the amounts which they are asking for. It was only
then that plaintiffs specified the amount of damages in the body of the complaint in the reduced amount of
P10,000,000.00. 7 Still no amount of damages were specified in the prayer. Said amended complaint was
admitted.
On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay the amount of
P3,104.00 as filing fee covering the damages alleged in the original complaint as it did not consider the
damages to be merely an or incidental to the action for recovery of ownership and possession of real
property. 8 An amended complaint was filed by plaintiff with leave of court to include the government of the
Republic as defendant and reducing the amount of damages, and attorney's fees prayed for to
P100,000.00. Said amended complaint was also admitted. 9
In the Magaspi case, the action was considered not only one for recovery of ownership but also for
damages, so that the filing fee for the damages should be the basis of assessment. Although the payment
of the docketing fee of P60.00 was found to be insufficient, nevertheless, it was held that since the
payment was the result of an "honest difference of opinion as to the correct amount to be paid as docket
fee" the court "had acquired jurisdiction over the case and the proceedings thereafter had were proper
and regular." 10 Hence, as the amended complaint superseded the original complaint, the allegations of
damages in the amended complaint should be the basis of the computation of the filing fee.11
In the present case no such honest difference of opinion was possible as the allegations of the complaint,
the designation and the prayer show clearly that it is an action for damages and specific performance.
The docketing fee should be assessed by considering the amount of damages as alleged in the original
complaint.
As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon payment
of the docket fee regardless of the actual date of filing in court . 12 Thus, in the present case the trial court
did not acquire jurisdiction over the case by the payment of only P410.00 as docket fee. Neither can the

amendment of the complaint thereby vest jurisdiction upon the Court. 13 For an legal purposes there is no
such original complaint that was duly filed which could be amended. Consequently, the order admitting
the amended complaint and all subsequent proceedings and actions taken by the trial court are null and
void.
The Court of Appeals therefore, aptly ruled in the present case that the basis of assessment of the docket
fee should be the amount of damages sought in the original complaint and not in the amended complaint.
The Court cannot close this case without making the observation that it frowns at the practice of counsel
who filed the original complaint in this case of omitting any specification of the amount of damages in the
prayer although the amount of over P78 million is alleged in the body of the complaint. This is clearly
intended for no other purpose than to evade the payment of the correct filing fees if not to mislead the
docket clerk in the assessment of the filing fee. This fraudulent practice was compounded when, even as
this Court had taken cognizance of the anomaly and ordered an investigation, petitioner through another
counsel filed an amended complaint, deleting all mention of the amount of damages being asked for in
the body of the complaint. It was only when in obedience to the order of this Court of October 18, 1985,
the trial court directed that the amount of damages be specified in the amended complaint, that
petitioners' counsel wrote the damages sought in the much reduced amount of P10,000,000.00 in the
body of the complaint but not in the prayer thereof. The design to avoid payment of the required docket
fee is obvious.
The Court serves warning that it will take drastic action upon a repetition of this unethical practice.
To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings
should specify the amount of damages being prayed for not only in the body of the pleading but also in
the prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any
pleading that fails to comply with this requirement shall not bib accepted nor admitted, or shall otherwise
be expunged from the record.
The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An
amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less
the payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the
Magaspi case 14 in so far as it is inconsistent with this pronouncement is overturned and reversed.
WHEREFORE, the motion for reconsideration is denied for lack of merit.
SO ORDERED.

G.R. Nos. 79937-38 February 13, 1989

SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners,
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court, Quezon City
and MANUEL CHUA UY PO TIONG, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners. Tanjuatco, Oreta,
Tanjuatco, Berenguer & Sanvicente Law Offices for private respondent.

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

On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was temporarily
assigned, issuedan order to the Clerk of Court instructing him to issue a certificate of assessment of the
docket fee paid by private respondent and, in case of deficiency, to include the same in said certificate.
On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On August
30,1984, an amended complaint was filed by private respondent including the two additional defendants
aforestated.
Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his
assumption into office on January 16, 1986, issued a Supplemental Order requiring the parties in the case
to comment on the Clerk of Court's letter-report signifying her difficulty in complying with the Resolution of
this Court of October 15, 1985 since the pleadings filed by private respondent did not indicate the exact
amount sought to be recovered. On January 23, 1986, private respondent filed a "Compliance" and a "ReAmended Complaint" stating therein a claim of "not less than Pl0,000,000. 00 as actual compensatory
damages" in the prayer. In the body of the said second amended complaint however, private respondent
alleges actual and compensatory damages and attorney's fees in the total amount of about
P44,601,623.70.
On January 24, 1986, Judge Asuncion issued another Order admitting the second amended complaint
and stating therein that the same constituted proper compliance with the Resolution of this Court and that
a copy thereof should be furnished the Clerk of Court for the reassessment of the docket fees. The
reassessment by the Clerk of Court based on private respondent's claim of "not less than P10,000,000.00
as actual and compensatory damages" amounted to P39,786.00 as docket fee. This was subsequently
paid by private respondent.
Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judie
Asuncion dated January 24, 1986.
On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 as d.qmages so the total claim amounts to about P64,601,623.70. On October 16, 1986,
or some seven months after filing the supplemental complaint, the private respondent paid the additional
docket fee of P80,396.00. 1
On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows:
WHEREFORE, judgment is hereby rendered:
1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks
annulment of the order
(a) denying petitioners' motion to dismiss the complaint, as amended, and
(b) granting the writ of preliminary attachment, but giving due course to the portion
thereof questioning the reassessment of the docketing fee, and requiring the Honorable
respondent Court to reassess the docketing fee to be paid by private respondent on the
basis of the amount of P25,401,707.00. 2
Hence, the instant petition.

During the pendency of this petition and in conformity with the said judgment of respondent court, private
respondent paid the additional docket fee of P62,432.90 on April 28, 1988. 3
The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did not
acquire jurisdiction over Civil Case No. Q-41177 on the ground of nonpayment of the correct and proper
docket fee. Petitioners allege that while it may be true that private respondent had paid the amount of
P182,824.90 as docket fee as herein-above related, and considering that the total amount sought to be
recovered in the amended and supplemental complaint is P64,601,623.70 the docket fee that should be
paid by private respondent is P257,810.49, more or less. Not having paid the same, petitioners contend
that the complaint should be dismissed and all incidents arising therefrom should be annulled. In support
of their theory, petitioners cite the latest ruling of the Court in Manchester Development Corporation vs.
CA, 4 as follows:
The Court acquires jurisdiction over any case only upon the payment of the prescribed
docket fee. An amendment of the complaint or similar pleading will not thereby vest
jurisdiction in the Court, much less the payment of the docket fee based on the amounts
sought in the amended pleading. The ruling in the Magaspi Case in so far as it is
inconsistent with this pronouncement is overturned and reversed.
On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively to
Civil Case No. Q41177 for at the time said civil case was filed in court there was no
such Manchester ruling as yet. Further, private respondent avers that what is applicable is the ruling of
this Court in Magaspi v. Ramolete, 5wherein this Court held that the trial court acquired jurisdiction over
the case even if the docket fee paid was insufficient.
The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating
the procedure of the courts will be construed as applicable to actions pending and undetermined at the
time of their passage. Procedural laws are retrospective in that sense and to that extent. 6
In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the full amount of the docket fee
is an indispensable step for the perfection of an appeal. In a forcible entry and detainer case before the
justice of the peace court of Manaoag, Pangasinan, after notice of a judgment dismissing the case, the
plaintiff filed a notice of appeal with said court but he deposited only P8.00 for the docket fee, instead of
P16.00 as required, within the reglementary period of appeal of five (5) days after receiving notice of
judgment. Plaintiff deposited the additional P8.00 to complete the amount of the docket fee only fourteen
(14) days later. On the basis of these facts, this court held that the Court of First Instance did notacquire
jurisdiction to hear and determine the appeal as the appeal was not thereby perfected.
In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to become a Filipino citizen by
sending it through registered mail to the Office of the Solicitor General in 1953 but the required filing fee
was paid only in 1956, barely 5V2 months prior to the filing of the petition for citizenship. This Court ruled
that the declaration was not filed in accordance with the legal requirement that such declaration should be
filed at least one year before the filing of the petition for citizenship. Citing Lazaro, this Court concluded
that the filing of petitioner's declaration of intention on October 23, 1953 produced no legal effect until the
required filing fee was paid on May 23, 1956.
In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee were applied. It was an
original petition for quo warranto contesting the right to office of proclaimed candidates which was mailed,

addressed to the clerk of the Court of First Instance, within the one-week period after the proclamation as
provided therefor by law. 10 However, the required docket fees were paid only after the expiration of said
period. Consequently, this Court held that the date of such payment must be deemed to be the real date
of filing of aforesaid petition and not the date when it was mailed.
Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket fee must be paid before a
court will act on a petition or complaint. However, we also held that said rule is not applicable when
petitioner seeks the probate of several wills of the same decedent as he is not required to file a separate
action for each will but instead he may have other wills probated in the same special proceeding then
pending before the same court.
Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a case is deemed filed only
upon payment of the docket fee regardless of the actual date of its filing in court. Said case involved a
complaint for recovery of ownership and possession of a parcel of land with damages filed in the Court of
First Instance of Cebu. Upon the payment of P60.00 for the docket fee and P10.00 for the sheriffs fee, the
complaint was docketed as Civil Case No. R-11882. The prayer of the complaint sought that the Transfer
Certificate of Title issued in the name of the defendant be declared as null and void. It was also prayed
that plaintiff be declared as owner thereof to whom the proper title should be issued, and that defendant
be made to pay monthly rentals of P3,500.00 from June 2, 1948 up to the time the property is delivered to
plaintiff, P500,000.00 as moral damages, attorney's fees in the amount of P250,000.00, the costs of the
action and exemplary damages in the amount of P500,000.00.
The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket fee to
which an opposition was filed by the plaintiff alleging that the action was for the recovery of a parcel of
land so the docket fee must be based on its assessed value and that the amount of P60.00 was the
correct docketing fee. The trial court ordered the plaintiff to pay P3,104.00 as filing fee.
The plaintiff then filed a motion to admit the amended complaint to include the Republic as the defendant.
In the prayer of the amended complaint the exemplary damages earlier sought was eliminated. The
amended prayer merely sought moral damages as the court may determine, attorney's fees of
P100,000.00 and the costs of the action. The defendant filed an opposition to the amended complaint.
The opposition notwithstanding, the amended complaint was admitted by the trial court. The trial court
reiterated its order for the payment of the additional docket fee which plaintiff assailed and then
challenged before this Court. Plaintiff alleged that he paid the total docket fee in the amount of P60.00
and that if he has to pay the additional fee it must be based on the amended complaint.
The question posed, therefore, was whether or not the plaintiff may be considered to have filed the case
even if the docketing fee paid was not sufficient. In Magaspi, We reiterated the rule that the case was
deemed filed only upon the payment of the correct amount for the docket fee regardless of the actual date
of the filing of the complaint; that there was an honest difference of opinion as to the correct amount to be
paid as docket fee in that as the action appears to be one for the recovery of property the docket fee of
P60.00 was correct; and that as the action is also one, for damages, We upheld the assessment of the
additional docket fee based on the damages alleged in the amended complaint as against the
assessment of the trial court which was based on the damages alleged in the original complaint.
However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an action for
torts and damages and specific performance with a prayer for the issuance of a temporary restraining
order, etc. The prayer in said case is for the issuance of a writ of preliminary prohibitory injunction during

the pendency of the action against the defendants' announced forfeiture of the sum of P3 Million paid by
the plaintiffs for the property in question, the attachment of such property of defendants that may be
sufficient to satisfy any judgment that may be rendered, and, after hearing, the issuance of an order
requiring defendants to execute a contract of purchase and sale of the subject property and annul
defendants' illegal forfeiture of the money of plaintiff. It was also prayed that the defendants be made to
pay the plaintiff jointly and severally, actual, compensatory and exemplary damages as well as 25% of
said amounts as may be proved during the trial for attorney's fees. The plaintiff also asked the trial court
to declare the tender of payment of the purchase price of plaintiff valid and sufficient for purposes of
payment, and to make the injunction permanent. The amount of damages sought is not specified in the
prayer although the body of the complaint alleges the total amount of over P78 Millon allegedly suffered
by plaintiff.
Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee based on
the nature of the action for specific performance where the amount involved is not capable of pecuniary
estimation. However, it was obvious from the allegations of the complaint as well as its designation that
the action was one for damages and specific performance. Thus, this court held the plaintiff must be
assessed the correct docket fee computed against the amount of damages of about P78 Million, although
the same was not spelled out in the prayer of the complaint.
Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint on
September 12, 1985 by the inclusion of another co-plaintiff and eliminating any mention of the amount of
damages in the body of the complaint. The prayer in the original complaint was maintained.
On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case and other
cases that were investigated. On November 12, 1985, the trial court directed the plaintiff to rectify the
amended complaint by stating the amounts which they were asking for. This plaintiff did as instructed. In
the body of the complaint the amount of damages alleged was reduced to P10,000,000.00 but still no
amount of damages was specified in the prayer. Said amended complaint was admitted.
Applying the principle in Magaspi that "the case is deemed filed only upon payment of the docket fee
regardless of the actual date of filing in court," this Court held that the trial court did not acquire
jurisdiction over the case by payment of only P410.00 for the docket fee. Neither can the amendment of
the complaint thereby vest jurisdiction upon the Court. For all legal purposes there was no such original
complaint duly filed which could be amended. Consequently, the order admitting the amended complaint
and all subsequent proceedings and actions taken by the trial court were declared null and void. 13
The present case, as above discussed, is among the several cases of under-assessment of docket fee
which were investigated by this Court together with Manchester. The facts and circumstances of this case
are similar toManchester. In the body of the original complaint, the total amount of damages sought
amounted to about P50 Million. In the prayer, the amount of damages asked for was not stated. The
action was for the refund of the premium and the issuance of the writ of preliminary attachment with
damages. The amount of only P210.00 was paid for the docket fee. On January 23, 1986, private
respondent filed an amended complaint wherein in the prayer it is asked that he be awarded no less than
P10,000,000.00 as actual and exemplary damages but in the body of the complaint the amount of his
pecuniary claim is approximately P44,601,623.70. Said amended complaint was admitted and the private
respondent was reassessed the additional docket fee of P39,786.00 based on his prayer of not less than
P10,000,000.00 in damages, which he paid.

On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 in damages so that his total claim is approximately P64,601,620.70. On October 16,
1986, private respondent paid an additional docket fee of P80,396.00. After the promulgation of the
decision of the respondent court on August 31, 1987 wherein private respondent was ordered to be
reassessed for additional docket fee, and during the pendency of this petition, and after the promulgation
of Manchester, on April 28, 1988, private respondent paid an additional docket fee of P62,132.92.
Although private respondent appears to have paid a total amount of P182,824.90 for the docket fee
considering the total amount of his claim in the amended and supplemental complaint amounting to about
P64,601,620.70, petitioner insists that private respondent must pay a docket fee of P257,810.49.
The principle in Manchester could very well be applied in the present case. The pattern and the intent to
defraud the government of the docket fee due it is obvious not only in the filing of the original complaint
but also in the filing of the second amended complaint.
However, in Manchester, petitioner did not pay any additional docket fee until] the case was decided by
this Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the government, this
Court held that the court a quo did not acquire jurisdiction over the case and that the amended complaint
could not have been admitted inasmuch as the original complaint was null and void.
In the present case, a more liberal interpretation of the rules is called for considering that, unlike
Manchester, private respondent demonstrated his willingness to abide by the rules by paying the
additional docket fees as required. The promulgation of the decision in Manchester must have had that
sobering influence on private respondent who thus paid the additional docket fee as ordered by the
respondent court. It triggered his change of stance by manifesting his willingness to pay such additional
docket fee as may be ordered.
Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the total
amount of the claim. This is a matter which the clerk of court of the lower court and/or his duly authorized
docket clerk or clerk in-charge should determine and, thereafter, if any amount is found due, he must
require the private respondent to pay the same.
Thus, the Court rules as follows:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the
action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the
court may allow payment of the fee within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which shall
not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or
reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and
payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by the court, the additional filing fee

therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his
duly authorized deputy to enforce said lien and assess and collect the additional fee.
WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is
hereby instructed to reassess and determine the additional filing fee that should be paid by private
respondent considering the total amount of the claim sought in the original complaint and the
supplemental complaint as may be gleaned from the allegations and the prayer thereof and to require
private respondent to pay the deficiency, if any, without pronouncement as to costs.
SO ORDERED.

CONRADO COLARINA, petitioner, vs. COURT OF APPEALS, JUDGE NILO MALANYAON, RTC-Br.
32, Pili, Camarines Sur; ASSET PRIVATIZATION TRUST; COMMITTEE ON PRIVATIZATION;
DEPARTMENT OF AGRARIAN REFORM and BICOL AGRO-INDUSTRIAL PRODUCERS
COOPERATIVE,respondents.
DECISION
BELLOSILLO, J.:
In Tacay v. RTC of Tagum, Davao del Norte[1] we decreed that when an action involves real property
the legal fees for the filing thereof shall be assessed on the basis of its value. We have no reason to
deviate therefrom. Conrado Colarina alleges that he was the owner of several parcels of land with a total
land area of 6,340 hectares, more or less, which were placed under the compulsory coverage of RA No.
6657 otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 under which the
landowner is given the option to choose the mode of payment for his land. Since petitioner had not yet
been accordingly compensated he therefore sought to exchange his land with the physical assets of the
government.
Petitioner was particularly interested in the assets of the Bicol Sugar Development Corporation
(BISUDECO) which was foreclosed by the Philippine National Bank and turned over to the Assets
Privatization Trust (APT) for disposition to interested buyers. Thus he informed the APT, the Committee
on Privatization (COP) and the Department of Agrarian Reform (DAR) of his desire to be paid with
BISUDECO assets. Nevertheless, the APT published and offered the BISUDECO assets for sale at
public auction.
On 22 June 1992 petitioner submitted a bid of P270,000,000.00 plus 3% of the gross sales for the
next five (5) years. He stated in his bid that the entire amount would be paid for with his lands that were
taken and placed by the DAR under the operation of RA No. 6657. He also prayed that he be exempted
from putting up the required cash deposit equivalent to ten percent (10%) of his bid.
Petitioner's request for exemption from the bonding requirement was however denied. Since he
failed to put up the required cash bond, he was disqualified from the bidding thus leaving respondent
Bicol Agro-Industrial Producers Cooperative (BAPCI) as the only qualified bidder. On 22 June 1992 a
deed of sale over the BISUDECO assets for P160,000,000.00 was executed in favor of respondent
BAPCI.
On 4 November 1992 petitioner filed a complaint for Cancellation and Annulment of Sale or Award,
Mandamus with Preliminary Injunction, Restraining Order and Damages before the RTC of Camarines
Sur against the APT, the COP, the DAR and the BAPCI. On 1 December 1992 he filed his Amended
Complaint praying that
x x x upon receipt of this complaint, a restraining order be issued by the court, enjoining and commanding
the BICOL AGRO INDUSTRIAL PRODUCERS COOPERATIVE (BAPCI) to stop and desist in taking
possession the assets of BISUDECO, and to make such order permanent thereafter through a writ of
Preliminary Mandatory Injunction. After due notice and hearing judgment be rendered:

a. Declaring the sale, award and grant of the BISUDECO assets to the BAPCI by the APT/COP null and
void.
b. Ordering the APT, the COP and the DAR to grant, approve, effect and materialize the swapping of the
plaintiffs land with the BISUDECO assets pursuant to R.A. No. 6657, and the plaintiff being the highest
bidder.
c. Ordering the defendants to pay the plaintiff the amount of P200,000.00 for attorneys fee and for
necessary and related expenses of suit.
For the filing of his complaint in the Regional Trial Court petitioner paid the amount of P415.00 as docket
fees.
In its Answer with Counterclaim respondent BAPCI argued that the trial court did not acquire
jurisdiction over the complaint since plaintiff (petitioner herein) failed to pay the docket fee
ofP1,350,850.00, which was based on the value of the disputed property pegged by petitioner himself
at P270,000,000.00. On 23 March 1993 the trial court directed petitioner to complete within twenty (20)
days payment of the proper docket fees computed at "P1,350,850.00, less the P415.00 he has already
paid." The trial court likewise denied petitioners motion for reconsideration and directed him to pay the
legal fees in full within thirteen (13) days from notice or the case would be dismissed.
On 3 June 1993 petitioner went to the Court of Appeals on certiorari but on 22 July 1994 the
appellate court[2] dismissed the petition A closer look at the allegations of the amended Complaint together with the prayer sought to be attained
in the case, shows that petitioner is actually demanding payment for his sequestered 6,340 hectares
placed under the Agrarian Reform Law with the BISUDECO properties bidded on June 22, 1992. In the
process, petitioner necessarily had to ask for the annulment or the invalidity of the sale, award and grant
of the same BISUDECO properties in favor of the Bicol Agro Industrial Producers, Inc. Conclusively, the
lower court did not err or commit a mistake in assessing plaintiff with additional filing fee computed at
plaintiffs bid price of P270,000,000.00 submitted at the public auction sale on June 22, 1992, since the
case is not one which is beyond pecuniary estimation but rather a simple collection case where value of
the subject property or amount of demand is pecuniarily discernible. [3]
On 7 September 1994 the motion for reconsideration was denied; hence, the instant petition for
review on certiorari.
Petitioner asserts that the complaint he filed before the trial court, i.e, for cancellation and annulment
of sale or award, mandamus with preliminary injunction, restraining order and damages, is not capable of
pecuniary estimation; as such he should not be required to pay a docket fee based on the assessed value
of the BISUDECO assets. He contends that the subject matter of litigation is not the assets of
BISUDECO but his claim for a better right to the sale or award. Therefore, the amount
of P270,000,000.00 which he offered for the BISUDECO assets cannot be used as basis in computing
the filing fees. Rather, he should only be assessed P415.00 based on the amount of P200,000.00 which
he claimed as attorneys fees.

We disagree. The Amended Complaint filed by petitioner readily shows that his primary and ultimate
intention is to recover the BISUDECO assets as payment for his landholdings which were put under the
coverage of the CARL. This is quite evident from his allegations
11.

That in clear and willful disregard and violation of R.A. No. 7181, Section 1,
paragraph 2 hereto, and in full disregard of the plaintiffs right afforded to him by R.A. 6657,
defendant COMMITTEE ON PRIVATIZATION, informed the plaintiff last October 22, 1992,
that it has already approved the sale of the BISUDECO assets to defendant BICOL AGRO
INDUSTRIAL PRODUCERS COOPERATIVE (BAPCI), the latter being the alleged only
bidder and offered during the public bidding, which conclusion and action of the COP, is
clearly and patently false, fabricated and baseless, as plaintiff has already submitted his
written bid last June 22, 1992.

12.

That the alleged grants, approval, award and sale made by the COP of the
BISUDECO assets to the BAPCI, for a total amount of P160,000,000.00 as compared to the
plaintiffs bid of P270,000,000.00 is not only fishy, disadvantageous, but also prejudicial to
the interest and benefits of government.

13.

That the BAPCI is now claiming as owner of the BISUDECO assets, and is intending
to take actual, physical and material possession of the same, cannot be stopped, unless so
ordered by the court through a restraining order and after due notice and hearing by way of
writ of Preliminary Mandatory Injunction x x x x

15.

That plaintiff is entitled to the relief demanded, for the enforcement and protection of
his right to the option he has chosen and for compensation of his agricultural lands taken
over by the DAR, under R.A. No. 6657.

16.

That the intended taking over of the BISUDECO assets by the BAPCI shall clearly
prejudice the right of the plaintiff and shall create injustice on the (sic) part, unless stopped x
x x x[4]

Thus he prays for the nullification of the sale, award and grant by APT of the BISUDECO assets to
the BAPCI, and prays the trial court to order the APT, the COP and the DAR to "grant, approve, effect
and materialize" the swapping of his land with the BISUDECO assets pursuant to RA No. 6657 .
[5]
Consequently, petitioner was not merely seeking the annulment of the sale of the BISUDECO assets to
respondent BAPCI to rectify what he terms as a "fishy, disadvantageous x x x x prejudicial" sale, but was
really asking the court to declare him as the winning bidder and ultimately give him possession and
ownership of the BISUDECO assets which he himself pegged at P270,000,000.00. Hence, this case is
one which is really not beyond pecuniary estimation but rather a simple collection case where the value of
the subject property or amount demanded is pecuniarily determinable.
Thus, the trial court did not abuse its discretion, much less gravely, when it refused to dismiss the
complaint filed by petitioner, directing him instead to complete payment of the required docket fees. This
is conformably with our ruling in Sun Insurance Office, Ltd. v. Judge Asuncion [6] where we said that if 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
reglemenatry period. The disposition of the trial court is likewise in conformity with De Zuzuarregui, Jr. v.
Court of Appeals[7] where we reiterated that the court may allow the payment of the docket fee within a

reasonable time. While the payment of docket fees, like other procedural rules, may have been liberally
construed in certain cases if only to secure a just and speedy disposition of every action and proceeding,
it should not be ignored or belittled lest it scathes and prejudices the other party's substantive rights. The
payment of the docket fee in the proper amount should be followed subject only to certain exceptions
which should be strictly construed.
The Court of Appeals was also correct when it ruled that certiorari was not the proper remedy since
an appeal would still be available should the trial court ultimately dismiss the civil case. For,
beforecertiorari could lie, all the remedies available in the trial court should have first been
exhausted. Accordingly, we find no reason to reverse the Decision sought to be reviewed as it is in
accord with the facts and the law.
WHEREFORE, the instant petition for review on certiorari is DENIED. The 22 July 1994 Decision of
respondent Court of Appeals sustaining the 10 May 1993 Order of the Regional Trial Court of Pili,
Camarines Sur, Br. 32, in Civil Case No. P-1865, is AFFIRMED. Costs against petitioner.
SO ORDERED.

UBY SHELTER BUILDERS AND REALTY

DEVELOPMENT CORPORATION,
Petitioner,

G.R. No. 175914

Present:

- versusHON. PABLO C. FORMARAN III, Presiding

Judge of Regional Trial Court Branch 21,
Naga City, as Pairing Judge for Regional
Trial Court Branch 22, Formerly Presided By
HON.
NOVELITA
VILLEGAS-LLAGUNO
(Retired 01 May 2006), ROMEO Y. TAN,
ROBERTO L. OBIEDO and ATTY. TOMAS A.
REYES,
Respondents.

YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
PERALTA, JJ.

Promulgated:

February 10, 2009

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking
the reversal of the Decision[1] dated 22 November 2006 of the Court of Appeals in CA-G.R. SP No.
94800. The Court of Appeals, in its assailed Decision, affirmed the Order [2] dated 24 March 2006 of the
Regional Trial Court (RTC), Branch 22, of Naga City, in Civil Case No. RTC-2006-0030, ordering
petitioner Ruby Shelter Builders and Realty Development Corporation to pay additional docket/filing fees,
computed based on Section 7(a) of Rule 141 of the Rules of Court, as amended.
The present Petition arose from the following facts:
Petitioner obtained a loan[3] in the total amount of P95,700,620.00 from respondents Romeo Y.
Tan (Tan) and Roberto L. Obiedo (Obiedo), secured by real estate mortgages over five parcels of land, all
located in Triangulo, Naga City, covered by Transfer Certificates of Title (TCTs) No. 38376, [4] No. 29918,
[5]

No. 38374,[6] No. 39232,[7] and No. 39225,[8] issued by the Registry of Deeds for Naga City, in the name

of petitioner. 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 a Memorandum of Agreement[9] dated 17 March 2005, respondents Tan and Obiedo granted
petitioner until 31 December 2005 to settle its indebtedness, and condoned the interests, penalties and
surcharges

accruing

thereon

from 1

October

2004 to 31

December

2005 which

amounted

to P74,678,647.00. The Memorandum of Agreement required, in turn, that petitioner execute

simultaneously with the said Memorandum, by way of dacion en pago, Deeds of Absolute Sale in favor
of respondents Tan and Obiedo, covering the same parcels of land subject of the mortgages. The Deeds
of Absolute Sale would be uniformly dated 2 January 2006, and state that petitioner sold to respondents
Tan and Obiedo the parcels of land for the following purchase prices:
TCT No.

Purchase Price

38376
29918
38374
39232
39225

P 9,340,000.00
P 28,000,000.00
P 12,000,000.00
P 1,600,000.00
P 1,600,000.00

Petitioner could choose to pay off its indebtedness with individual or all five parcels of land; or it
could redeem said properties by paying respondents Tan and Obiedo the following prices for the same,
inclusive of interest and penalties:
TCT No.

Redemption Price

38376
29918
38374
39232
39225

P 25,328,939.00
P 35,660,800.00
P 28,477,600.00
P 6,233,381.00
P 6,233,381.00

In the event that petitioner is able to redeem any of the afore-mentioned parcels of land, the Deed
of Absolute Sale covering the said property shall be nullified and have no force and effect; and
respondents Tan and Obiedo shall then return the owners duplicate of the corresponding TCT to
petitioner and also execute a Deed of Discharge of Mortgage. However, if petitioner is unable to redeem
the parcels of land within the period agreed upon, respondents Tan and Obiedo could already present the
Deeds of Absolute Sale covering the same to the Office of the Register of Deeds for Naga City so
respondents Tan and Obiedo could acquire TCTs to the said properties in their names.
The Memorandum of Agreement further provided that should petitioner contest, judicially or
otherwise, any act, transaction, or event related to or necessarily connected with the said Memorandum
and the Deeds of Absolute Sale involving the five parcels of land, it would pay respondents Tan and

Obiedo P10,000,000.00 as liquidated damages inclusive of costs and attorneys fees. Petitioner would
likewise pay respondents Tan and Obiedo the condoned interests, surcharges and penalties. [10] Finally,
should a contest arise from the Memorandum of Agreement, Mr. Ruben Sia (Sia), President of petitioner
corporation, personally assumes, jointly and severally with petitioner, the latters monetary obligation to
respondent Tan and Obiedo.
Respondent Atty. Tomas A. Reyes (Reyes) was the Notary Public who notarized the Memorandum
of Agreement dated 17 March 2005 between respondent Tan and Obiedo, on one hand, and petitioner, on
the other.
Pursuant to the Memorandum of Agreement, petitioner, represented by Mr. Sia, executed
separate Deeds of Absolute Sale,[11] over the five parcels of land, in favor of respondents Tan and
Obiedo. On the blank spaces provided for in the said Deeds, somebody wrote the 3rd of January 2006 as
the date of their execution. The Deeds were again notarized by respondent Atty. Reyes also on 3
January 2006.
Without payment having been made by petitioner on 31 December 2005, respondents Tan and
Obiedo presented the Deeds of Absolute Sale dated 3 January 2006 before the Register of Deeds of
Naga City on 8 March 2006, as a result of which, they were able to secure TCTs over the five parcels of
land in their names.
On 16 March 2006, petitioner filed before the RTC a Complaint [12] against respondents Tan,
Obiedo, and Atty. Reyes, for declaration of nullity of deeds of sales and damages, with prayer for the
issuance of a writ of preliminary injunction and/or temporary restraining order (TRO). The Complaint was
docketed as Civil Case No. 2006-0030.
On the basis of the facts already recounted above, petitioner raised two causes of action in its
Complaint.
As for the first cause of action, petitioner alleged that as early as 27 December 2005, its
President already wrote a letter informing respondents Tan and Obiedo of the intention of petitioner to pay
its loan and requesting a meeting to compute the final amount due. The parties held meetings on 3 and 4
January 2006 but they failed to arrive at a mutually acceptable computation of the final amount of loan
payable. Respondents Tan
dialogues.

and

Obiedo

then

refused

the

request

of

petitioner

for further

Unbeknownst to petitioner, despite the ongoing meetings, respondents Tan and Obiedo, in

evident bad faith, already had the pre-executed Deeds of Absolute Sale notarized on 3 January 2006by

respondent Atty. Reyes. Atty. Reyes, in connivance with respondents Tan and Obiedo, falsely made it
appear in the Deeds of Absolute Sale that Mr. Sia had personally acknowledged/ratified the said Deeds
before Atty. Reyes.
Asserting that the Deeds of Absolute Sale over the five parcels of land were executed merely as
security for the payment of its loan to respondents Tan and Obiedo; that the Deeds of Absolute Sale,
executed in accordance with the Memorandum of Agreement, constituted pactum commisorium and as
such, were null and void; and that the acknowledgment in the Deeds of Absolute Sale were falsified,
petitioner averred:
13.
That by reason of the fraudulent actions by the [herein respondents],
[herein petitioner] is prejudiced and is now in danger of being deprived, physically and
legally, of the mortgaged properties without benefit of legal processes such as the
remedy of foreclosure and its attendant procedures, solemnities and remedies available
to a mortgagor, while [petitioner] is desirous and willing to pay its obligation and have the
mortgaged properties released.[13]

In support of its second cause of action, petitioner narrated in its Complaint that on 18 January
2006, respondents Tan and Obiedo forcibly took over, with the use of armed men, possession of the five
parcels of land subject of the falsified Deeds of Absolute Sale and fenced the said properties with barbed
wire. Beginning 3 March 2006, respondents Tan and Obiedo started demolishing some of the commercial
spaces

standing

on

the

parcels

of

land

in

question

which

were

being

rented

out

by

petitioner. Respondents Tan and Obiedo were also about to tear down a principal improvement on the
properties consisting of a steel-and-concrete structure housing a motor vehicle terminal operated by
petitioner. The actions of respondents Tan and Obiedo were to the damage and prejudice of petitioner
and its tenants/lessees. Petitioner, alone, claimed to have suffered at leastP300,000.00 in actual
damages by reason of the physical invasion by respondents Tan and Obiedo and their armed goons of
the five parcels of land.
Ultimately, petitioners prayer in its Complaint reads:
WHEREFORE, premises considered, it is most respectfully prayed of this
Honorable Court that upon the filing of this complaint, a 72-hour temporary restraining
order be forthwith issued ex parte:
(a) Restraining [herein respondents] Tan and Obiedo, their agents, privies or
representatives, from committing act/s tending to alienate the mortgaged properties from
the [herein petitioner] pending the resolution of the case, including but not limited to the
acts complained of in paragraph 14, above;

(b) Restraining the Register of Deeds of Naga City from entertaining moves by
the [respondents] to have [petitioners] certificates of title to the mortgaged properties
cancelled and changed/registered in [respondents] Tans and Obiedos names, and/or
released to them;
(c) After notice and hearing, that a writ of preliminary injunction be issued
imposing the same restraints indicated in the next preceding two paragraphs of this
prayer; and
(d) After trial, judgment be rendered:
1.

Making the injunction permanent;

2.
Declaring the provision in the Memorandum of Agreement requiring the
[petitioner] to execute deed of sales (sic) in favor of the [respondents Tan and Obiedo]
as dacion en pago in the event of non-payment of the debt as pactum commissorium;
3.
Annulling the Deed[s] of Sale for TCT Nos. 29918, 38374, 38376, 39225
and 39232, all dated January 3, 2006, the same being in contravention of law;
4.
Ordering the [respondents] jointly and solidarily to pay the [petitioner] actual
damages of at least P300,000.00; attorneys fees in the amount of P100,000.00 plus
P1,000.00 per court attendance of counsel as appearance fee; litigation expenses in the
amount of at least P10,000.00 and exemplary damages in the amount of P300,000.00,
plus the costs.
[Petitioner] further prays for such other reliefs as may be proper, just and
equitable under the premises.[14]

Upon filing its Complaint with the RTC on 16 March 2006, petitioner paid the sum of P13,644.25 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[15] to the Complaint of petitioner. Respondent Tan did admit
that meetings were held with Mr. Sia, as the representative of petitioner, to thresh out Mr. Sias charge
that the computation by respondents Tan and Obiedo of the interests, surcharges and penalties accruing
on the loan of petitioner was replete with errors and uncertainties. However, Mr. Sia failed to back up his
accusation of errors and uncertainties and to present his own final computation of the amount
due. Disappointed and exasperated, respondents Tan and Obiedo informed Mr. Sia that they had already
asked respondent Atty. Reyes to come over to notarize the Deeds of Absolute Sale. Respondent Atty.
Reyes asked Mr. Sia whether it was his signature appearing above his printed name on the Deeds of
Absolute Sale, to which Mr. Sia replied yes. On 4 January 2006, Mr. Sia still failed to establish his claim
of errors and uncertainties in the computation of the total amount which petitioner must pay respondent
Tan and Obiedo. Mr. Sia, instead, sought a nine-month extension for paying the loan obligation of

petitioner and the reduction of the interest rate thereon to only one percent (1%) per month. Respondents
Tan and Obiedo rejected both demands.
Respondent Tan maintained that the Deeds of Absolute Sale were not executed merely as
securities for the loan of petitioner. The Deeds of Absolute Sale over the five parcels of land were the
consideration for the payment of the total indebtedness of petitioner to respondents Tan and Obiedo, and
the condonation of the 15-month interest which already accrued on the loan, while providing petitioner
with the golden opportunity to still redeem all or even portions of the properties covered by said
Deeds. Unfortunately, petitioner failed to exercise its right to redeem any of the said properties.
Belying that they forcibly took possession of the five parcels of land, respondent Tan alleged that
it was Mr. Sia who, with the aid of armed men, on board a Sports Utility Vehicle and a truck, rammed into
the personnel of respondents Tan and Obiedo causing melee and disturbance. Moreover, by the
execution of the Deeds of Absolute Sale, the properties subject thereof were, ipso jure, delivered to
respondents Tan and Obiedo. The demolition of the existing structures on the properties was nothing but
an exercise of dominion by respondents Tan and Obiedo.
Respondent Tan, thus, sought not just the dismissal of the Complaint of petitioner, but also the
grant of his counterclaim. The prayer in his Answer is faithfully reproduced below:
Wherefore, premises considered, it is most respectfully prayed that, after due
hearing, judgment be rendered dismissing the complaint, and on the counterclaim,
[herein petitioner] and Ruben Sia, be ordered to indemnify, jointly and severally [herein
respondents Tan and Obiedo] the amounts of not less than P10,000,000.00 as liquidated
damages and the further sum of not less than P500,000.00 as attorneys fees. In the
alternative, and should it become necessary, it is hereby prayed that [petitioner] be
ordered to pay herein [respondents Tan and Obiedo] the entire principal loan
of P95,700,620.00, plus interests, surcharges and penalties computed from March 17,
2005 until the entire sum is fully paid, including the amount of P74,678,647.00 foregone
interest covering the period from October 1, 2004 to December 31, 2005 or for a total of
fifteen (15) months, plus incidental expenses as may be proved in court, in the event that
Annexes G to L be nullified. Other relief and remedies as are just and equitable under
the premises are hereby prayed for.[16]

Thereafter, respondent Tan filed before the RTC an Omnibus Motion in which he contended that
Civil Case No. 2006-0030 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. Hence,
respondent Tan asked the RTC to issue an order requiring petitioner to pay the correct and accurate

docket fees pursuant to Section 7(a), Rule 141 of the Rules of Court, as amended; and should petitioner
fail to do so, to deny and dismiss the prayer of petitioner for the annulment of the Deeds of Absolute Sale
for having been executed in contravention of the law or of the Memorandum of Agreement as pactum
commisorium.
As required by the RTC, the parties submitted their Position Papers on the matter. On 24 March
2006, the RTC issued an Order[17] granting respondent Tans Omnibus Motion. In holding that both
petitioner and respondent Tan must pay docket fees in accordance with Section 7(a), Rule 141 of the
Rules of Court, as amended, the RTC reasoned:
It must be noted that under paragraph (b) 2. of the said Section 7, it is provided
that QUIETING OF TITLE which is an action classified as beyond pecuniary estimation
shall be governed by paragraph (a). Hence, the filing fee in an action for Declaration of
Nullity of Deed which is also classified as beyond pecuniary estimation, must be
computed based on the provision of Section 7(A) herein-above, in part, quoted.
Since [herein respondent], Romeo Tan in his Answer has a counterclaim against
the plaintiff, the former must likewise pay the necessary filling (sic) fees as provided for
under Section 7 (A) of Amended Administrative Circular No. 35-2004 issued by the
Supreme Court.[18]

Consequently, the RTC decreed on the matter of docket/filing fees:

WHEREFORE, premises considered, the [herein petitioner] is hereby ordered to
pay additional filing fee and the [herein respondent], Romeo Tan is also ordered to pay
docket and filing fees on his counterclaim, both computed based on Section 7(a) of the
Supreme Court Amended Administrative Circular No. 35-2004 within fifteen (15) days
from receipt of this Order to the Clerk of Court, Regional Trial Court, Naga City and for
the latter to compute and to collect the said fees accordingly.[19]

Petitioner moved[20] for the partial reconsideration of the 24 March 2006 Order of the RTC,
arguing that Civil Case No. 2006-0030 was principally for the annulment of the Deeds of Absolute Sale
and, as such, incapable of pecuniary estimation. Petitioner submitted that the RTC erred in applying
Section 7(a), Rule 141 of the Rules of Court, as amended, to petitioners first cause of action in its
Complaint in Civil Case No. 2006-0030.
In its Order[21] dated 29 March 2006, the RTC refused to reconsider its 24 March 2006 Order,
based on the following ratiocination:
Analyzing, the action herein pertains to real property, for as admitted by the
[herein petitioner], the deeds of sale in question pertain to real property x x x. The

Deeds of Sale subject of the instant case have already been transferred in the name of
the [herein respondents Tan and Obiedo].
Compared with Quieting of Title, the latter action is brought when there is cloud
on the title to real property or any interest therein or to prevent a cloud from being cast
upon title to the real property (Art. 476, Civil Code of the Philippines) and the plaintiff
must have legal or equitable title to or interest in the real property which is the subject
matter of the action (Art. 447, ibid.), and yet plaintiff in QUIETING OF TITLE is required
to pay the fees in accordance with paragraph (a) of Section 7 of the said Amended
Administrative Circular No. 35-2004, hence, with more reason that the [petitioner] who no
longer has title to the real properties subject of the instant case must be required to pay
the required fees in accordance with Section 7(a) of the Amended Administrative
Circular No. 35-2004 afore-mentioned.
Furthermore, while [petitioner] claims that the action for declaration of nullity of
deed of sale and memorandum of agreement is one incapable of pecuniary estimation,
however, as argued by the [respondent Tan], the issue as to how much filing and docket
fees should be paid was never raised as an issue in the case of Russell vs. Vestil, 304
SCRA 738.
xxxx
WHEREFORE, the Motion for Partial Reconsideration is hereby DENIED. [22]

In a letter dated 19 April 2006, the RTC Clerk of Court computed, upon the request of counsel for
the petitioner, the additional docket fees petitioner must pay for in Civil Case No. 2006-0030 as directed in
the afore-mentioned RTC Orders. Per the computation of the RTC Clerk of Court, after excluding the
amount petitioner previously paid on 16 March 2006, petitioner must still pay the amount of P720,392.60
as docket fees.[23]
Petitioner, however, had not yet conceded, and it filed a Petition for Certiorari with the Court of
Appeals; the petition was docketed as CA-G.R. SP No. 94800. According to petitioner, the RTC[24] acted
with grave abuse of discretion, amounting to lack or excess of jurisdiction, when it issued its Orders dated
24 March 2006 and 29 March 2006 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. If the Orders would not be revoked, corrected, or rectified, petitioner would suffer grave
injustice and irreparable damage.
On 22 November 2006, the Court of Appeals promulgated its Decision wherein it held that:
Clearly, the petitioners complaint involves not only the annulment of the deeds of
sale, but also the recovery of the real properties identified in the said documents. In
other words, the objectives of the petitioner in filing the complaint were to cancel the
deeds of sale and ultimately, to recover possession of the same. It is therefore a real
action.

Consequently, the additional docket fees that must be paid cannot be assessed
in accordance with Section 7(b). As a real action, Section 7(a) must be applied in the
assessment and payment of the proper docket fee.
Resultantly, there is no grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the court a quo. By grave abuse of discretion is meant
capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, and
mere abuse of discretion is not enough it must be grave. The abuse must be grave and
patent, and it must be shown that the discretion was exercised arbitrarily and despotically.
Such a situation does not exist in this particular case. The evidence is
insufficient to prove that the court a quo acted despotically in rendering the assailed
orders. It acted properly and in accordance with law. Hence, error cannot be attributed
to it.[25]

Hence, the fallo of the Decision of the appellate court reads:

WHEREFORE, the petition for certiorari is DENIED. The assailed Orders of the
court a quo are AFFIRMED.[26]

Without seeking reconsideration of the foregoing Decision with the Court of Appeals, petitioner
filed its Petition for Review on Certiorari before this Court, with a lone assignment of error, to wit:
18.
The herein petitioner most respectfully submits that the Court of Appeals
committed a grave and serious reversible error in affirming the assailed Orders of the
Regional Trial Court which are clearly contrary to the pronouncement of this
Honorable Court in the case of Spouses De Leon v. Court of Appeals, G.R. No.
104796, March 6, 1998, not to mention the fact that if the said judgment is allowed to
stand and not rectified, the same would result in grave injustice and irreparable damage
to herein petitioner in view of the prohibitive amount assessed as a consequence of said
Orders.[27]
In Manchester Development Corporation v. Court of Appeals,[28] the Court explicitly pronounced
that [t]he court acquires jurisdiction over any case only upon the payment of the prescribed docket
fee. Hence, the payment of docket fees is not only mandatory, but also jurisdictional.
In Sun Insurance Office, Ltd. (SIOL) v. Asuncion,[29] the 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.
Relevant to the present controversy are the following provisions under Rule 141 of the Rules of
Court, as amended by A.M. No. 04-2-04-SC [30] and Supreme Court Amended Administrative Circular No.
35-2004[31]:
SEC. 7. Clerks of Regional Trial Courts.
(a)
For filing an action or a permissive OR COMPULSORY counterclaim,
CROSS-CLAIM, or money claim against an estate not based on judgment, or for filing a
third-party, fourth-party, etc. complaint, or a complaint-in-intervention, if the total sum
claimed, INCLUSIVE OF INTERESTS, PENALTIES, SURCHARGES, DAMAGES OF
WHATEVER KIND, AND ATTORNEYS FEES, LITIGATIO NEXPENSES AND COSTS
and/or in cases involving property, the FAIR MARKET value of the REAL property in
litigation STATED IN THE CURRENT TAX DECLARATION OR CURRENT ZONAL
VALUATION OF THE BUREAU OF INTERNAL REVENUE, WHICHEVER IS HIGHER,
OR IF THERE IS NONE, THE STATED VALUE OF THE PROPERTY IN LITIGATION OR
THE VALUE OF THE PERSONAL PROPERTY IN LITIGATION OR THE VALUE OF THE
PERSONAL PROPERTY IN LITIGATION AS ALLEGED BY THE CLAIMANT, is:
[Table of fees omitted.]
If the action involves both a money claim and relief pertaining to property, then
THE fees will be charged on both the amounts claimed and value of property based on
the formula prescribed in this paragraph a.
(b)

For filing:

1.

Actions where the value of the subject matter cannot be estimated

2.
Special civil actions, except judicial foreclosure of mortgage,
EXPROPRIATION PROCEEDINGS, PARTITION AND QUIETING OF TITLE
which will
3.

All other actions not involving property

[Table of fees omitted.]

The docket fees under Section 7(a), Rule 141, in cases involving real property depend on the fair
market value of the same: the higher the value of the real property, the higher the docket fees due. In
contrast, Section 7(b)(1), Rule 141 imposes a fixed or flat rate of docket fees on actions incapable of
pecuniary estimation.
In order to resolve the issue of whether petitioner paid the correct amount of docket fees, it is
necessary to determine the true nature of its Complaint. The dictum adhered to in this jurisdiction is that
the nature of an action is determined by the allegations in the body of the pleading or Complaint itself,
rather than by its title or heading. [32] However, the Court finds it necessary, in ascertaining the true nature
of Civil Case No. 2006-0030, to take into account significant facts and circumstances beyond the
Complaint of petitioner, facts and circumstances which petitioner failed to state in its Complaint but were
disclosed in the preliminary proceedings before the court a quo.
Petitioner persistently avers that its Complaint in Civil Case No. 2006-0030 is primarily for the
annulment of the Deeds of Absolute Sale. Based on the allegations and reliefs in the Complaint alone,
one would get the impression that the titles to the subject real properties still rest with petitioner; and that
the interest of respondents Tan and Obiedo in the same lies only in the Deeds of Absolute Sale sought to
be annulled.
What petitioner failed to mention in its Complaint was that respondents Tan and Obiedo already
had the Memorandum of Agreement, which clearly provided for the execution of the Deeds of Absolute
Sale, registered on the TCTs over the five parcels of land, then still in the name of petitioner . After
respondents Tan and Obiedo had the Deeds of Absolute Sale notarized on 3 January 2006 and presented
the same to Register of Deeds for Naga City on 8 March 2006, they were already issued TCTs over the
real properties in question, in their own names. Respondents Tan and Obiedo have also acquired
possession of the said properties, enabling them, by petitioners own admission, to demolish the
improvements thereon.

It is, thus, suspect that petitioner kept mum about the afore-mentioned facts and circumstances
when they had already taken place before it filed its Complaint before the RTC on 16 March
2006. Petitioner never expressed surprise when such facts and circumstances were established before
the RTC, nor moved to amend its Complaint accordingly. Even though the Memorandum of Agreement
was supposed to have long been registered on its TCTs over the five parcels of land, petitioner did not
pray for the removal of the same as a cloud on its title. In the same vein, although petitioner alleged that
respondents Tan and Obiedo forcibly took physical possession of the subject real properties, petitioner did
not seek the restoration of such possession to itself. And despite learning that respondents Tan and
Obiedo already secured TCTs over the subject properties in their names, petitioner did not ask for the
cancellation of said titles. The only logical and reasonable explanation is that petitioner is reluctant to
bring to the attention of the Court certain facts and circumstances, keeping its Complaint safely worded,
so as to institute only an action for annulment of Deeds of Absolute Sale. Petitioner deliberately avoided
raising issues on the title and possession of the real properties that may lead the Court to classify its case
as a real action.
No matter how fastidiously petitioner attempts to conceal them, the allegations and reliefs it
sought in its Complaint in Civil Case No. 2006-0030 appears to be ultimately a real action, involving as
they do the recovery by petitioner of its title to and possession of the five parcels of land from respondents
Tan and Obiedo.
A real action is one in which the plaintiff seeks the recovery of real property; or, as indicated in
what is now Section 1, Rule 4 of the Rules of Court, a real action is an action affecting title to or recovery
of possession of real property.[33]
Section 7, Rule 141 of the Rules of Court, prior to its amendment by A.M. No. 04-2-04-SC, had a
specific paragraph governing the assessment of the docket fees for real action, to wit:
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.

It was in accordance with the afore-quoted provision that the Court, in Gochan v. Gochan,[34] held
that although the caption of the complaint filed by therein respondents Mercedes Gochan, et al. with the
RTC was denominated as one for specific performance and damages, the relief sought was the
conveyance or transfer of real property, or ultimately, the execution of deeds of conveyance in their favor
of the real properties enumerated in the provisional memorandum of agreement. Under these

circumstances, the case before the RTC was actually a real action, affecting as it did title to or possession
of real property. Consequently, the basis for determining the correct docket fees shall be the assessed
value of the property, or the estimated value thereof as alleged in the complaint. But since Mercedes
Gochan failed to allege in their complaint the value of the real properties, the Court found that the RTC
did not acquire jurisdiction over the same for non-payment of the correct docket fees.
Likewise, in Siapno v. Manalo,[35] the Court disregarded the title/denomination of therein plaintiff
Manalos amended petition as one for Mandamus with Revocation of Title and Damages; and adjudged
the same to be a real action, the filing fees for which should have been computed based on the assessed
value of the subject property or, if there was none, the estimated value thereof. The Court expounded
in Siapno that:
In his amended petition, respondent Manalo prayed that NTAs sale of the
property in dispute to Standford East Realty Corporation and the title issued to the latter
on the basis thereof, be declared null and void. In a very real sense, albeit the amended
petition is styled as one for Mandamus with Revocation of Title and Damages, it is, at
bottom, a suit to recover from Standford the realty in question and to vest in respondent
the ownership and possession thereof. In short, the amended petition is in reality an
action in res or a real action. Our pronouncement in Fortune Motors (Phils.), Inc. vs.
Court of Appeals is instructive. There, we said:
A prayer for annulment or rescission of contract does not
operate to efface the true objectives and nature of the action which
is to recover real property. (Inton, et al., v. Quintan, 81 Phil. 97, 1948)
An action for the annulment or rescission of a sale of real
property is a real action. Its prime objective is to recover said real
property. (Gavieres v. Sanchez, 94 Phil. 760, 1954)
An action to annul a real estate mortgage foreclosure sale is no
different from an action to annul a private sale of real property. (Muoz v.
Llamas, 87 Phil. 737, 1950).
While it is true that petitioner does not directly seek the
recovery of title or possession of the property in question, his
action for annulment of sale and his claim for damages are closely
intertwined with the issue of ownership of the building which, under
the law, is considered immovable property, the recovery of which is
petitioner's primary objective. The prevalent doctrine is that an
action for the annulment or rescission of a sale of real property
does not operate to efface the fundamental and prime objective and
nature of the case, which is to recover said real property. It is a real
action.
Unfortunately, and evidently to evade payment of the correct amount of filing fee,
respondent Manalo never alleged in the body of his amended petition, much less in the
prayer portion thereof, the assessed value of the subject res, or, if there is none, the
estimated value thereof, to serve as basis for the receiving clerk in computing and
arriving at the proper amount of filing fee due thereon, as required under Section 7 of this

Courts en banc resolution of 04 September 1990 (Re: Proposed Amendments to Rule

141 on Legal Fees).
Even the amended petition, therefore, should have been expunged from the
records.
In fine, we rule and so hold that
jurisdiction over its Civil Case No. Q-95-24791.[36]

the

trial

court

never

acquired

It was in Serrano v. Delica,[37] however, that the Court dealt with a complaint that bore the most
similarity to the one at bar. Therein respondent Delica averred that undue influence, coercion, and
intimidation were exerted upon him by therein petitioners Serrano, et al. to effect transfer of his
properties. Thus, Delica filed a complaint before the RTC against Serrano, et al., praying that the special
power of attorney, the affidavit, the new titles issued in the names of Serrano, et al., and the contracts of
sale of the disputed properties be cancelled; that Serrano, et al. be ordered to pay Delica, jointly and
severally, actual, moral and exemplary damages in the amount of P200,000.00, as well as attorneys fee
of P200,000.00 and costs of litigation; that a TRO and a writ of preliminary injunction be issued ordering
Serrano, et al. to immediately restore him to his possession of the parcels of land in question; and that
after trial, the writ of injunction be made permanent. The Court dismissed Delicas complaint for the
following reasons:
A careful examination of respondents complaint is that it is a real action.
In Paderanga vs. Buissan, we held that in a real action, the plaintiff seeks the recovery
of real property, or, as stated in Section 2(a), Rule 4 of the Revised Rules of Court, a real
action is one affecting title to real property or for the recovery of possession of, or for
partition or condemnation of, or foreclosure of a mortgage on a real property.
Obviously, respondents complaint is a real action involving not only the recovery
of real properties, but likewise the cancellation of the titles thereto.
Considering that respondents complaint is a real action, the Rule requires that
the assessed value of the property, or if there is none, the estimated value thereof shall
be alleged by the claimant and shall be the basis in computing the fees.
We note, however, that neither the assessed value nor the estimated value of
the questioned parcels of land were alleged by respondent in both his original and
amended complaint. What he stated in his amended complaint is that the disputed
realties have a BIR zonal valuation of P1,200.00 per square meter. However, the alleged
BIR zonal valuation is not the kind of valuation required by the Rule. It is the assessed
value of the realty. Having utterly failed to comply with the requirement of the Rule that he
shall allege in his complaint the assessed value of his real properties in controversy, the
correct docket fee cannot be computed. As such, his complaint should not have been
accepted by the trial court. We thus rule that it has not acquired jurisdiction over the
present case for failure of herein respondent to pay the required docket fee. On this
ground alone, respondents complaint is vulnerable to dismissal. [38]

Brushing aside the significance of Serrano, petitioner argues that said decision, rendered by the
Third Division of the Court, and not by the Court en banc, cannot modify or reverse the doctrine laid down
in Spouses De Leon v. Court of Appeals.[39] Petitioner relies heavily on the declaration of this Court
in Spouses De Leon that an action for annulment or rescission of a contract of sale of real property is
incapable of pecuniary estimation.
The Court, however, does not perceive a contradiction between Serrano and the Spouses De
Leon. The Court calls attention to the following statement in Spouses De Leon: A review of the
jurisprudence of this Court indicates that in determining whether an action is one the subject matter of
which is not capable of pecuniary estimation, this Court has adopted the criterion of first ascertaining the
nature of the principal action or remedy sought. Necessarily, the determination must be done on a caseto-case basis, depending on the facts and circumstances of each. What petitioner conveniently ignores is
that in Spouses De Leon, the action therein that private respondents instituted before the RTC was solely
for annulment or rescission of the contract of sale over a real property. [40] There appeared to be no
transfer of title or possession to the adverse party. Their complaint simply prayed for:
1. Ordering the nullification or rescission of the Contract of Conditional Sale
(Supplementary Agreement) for having violated the rights of plaintiffs (private
respondents) guaranteed to them under Article 886 of the Civil Code and/or violation of
the terms and conditions of the said contract.
2. Declaring void ab initio the Deed of Absolute Sale for being absolutely
simulated; and
3. Ordering defendants (petitioners) to pay plaintiffs (private respondents)
attorney's fees in the amount of P100,000.00.[41]

As this Court has previously discussed herein, the nature of Civil Case No. 2006-0030 instituted
by petitioner before the RTC is closer to that of Serrano, rather than ofSpouses De Leon, hence, calling
for the application of the ruling of the Court in the former, rather than in the latter.
It is also important to note that, with the amendments introduced by A.M. No. 04-2-04-SC, which
became effective on 16 August 2004, the paragraph in Section 7, Rule 141 of the Rules of Court,
pertaining specifically to the basis for computation of docket fees for real actions was deleted. Instead,
Section 7(1) of Rule 141, as amended, provides that in cases involving real property, the FAIR
MARKET value of the REAL property in litigation STATED IN THE CURRENT TAX DECLARATION OR
CURRENT ZONAL VALUATION OF THE BUREAU OF INTERNAL REVENUE, WHICH IS HIGHER, OR
IF THERE IS NONE, THE STATED VALUE OF THE PROPERTY IN LITIGATION x x x shall be the basis

for the computation of the docket fees. Would such an amendment have an impact on Gochan, Siapno,
and Serrano? The Court rules in the negative.
A real action indisputably involves real property. The docket fees for a real action would still be
determined in accordance with the value of the real property involved therein; the only difference is in
what constitutes the acceptable value. In computing the docket fees for cases involving real properties,
the courts, instead of relying on the assessed or estimated value, would now be using the fair market
value of the real properties (as stated in the Tax Declaration or the Zonal Valuation of the Bureau of
Internal Revenue, whichever is higher) or, in the absence thereof, the stated value of the same.
In sum, the Court finds that the true nature of the action instituted by petitioner against
respondents is the recovery of title to and possession of real property. It is a real action necessarily
involving real property, the docket fees for which must be computed in accordance with Section 7(1), Rule
141 of the Rules of Court, as amended. The Court of Appeals, therefore, did not commit any error in
affirming the RTC Orders requiring petitioner to pay additional docket fees for its Complaint in Civil Case
No. 2006-0030.
The Court does not give much credence to the allegation of petitioner that if the judgment of the
Court of Appeals is allowed to stand and not rectified, it would result in grave injustice and irreparable
injury to petitioner in view of the prohibitive amount assessed against it. It is a sweeping assertion which
lacks evidentiary support. Undeniably, before the Court can conclude that the amount of docket fees is
indeed prohibitive for a party, it would have to look into the financial capacity of said party. It baffles this
Court that herein petitioner, having the capacity to enter into multi-million transactions, now stalls at
paying P720,392.60 additional docket fees so it could champion before the courts its rights over the
disputed real properties. Moreover, even though the Court exempts individuals, as indigent or pauper
litigants, from paying docket fees, it has never extended such an exemption to a corporate entity.

WHEREFORE, premises considered, the instant Petition for Review is hereby DENIED. The
Decision, dated 22 November 2006, of the Court of Appeals in CA-G.R. SP No. 94800, which affirmed the
Orders dated 24 March 2006 and 29 March 2006 of the RTC, Branch 22, of Naga City, in Civil Case No.
RTC-2006-0030, ordering petitioner Ruby Shelter Builders and Realty Development Corporation to pay
additional docket/filing fees, computed based on Section 7(a), Rule 141 of the Rules of Court, as
amended, is hereby AFFIRMED. Costs against the petitioner.
SO ORDERE