G.R. No. 150780 May 5, 2006
In turn, on November 5, 1990,
NESTLE PHILIPPINES, INC., Petitioner,
vs.
FY SONS, INCORPORATED, Respondent.
DECISION
CORONA, J.:
This is a petition for review on certiorari under Rule 45 of the
Rules of Court assailing the decision1 of the Court of Appeals
(CA) in CA-G.R. CV No. 57299 dated January 11, 2001 which in
turn affirmed with modification the decision of Branch 57 of
the Regional Trial Court (RTC) of Makati City in Civil Case No.
90-3169,2 as well as the CA’s resolution3 dated November 14,
2001 which denied petitioner’s motion for reconsideration.
The antecedent facts follow.
Petitioner is a corporation engaged in the manufacture and
distribution of all Nestle products nationwide. Respondent,
on the other hand, is a corporation engaged in trading,
marketing, selling and distributing food items to restaurants
and food service outlets. On December 23, 1998, petitioner
and respondent entered into a distributorship agreement
(agreement) whereby petitioner would supply its products for
respondent to distribute to its food service outlets. A deed of
assignment was also executed by respondent in favor of
petitioner on December 13, 1988, assigning the time deposit
of a certain Calixto Laureano in the amount of P500,000 to
secure respondent’s credit purchases from petitioner. A
special power of attorney was likewise executed by Laureano
authorizing the respondent to use the time deposit as
collateral.
The areas covered by the agreement were Baguio, Dagupan,
Angeles, Bulacan, Pampanga, Urdaneta, La Union, Tarlac and
Olongapo. At the end of 1989, the agreement expired and the
parties executed a renewal agreement on January 22, 1990. A
supplemental agreement was executed on June 27, 1990, to
take effect on July 1, 1990.
On July 2, 1990, petitioner fined respondent P20,000 for
allegedly selling 50 cases of Krem-Top liquid coffee creamer to
Lu Hing Market, a retail outlet in Tarlac. This was purportedly
proscribed by the agreement. Respondent paid the fine. In
September 1990, Krem-Top liquid coffee creamer was sold to
Augustus Bakery and Grocery, an act again allegedly in
violation of the agreement. Petitioner imposed a P40,000 fine
which respondent refused to pay.
On October 19, 1990, respondent, through counsel, wrote
petitioner to complain about the latter’s breaches of their
agreement and the various acts of bad faith committed by
petitioner against respondent. Respondent demanded the
payment of damages.
petitioner sent respondent a demand letter and notice of
termination, alleging that the latter had outstanding accounts
of P995,319.81. When the alleged accounts were not settled,
petitioner applied the P500,000 time deposit as partial
payment.
Respondent filed a complaint for damages against petitioner,
alleging bad faith.4 According to respondent:
… [petitioner] made representations and promises of
rendering support, including marketing support, assignment
of representatives by way of assistance in its development
efforts, and assurances of income in a marketing area not
previously developed. Thus, [respondent] was lured into
executing a distributorship agreement with the [petitioner]….
[Respondent] thereby invested huge sums of money, time and
efforts to abide by such distributorship agreement, and to
develop market areas for [petitioner’s] products. Thereafter,
the [petitioner] breached the distributorship agreement by
committing various acts of bad faith such as: failing to provide
promotional support; deliberately failing to promptly supply
the [respondent] with the stocks for its orders; intentionally
diminishing the [respondent’s] sales by supporting a non-
distributor; and concocting falsified charges to cause the
termination of the distributorship agreement without just
cause. By such termination, [petitioner] would be able to
obtain the market gains made by [respondent] at the latter’s
own efforts and expenses. When [respondent] complained to
[petitioner] about the latter’s acts of bad faith, the latter
terminated the agreement on the allegation that
[respondent] did not pay its accounts. [Petitioner] also seized
[respondent’s] time deposit collateral without basis;
penalized [respondent] with monetary penalty for the
concocted charge; and unilaterally suspended the supply of
stocks to [respondent].5
Respondent sought actual damages of P1,000,000, moral
damages of P200,000, exemplary damages of P100,000,
attorney’s fees of P100,000, plus the return of the P500,000
time deposit and costs of suit. In its answer, petitioner
interposed a counterclaim for P495,319.81 representing the
balance of respondent’s overdue accounts, with interest of
2% per month from the date of default until fully paid, moral
damages of P100,000, exemplary damages of P200,000,
attorney’s fees of P120,000 and costs of suit.
In a decision dated November 10, 1997, the Makati City RTC
ruled in favor of the respondent:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of the plaintiff and against the defendant
ordering the defendant to pay plaintiff the following:
1. The amount of P1,000,000.00 as actual damages
sustained by the plaintiff by reason of the
 unwarranted and illegal acts of the defendant in
terminating the distributorship agreement;
2. The amount of P100,000.00 as exemplary
damages;
3. The amount of P100,000.00 as attorney’s fees;
The plaintiff however, is hereby ordered to pay the defendant
the amount of P53,214,26 (sic) which amount has been
established as the amount the defendant is entitled from the
plaintiff.
Three-fourths costs against the defendant.
.
SO ORDERED. 6
Petitioner appealed the decision to the CA. On January 11,
2001, the CA rendered a decision affirming the RTC’s decision
with modification:
WHEREFORE, the judgment appealed from is AFFIRMED with
the following MODIFICATIONS: (1) the actual damages is
INCREASED from P1,000,000.00 to P1,500,000.00;7 and (2)
the amount of P53,214.26 payable by the appellee to the
appellant is DELETED.
SO ORDERED.8
Both the CA and the RTC found, among others, that petitioner
indeed failed to provide support to respondent, its
distributor; that petitioner unjustifiably refused to deliver
stocks to respondent; that the imposition of the P20,000 fine
was void for having no basis; that petitioner failed to prove
respondent’s alleged outstanding obligation; that petitioner
terminated the agreement without sufficient basis in law or
equity and in bad faith; and that petitioner should be held
liable for damages.
Hence this petition raising the following grounds:
(1)
THE [CA] COMMITTED A GRAVE ERROR IN LAW WHEN IT
RULED THAT: "THE RATIOCINATIONS OF THE APPELLANT AS
TO THE APPELLEE’S ALLEGED VIOLATION OF THE CONTRACT
ARE THUS WEAK AND UNCONVINCING" AND "THE
APPELLEE’S ALLEGED NON-PAYMENT AND OUTSTANDING
BALANCE OF P995,319.81 WAS NOT SUFFICIENTLY PROVEN"
DESPITE THE FACT THAT FLORENTINO YUE, JR., THE MANAGER
OF THE RESPONDENT ADMITTED IN OPEN COURT IN ANSWER
TO THE QUESTION OF THEN PRESIDING JUDGE PHINNY C.
ARAQUIL THAT THE DISTRIBUTORSHIP AGREEMENT WAS
TERMINATED BY YOUR PETITIONER BECAUSE OF THE UNPAID
BALANCE OF THE RESPONDENT OF AROUND P900,000.00.
(2)
THE [CA] COMMITTED A GRAVE ERROR IN LAW IN
DISREGARDING THE TESTIMONY OF THE WITNESS FOR THE
PETITIONER, CRISTINA RAYOS WHO PREPARED THE
STATEMENT OF ACCOUNT (EXHIBIT 11) ON THE GROUNDS
THAT SHE WAS NOT INVOLVED IN THE DELIVERY AS SHE WAS
ONLY IN CHARGE OF THE RECORDS AND DOCUMENTS OF ALL
ACCOUNTS RECEIVABLES AS PART OF HER DUTIES AS CREDIT
AND COLLECTION MANAGER CONSIDERING THAT THE
EVIDENCE PRESENTED WAS AN EXCEPTION TO THE HEARSAY
RULE UNDER SECTION 45 (SIC), RULE 130, OF THE REVISED
RULES ON EVIDENCE.
(3)
THE [CA] COMMITTED A GRAVE ERROR IN LAW IN AWARDING
TO THE RESPONDENT ACTUAL DAMAGES IN THE AMOUNT
OF P1,000,000.00 AND ORDERING THE REFUND OF THE
AMOUNT OF P500,000.00 REPRESENTING THE TIME DEPOSIT
OF THE RESPONDENT WHICH WAS ASSIGNED AS SECURITY
FOR THE RESPONDENT’S CREDIT LINE BECAUSE THE
PETITIONER HAD THE RIGHT TO TERMINATE THE
DISTRIBUTORSHIP AGREEMENT UNDER ART. 1191 OF THE
CIVIL CODE AND PARAGRAPHS 5 AND 22 OF THE
DISTRIBUTORSHIP AGREEMENT BECAUSE OF THE FAILURE OF
THE RESPONDENT TO SETTLE ITS ACCOUNT IN THE AMOUNT
OF P995,319.81 AND THAT THE EVIDENCE SUBMITTED BY THE
RESPONDENT ON THE ALLEGED ACTUAL DAMAGES IT
SUSTAINED AS A RESULT OF THE TERMINATION OF THE
DISTRIBUTORSHIP AGREEMENT (EXHIBIT 5) AND COMPANION
EXHIBITS WERE MERELY SPECULATIVE AND DID NOT HAVE
PROBATIVE VALUE.
(4)
THE [CA] COMMITTED A GRAVE ERROR IN LAW FOR NOT
AWARDING TO THE PETITIONER ITS COUNTERCLAIM.9
On the first issue, petitioner asserts that respondent’s
witness, Florentino Yue, Jr., a director and officer of
respondent corporation, admitted in open court that the
respondent had an unpaid obligation to petitioner in the
amount of "around P900,000."10
Respondent counters that this statement was merely in
answer to the question of the presiding judge on what ground
petitioner supposedly terminated the agreement. The witness
was not being asked, nor was he addressing, the truth of such
ground. In fact, this witness later testified that "(petitioner)
wrote us back saying that they (had) terminated my contract
and that I owe(d) them something like P900,000."11
Petitioner’s argument is palpably without merit and deserves
scant consideration. It quoted Mr. Yue’s statement in isolation
from the rest of his testimony and took it out of context.
Obviously, Yue’s statement cannot be considered a judicial
admission that respondent had an unpaid obligation
of P900,000 and that the agreement had been terminated for
this reason.
On the second issue, petitioner argues that the CA should not
have disregarded the testimony of petitioner’s witness,
Cristina Rayos, who prepared the statement of account on the
basis of the invoices and delivery orders corresponding to the
alleged overdue accounts of respondent.12 The CA ruled that
petitioner was not able to prove that respondent indeed had
unpaid accounts, saying, among others, that the testimony of
Rayos constituted incompetent evidence:
xxx the appellee’s alleged non-payment and outstanding
balance of P995,319.81 was not sufficiently proven.
xxx xxx xxx
Anyway, the appellant’s Statement of Account showing such
alleged unpaid balance is undated, and it does not show
receipt thereof by the appellee, and when, if such indeed was
received. Moreover, there are no supporting documents to
sustain such unpaid accounts. The witness for the appellant
who prepared the Statement, Cristina Rayos, in fact admitted
that the Invoices corresponding to the alleged overdue
accounts are not signed. Her explanation was that there were
DO’s or Delivery Orders covering the transactions. However,
she did not identify the signatures appearing on the Delivery
Orders marked as Exhibits "13-A", "14-A", "15-A" and "16-A"
as the persons who received the goods for the appellant. In
any case, she could not have identified the same, for she was
not involved in the delivery, as she is only in charge of the
records and documents on all accounts receivables as part of
her duties as Credit and Collection Manager. 13
Petitioner contends that the testimony of Rayos was an
exception to the hearsay rule under Section 43, Rule 130 of
the Rules of Court:14
Entries in the course of business. — Entries made at, or near
the time of the transactions to which they refer, by a person
deceased, or unable to testify, who was in a position to know
the facts therein stated, may be received as prima
facie evidence, if such person made the entries in his
professional capacity or in the performance of duty and in the
ordinary or regular course of business or duty.1avvphil.net
Petitioner’s contention has no merit.
The provision does not apply to this case because it does not
involve entries made in the course of business. Rayos testified
on a statement of account she prepared on the basis of
invoices and delivery orders which she, however, knew
nothing about. She had no personal knowledge of the facts on
which the accounts were based since, admittedly, she was not
involved in the delivery of goods and was merely in charge of
the records and documents of all accounts receivable as part
of her duties as credit and collection manager. 15 She thus
knew nothing of the truth or falsity of the facts stated in the
invoices and delivery orders, i.e., whether such deliveries
were in fact made in the amounts and on the dates stated, or
whether they were actually received by respondent. She was
not even the credit and collection manager during the period
the agreement was in effect.16 This can only mean that she
merely obtained these documents from another without any
personal knowledge of their contents.
The foregoing shows that Rayos was incompetent to testify on
whether or not the invoices and delivery orders turned over
to her correctly reflected the details of the deliveries made.
Thus, the CA correctly disregarded her testimony.
Furthermore, the invoices and delivery orders presented by
petitioner were self-serving. Having generated these
documents, petitioner could have easily fabricated them.
Petitioner’s failure to present any competent witness to
identify the signatures and other information in those
invoices and delivery orders cast doubt on their veracity.
Petitioner next argues that respondent did not deny during
the trial that it received the goods covered by the invoices
and was therefore deemed to have admitted the same.17 This
argument cannot be taken seriously. From the very beginning,
respondent’s position was that petitioner concocted falsified
charges of non-payment to justify the termination of their
agreement.18 In no way could respondent be deemed to have
admitted those deliveries.
On the third issue, petitioner questions the award of actual
damages in the amount of P1,000,000 and the refund of
the P500,000 time deposit, contending that it validly
terminated the agreement because of respondent’s failure to
pay its overdue accounts.
As discussed above, the CA declared that petitioner was not
able to prove that respondent had unpaid accounts, thus
debunking the claim of a valid termination. The CA also held
petitioner guilty of various acts which violated the provisions
of the agreement.19 Consequently, for petitioner’s breach of
the agreement, the CA awarded actual damages to
respondent in the amount of P1,000,000. Petitioner, other
than claiming that it validly terminated the agreement, did
not challenge the findings of the CA that it committed various
violations of the agreement. Hence, there was legal basis for
the grant of actual damages.
Petitioner asserts that the documentary evidence presented
by respondent to prove actual damages in the amount
of P4,246,015.60 should not have been considered because
respondent’s complaint only prayed for an award
of P1,000,000. It further contends that the court acquires
jurisdiction over the claim only upon payment of the
prescribed docket fee.20
Indeed, a court acquires jurisdiction over the claim of Costs against petitioner.
damages upon payment of the correct docket fees. 21 In this
case, it is not disputed that respondent paid docket fees SO ORDERED.
based on the amounts prayed for in its complaint.
Respondent adduced evidence to prove its losses. It was
proper for the CA and the RTC to consider this evidence and
award the sum of P1,000,000. Had the courts below awarded
a sum more than P1,000,000, which was the amount prayed
for, an additional filing fee would have been assessed and
imposed as a lien on the judgment.22However, the courts
limited their award to the amount prayed for.

Both the RTC and CA found that respondent had satisfactorily

proven the factual bases for the damages adjudged against
the petitioner. This is a factual matter binding and conclusive
upon this Court.23 It is well-settled that –

. . . findings of fact of the trial court, when affirmed by the

Court of Appeals, are binding upon the Supreme Court. This
rule may be disregarded only when the findings of fact of the
Court of Appeals are contrary to the findings and conclusions
of the trial court, or are not supported by the evidence on
record. But there is no ground to apply this exception to the
instant case. This Court will not assess all over again the
evidence adduced by the parties particularly where as in this
case the findings of both the trial court and the Court of
Appeals completely coincide.24

Likewise, the determination of the amount of damages

commensurate with the factual findings upon which it is
based is primarily the task of the trial court. 25 Considering
that the amount adjudged is not excessive, we affirm its
correctness.

Moreover, given that petitioner was not able to prove that

respondent had unpaid accounts in the amount
of P995,319.81, the seizure of the P500,000 time deposit was
improper. As a result, the refund of this amount with interest
is also called for.

Finally, petitioner’s counterclaims are necessarily without

merit. It failed to prove the alleged outstanding accounts of
respondent. Accordingly, it is not entitled to the supposed
unpaid balance of P495,319.81 with interest.

Petitioner, being at fault and in bad faith, and there being no

proof that respondent was guilty of any wrongdoing, cannot
claim moral and exemplary damages and attorney’s fees from
respondent.

In fine, we find no error in the assailed decision and

resolution of the CA. We therefore affirm them.

WHEREFORE, the petition is hereby DENIED for lack of merit.

The decision of the Court of Appeals dated January 11, 2001
and resolution dated November 14, 2001 in CA-G.R. CV No.
57299 are hereby AFFIRMED.
G.R. No. 149802 January 20, 2006
ALFONSO T. YUCHENGCO AND Y REALTY
CORPORATION, Petitioners,
vs.
THE HONORABLE SANDIGANBAYAN, FOURTH DIVISION,
REPUBLIC OF THE PHILIPPINES, PRESIDENTIAL COMMISSION
ON GOOD GOVERNMENT, ESTATE OF FERDINAND E.
MARCOS, IMELDA R. MARCOS, PRIME HOLDINGS, INC.,
ESTATE OF RAMON U. COJUANGCO, represented by IMELDA
O. COJUANGCO, and IMELDA O. COJUANGCO, Respondents.
DECISION
CARPIO MORALES, J.:
These five consolidated petitions pray for the nullification of
certain issuances of the Sandiganbayan in Civil Case No. 0002,
"Republic of the Philippines v. Estate of Ferdinand E. Marcos,
et al."
The complaint in Civil Case No. 0002 (or the case) was filed
before the Sandiganbayan on July 16, 1987 by the Republic of
the Philippines (the Republic) through the Presidential
Commission on Good Government (PCGG) against former
President and Mrs. Marcos, their three children, and some
other individuals. The complaint was later amended to
implead additional defendants.
The case is for the recovery of alleged ill-gotten wealth of the
Marcoses, among which are shares of stock in the Philippine
Telecommunications Investment Corporation (PTIC): 76,779
shares in the name of Ramon U. Cojuangco, 21,525 shares in
the name of Imelda O. Cojuangco, and 111,415 shares in the
name of Prime Holdings Incorporated (PHI). PTIC is the
biggest stockholder of PLDT, it owning some 28% of the
outstanding shares in PLDT at the time Civil Case No. 0002
was filed.1
In the course of the proceedings in Civil Case No. 0002, the
first three petitions assailing interlocutory orders of the
Sandiganbayan were filed before this Court.
Thus, the petitions in G.R. Nos. 149802 and 150320, filed by
Alfonso Yuchengco and Y Realty Corporation, complainants-
in-intervention in Civil Case No. 0002, assail via petition for
certiorari orders and resolutions of the Sandiganbayan
denying their motions to suspend trial pending discovery
proceedings and to re-set trial dates (with alternative prayer
for a change in the order of trial), and declaring them as
having waived their right to present evidence.
The petition in G.R. No. 150367, filed by the Republic, assails
via petition for certiorari the Sandiganbayan Orders denying
its Respectful Motion for Additional Time to Complete the
Presentation of Evidence and directing it to submit its offer of
evidence within 30 days.
During the pendency of these first three petitions, the
Sandiganbayan continued with the proceedings in Civil Case
No. 0002, no restraining order enjoining the same having
been issued by this Court.
The Sandiganbayan, still during the pendency of the first three
petitions, promulgated in Civil Case No. 0002 a Partial
Decision on May 6, 2002 the dispositive portion of which
reads:
WHEREFORE, premises considered, the complaint of plaintiff
Republic of the Philippines on the PLDT shares subject of
separate trial is hereby DISMISSED for lack of merit.
The Motion for Summary Judgment [filed by Imelda
Cojuangco, et al] is hereby GRANTED, and the Complaint-in-
Intervention [filed by the Yuchengcos] DISMISSED.
SO ORDERED. (Underscoring supplied)
The last two of the five petitions at bar, both for review on
certiorari, were thereupon filed. The petition in G.R. No.
153207 filed by the complainants-in-intervention Yuchengcos,
and that in G.R. No. 153459 filed by the Republic, both
challenge the Partial Decision.
The incidents that gave rise to the filing of the petitions are
stated in the minority’s dissenting opinion penned by Justice
Cancio Garcia which immediately follows this majority
opinion. The dissenting opinion substantially reiterates the
draft that Justice Garcia prepared which was used by this
Court as a working basis for its deliberations.
In issue in these petitions are:
1. Whether petitioners in G.R. Nos. 149802,
150320 and 150367 were denied due process when
the Sandiganbayan in effect directed them to
terminate the presentation of their respective
evidence; and
2. Whether the Partial Decision being assailed via
petition for review in G.R. Nos. 153207 and 153459,
conforms to the evidence presented, the law and/or
settled jurisprudence.
There is no disagreement with respect to the disposition-
dismissal by the minority of the first three petitions – the first
having become moot, and the second and third for lack of
grave abuse of discretion on the part of the
Sandiganbayan.2 There is also no disagreement with respect
to the disposition-denial by the minority of the fourth petition
(G.R. No. 153207) in the absence of reversible error on the
part of the Sandiganbayan.
It is with respect to the disposition-denial by the minority of
the fifth petition (G.R. No. 153459) insofar as it denied the
prayer of the Republic for a judgment ordering the Estate of
Ramon U. Cojuangco (Cojuangco), Imelda O. Cojuangco, PHI,
their assigns, nominees and agents to reconvey to the
Republic 111,415 PTIC shares registered in the name of PHI
that the majority does not agree, in light of the immediately
following discussions.
The Sandiganbayan having held in its 73-page Partial
Decision3 that the Republic has failed to prove that the PLDT
shares sought to be recovered are ill-gotten, thus:
. . . the Republic has failed to provide such "proof of
authenticity or reliability" of the documents offered by it in
evidence. Thus almost all the documents offered by the
Republic are photocopies, and no effort was undertaken . . .
to submit the originals of said documents, or to have them
properly identified, or to otherwise justify the admission of
mere photocopies. Not surprisingly, defendants . . . objected
to the admission of the Republic’s documentary exhibits,
citing violation of the Best Evidence Rule (Section 3, Rule 130
of the Revised Rules of Civil Procedure ["Rules"], the Rules of
Presentation of Documentary Evidence (Section 20, Rule 132
of the Rules). The Hearsay Evidence Rule, and the rule as to
Purpose/s of Documentary Evidence (Section 34, Rule 132 of
the Rules)."4(Underscoring supplied),
a discussion of the evidence presented in the case is in order.
FACTUAL BACKGROUND OF PHI AND ITS DEALINGS WITH
PTIC
PHI was registered on October 5, 1977 with the following five
(5) incorporators: Jose D. Campos, Jr. (son of Jose Yao
Campos), Rolando Gapud (Gapud), Renato Lirio (Lirio),
Ernesto Abalos (Abalos), and Gervacio Gaviola (Gaviola),
with 400 shares each, with a par value of P100 per share. The
total amount of capital stock subscribed was
thus P200,000.00, P50,000.00 of which was actually paid. 5 Its
place of business was at 66 United Street, Mandaluyong,
Metro Manila.6
The five PHI incorporators, in their capacity as stockholders,
elected themselves as directors on October 10, 1977. On even
date, they elected the following as officers of the corporation:
Rolando C. Gapud - President
Jose D. Campos, Jr. - Vice-President
Gervasio T. Gaviola - Treasurer
Francisco G. De Guzman - Secretary
Rodolfo R. Dimaano - Assistant Secretary
Meanwhile, 54,349 shares in another corporation, PTIC, were
"contributed to and/or abandoned" by one of its
stockholders, General Telephone and Electronics (GTE), an
American corporation, in favor of PTIC.
On December 20, 1977, the PTIC Board of Directors resolved
to sell such 54,349 shares to its stockholders in proportion to
their holdings.7 No stockholder, apart from Cojuangco, PTIC
President and member of its Board of Directors, expressed
interest in purchasing the shares.8 All the 54,349 shares were
then transferred to his name.
Cojuangco and Luis Tirso Rivilla (Rivilla), another stockholder
of PTIC, together with PHI President Gapud, forged an
agreement dated January 27, 1978 referring to the "various
discussions during which [Cojuangco and Rivilla] offered to
sell and [PHI] agreed to purchase partially paid subscriptions
and common shares of [PTIC]."9 The agreement which
indicated the basic terms and conditions of the transaction
states that the number of PTIC shares which Cojuangco and
Rivilla were prepared to sell to PHI was "111,415 common
shares representing 46.1250% of the subscribed and
outstanding shares of PTIC."
On April 20, 1978, the PTIC Board of Directors granted
Cojuangco and Rivilla authorization to transfer their PTIC
shares to PHI.10
Cojuangco thereafter ceded to PHI 77,719 PTIC
shares registered in his name via two separate deeds of
assignment both dated May 2, 1978, one for 44,023 shares
and the other for 33,696 shares.11 Rivilla likewise
conveyed PTIC 33,696 shares registered in his name to PHI via
a deed of assignment also dated May 2, 1978.12Thus, a total
of 111,415 PTIC shares was transferred to PHI on May 2,
1978.
Gapud and Jose D. Campos, Jr. later assigned all their shares
in PHI (400 shares each) to Cojuangco and PTIC Director Oscar
Africa (Africa), respectively, via two separate deeds of
assignment dated February 18, 1981.13
On May 9, 1981, Cojuangco and Africa were elected directors
of PHI, replacing Gapud and Jose D. Campos, Jr., while the
other directors – Lirio, Abalos, and Gaviola – remained as
such.14 On even date, Cojuangco and Africa were elected by
the PHI Board of Directors as President and Vice-President,
respectively, while de Guzman and Gaviola remained as
Secretary and Treasurer, respectively.15
Subsequently, by Deed of Assignment16 dated June 1983 (the
day is not indicated), Africa transferred all his 400 PHI
shares — 240 to Antonio Cojuangco and 160 to Trinidad
Cojuangco Yulo. On even date, the remaining incorporators on
the board of directors – Lirio, Abalos, and Gaviola – each
executed a deed of assignment transferring their PHI shares
to members of the Cojuangco family. Thus Lirio transferred
240 shares to Antonio Cojuangco and 160 to Trinidad C.
Yulo;17 Abalos transferred 320 shares to Ramon O. Cojuangco,
Jr. and 80 to Miguel O. Cojuangco;18 and Gaviola transferred
320 shares to Ma. Victoria O. Cojuangco Yulo and 80 also to
Antonio Cojuangco.19
BENEFICIAL OWNERSHIP OF PHI
Significantly, respondents in G.R. No. 153459, namely: Estate
of Ramon Cojuangco, Imelda O. Cojuangco, PHI, and Imelda R.
Marcos all agree with petitioner Republic that PHI has an
undisclosed beneficial owner, their only disagreement being
who this owner is.
The Cojuangcos and PHI in their Comment proffer that the
beneficial owners are the Cojuangcos, arguing as follows:
x x x The unsupported allegation that President Marcos
owned the disputed shares in PLDT, PTIC and PHI mayperhaps
explain the circumstances surrounding PHI’s incorporation,
why PTIC’s stockholders were disinterested in purchasing
PLDT’s shares in 1977, why PTIC’s stockholders waived their
right of first refusal in 1978, why there are no proper entries
in PHI’s Stock and Transfer Book, or why the subject
shareholdings were not included in Ramon U. Cojuangco’s
Estate inventory. However, the converse syllogism is not true
– the details of PHI’s incorporation, or the fact that PTIC’s
stockholders were disinterested in purchasing PLDT’s shares
in 1977, or that PTIC’s stockholders waived their right of first
refusal in 1978, or that there are no proper entries in PHI’s
Stock and Transfer Book, or that 400 PHI shares were not
included in Ramon U. Cojuangco’s Estate inventory do not
necessarily establish that President Marcos owned the
subject shares in PHI, PTIC and PLDT.
These circumstances show that PHI had an undisclosed
principal and beneficial owner. Subsequent events, i.e.
the assignment of shares in 1981 and 1983, reveal
and confirm that Mr. Ramon U. Cojuangco and his family
were the principal and beneficial owners of PHI, and,
corollarily, the subject PHI, PTIC and PLDT shares, not
President Marcos.20 (Emphasis, italics and underscoring
supplied)
Imelda Marcos, on the other hand, consistent with the theory
of petitioner
SEPARATE DISSENTING OPINION
SANDOVAL-GUTIERREZ, J.:
I join Mr. Justice Cancio C. Garcia in his well-crafted Dissent in
G.R. No. 153459 denying the Republic’s petition and affirming
respondent Sandiganbayan’s Decision.
In civil suits for forfeiture before the Sandiganbayan, like the
instant case, the Republic must meet the burden of proof and
establish with a preponderance of evidence that the
property in question –
". . . are assets and properties purportedly pertaining to
former President Ferdinand E. Marcos and/or his wife Mrs.
Imelda Romualdez Marcos, their close relatives, subordinates,
business associates, dummies, agents or nominees which had
been or were acquired by them directly or indirectly, through
or as a result of the improper or illegal use of funds or
properties owned by the Government of the Philippines or
any of its branches, instrumentalities, enterprises, banks or
financial institutions, or by taking advantage of their office,
authority, influence, connections or relationships, resulting in
their unjust enrichment, and causing damage and prejudice to
the Filipino people and the Republic of the Philippines." 1
The alleged ill-gotten assets in this case are shares of stock in
Prime Holdings Inc. (PHI) which, in turn, holds shares in
Philippine Telecommunications Investment Corporation
(PTIC), a shareholder in the Philippine Long Distance
Telephone Company (PLDT). The Republic’s case is premised
on the theory that PHI is a "dummy corporation," not owned
by private respondent Cojuangco family, but merely held in
beneficial trust for former President Ferdinand E. Marcos.
I have closely reviewed the records and revisited both factual
and legal bases of the Sandiganbayan Decision, and found
that the Republic failed to prove its case by preponderance of
evidence.
The Republic’s case is anchored almost entirely upon the
testimonies of Messrs. Jose Y. Campos, Rolando Gapud and
Francisco de Guzman. They attempted to prove that PHI was a
corporate vehicle "organized for" Marcos. As "beneficial
owner" of PHI, Marcos used Ramon U. Cojuangco as a
"dummy" controlling PHI and its assets.
The same witnesses identified the modus operandi employed
by Marcos to hide his ill-gotten wealth. Unfortunately, the
evidence for the Republic fails to show that PHI is Marcos’
"dummy corporation."
Witness Campos, in describing the modus operandi behind
dummy corporations "organized for" Marcos, stated:
"In the organization, administration and management of the
above-named corporations, as it was my policy that whenever
such a corporation is organized for and on behalf of the
intended beneficiaries, I execute and I require all my said
associates to execute a Deed of Trust or Deed of Assignment
duly signed in favor of an unnamed beneficiary and to
deliver the original copy thereof to the former President. It
is in fact my policy and procedure that we disclaim completely
any interest in any such business and make it clear to the
former President that we hold such interests on his behalf."
In his affidavit, Campos named PHI as one of the companies
he organized for President Marcos. Yet, when asked if
the modus operandi was applied to PHI as it was with the
other Marcos dummy corporations, he vacillated,2 thus:
"3. In your Sworn Statement, page 2, you stated that with
respect to the corporations you held in trust for President
Marcos, it was your ‘policy’ that whenever such a corporation
was organized, you executed, and you required all your
business associates to execute, a Deed of Trust or Deed of
Assignment in favor of an ‘unnamed beneficiary,’ and
delivered the originals thereof to President Marcos. xxx Was
this ‘policy’ FOLLOWED IN THE CASE OF [PHI]? xxx
"Q: Was it the standard operating procedure in Jose Yao
Campos holdings companies that the stock certificates of the
stockholders would be endorsed in blank?
A: Yes, sir.
Q: And who would hold custody or possession of those/ bank
endorsed stock certificates?
A: In the case of many of the corporations I think including
Prime Holdings, Inc. these are not fully paid shares and
therefore, I knew that no stock certificates have been issued,
sir.

ANSWER: ‘All the corporations I organized – that was the Q: So, specifically in the case of Prime Holdings, Inc. there
standard policy – that we surrendered direct to President were no stock certificates issued because the subscriptions
Marcos.’" were not fully paid?

Campos also testified that he had never communicated in A: Yes, sir.

any manner whatsoever with President Marcos, his alleged
principal, nor with Ramon Cojuangco regarding Marcos’
Q: Do you know if the stockholders of Prime Holdings, Inc.,
beneficial ownership of shares of stock in PHI or PTIC or
this is prior to 1981, had executed Deed of Assignment in
Prime Holdings, Inc., thus:
blank for their subscription to PHI shares?

"7. Did you ever have any discussions or correspondences

A: Yes, sir, the standard operating procedure in the
with President Marcos regarding his beneficial ownership or
companies of Mr. Campos is that all the subscribers would
the beneficial ownership by any member of his family, directly
have either a Deed of Assignment signed or a Deed of Trust,
or indirectly, of shares of stock in Philippine Long Distance
sir.
Telephone Company (PLDT), Philippine Telecommunications
Investment Corporation (PTIC) or Prime Holdings, Inc.?
Q: And you are referring to these holding companies that Mr.
Campos, a number of holding companies that Mr. Campos
Answer: No, Ma’am.
have caused to be incorporated, these are the companies?

xxx
A: Yes, sir.

Did you ever have any discussions or correspondences with

Q: You said Deed of Trust, would there be a designated
Ramon U. Cojuangco regarding the beneficial ownership by
trustee?
President Marcos or any member of his family, directly or
indirectly, of shares of stock in PLDT, PTIC or Prime Holdings,
A: No, sir.
Inc.?

Q: So, these are Deeds of Assignment or Deeds of Trust, the

Answer: No, Ma’am."
beneficiary of which would be left blank?
Considering the fact that Campos – by his own admission –
A: Yes, sir.
was the organizer of dummy corporations for Marcos, it is
contrary to human experience that he never had any
discussion with the former President about PHI, if indeed it Q: But the assignors or the trustees or grantors would all sign,
was such a dummy corporation. would all execute these Deeds?

Obviously, there was nothing to discuss with President A: Yes, sir.

Marcos about PHI because it was not one of his dummy
corporations. In fact, the Republic’s other witness, Atty.
Francisco de Guzman, admitted that PHI did not meet the
description of a Marcos dummy corporation, thus, to quote
the very same passage cited in the Dissent:
Q: Who would have possession, you mentioned standard
operating procedure or SOP, under the SOP who would hold
the blank deeds?
A: A copy of which usually two (2) copies are made, sir.
Q: Two (2) originals?
A: No.
Q: Xerox copies?
A: No. One original and one Xerox copy and the original will
be included in the records, sir.
Q: The records of that particular company?
A: Yes, sir, and the other one we give it to the Treasurer.
Q: Of that particular company?
A: No, to Mr. Gaviola, sir.
Q: Mr. Gaviola was the Treasurer of Prime Holdings, Inc.
wasn’t he?
A: I think he is because he is always, was the Treasurer of
many of the companies of Mr. Campos, sir.
Q: So, there is the SOP also, MR. Gervacio Gaviola is the
Treasurer of Prime Holdings, Inc.?
A: Yes, sir.
xxx xxx xxx
Q: Now, who would hold the records of these companies
which would include those blank Deeds of Assignment or
Deeds of Trust?
A: Well, the actual custodian of that will be the Legal
Department who has all the legal files, sir.
Q: Was it not or would you consider it risky that the blank
Deeds of Assignment or blank Deeds of Trust of all the
shares in this companies he right there in the records, be
among the corporate records, that somebody could take
them and put their names?
A: Maybe there is some risk there but you see, sir, the
people in the Legal Department are well trusted by all of us.
They have been with the company for many years and
considering the competence that they have established with
us, nobody would even get those records without, let’s say
order of Mr. Campos or me or the Corporate Secretary, sir.
Q: And who were these trusted people of the Legal
Department?
A: The lawyers, sir.
Q: Could you give us the names?
A; Yes, two of them died and one of them retired. Mr. Urbano
Francisco was the only survivor, sir.
Q: Can I have the names of those who died?
A: Ed Halagao, I cannot remember the other one, sir.
Q: These are the trusted lawyers of the Legal Department of
UNILAB?
A: Yes, sir.
xxx
Q: Do you know what happened to those blank deeds of
Assignment of Deeds of Trust of Prime Holdings, Inc. that
were entrusted with the trusted lawyers of UNILAB?
A: When Prime Holdings, Inc.’s records were delivered, all
those records, all those papers are with the records, sir.
Q: So, you are referring to the 1982 delivery to the
representative of Mr. Ramon U. Cojuangco?
A: Yes, sir, except two (2) Deeds of Assignment which were I
think made directly afterwards when Mr. Gapud and Mr.
Jose Campos, Jr. made the direct assignments to persons
actually designated in the Deeds of Assignment, sir.
Q: Who were those?
A: The shares of Mr. Gapud was (sic) given to Mr. Ramon U.
Cojuangco, Mr. Campos, Jr. I can’t remember to whom he
made the assignment, sir."
If, according to the Republic’s own witness, the shares of a
Marcos dummy corporation are covered by a Deed of
Assignment endorsed to an unnamed beneficiary, then Atty.
De Guzman’s above admissions are fatal to the Republic’s
case. His categorical declaration is that the blank Deeds of
Assignment and Deeds of Trust covering PHI shares were not
delivered to Marcos, but to Ramon U. Cojuangco.
Now, delivery of the blank deeds of Assignment and Deeds of
Trust was a crucial element of the modus operandi.
Considering that Marcos was not in possession of the Deeds
over PHI shares, he could not have controlled or managed
PHI. To be sure, there was no point organizing PHI as a
dummy corporation for Marcos since he could not perform
these functions.
Witness Gapud testified that he assigned his PHI shares to
Ramon U. Cojuangco – not Marcos, thus:
"CONSUL AGUILUCHO: Is it really true that you assigned your
400 shares [in Prime Holdings] to Ramon U. Cojuangco?
MR. GAPUD: Yes.
CONSUL AGUILUCHO: How much did you receive as
consideration for assigning your shares to him?
MR. GAPUD: The consideration for this assignment was that
upon my assignment, first, my fiduciary responsibilities as
nominee were extinguished, and secondly, I had transferred
and extinguished any and all liabilities under the subscription
payable.
CONSUL AGUILUCHO: Do you know if Ramon Cojuangco
received the said shares for himself or for anybody else?
MR. GAPUD: I don’t know."
In fact, while he could have easily identified Marcos as the
beneficial owner of PHI, witness Gapud – who succeeded
Campos as President of PHI – refused under oath to do so.
Instead:
"CONSUL AGUILUCHO: The heirs of Ramon U. Cojuango,
namely Imelda O. Cojuangco and her children… claim that
they own eighty (80) percent of the outstanding capital stock
of Prime Holding, while the Estate of Ramon U. Cojuangco
allegedly owns the remaining twenty (20) percent? Question:
Based on your personal knowledge, do you affirm or deny the
said allegation?
MR. GAPUD: I do not know. I can neither affirm nor deny."
The majority of my colleagues hold that "Gapud’s statement
relating to subsequent execution of deeds of assignment to
Cojuangco and his kin does not detract from the prior delivery
of blank deeds to the former President, especially so in this
case where, by Gapud’s own recounting, he and his co-
incorporators executed the 1981 and 1983 Deeds of
Assignment with the knowledge and authorization of the
same person to whom the earlier deeds were delivered –
President Marcos."
But the ponencia conveniently sidesteps the reality that there
is no evidence of such prior delivery to Marcos. Witness de
Guzman declared that the blank Deeds of Assignment over
PHI shares were placed in the custody of the Legal
Department, and thereafter delivered to Ramon Cojuangco,
together with all the records of PHI.
The majority also hold that the alleged execution by the
incorporators, as "nominees" of Marcos, of the Deeds of
Assignment/Deeds of Trust is consistent with Gapud’s
statement that he received virtually nothing in return for PHI
shares. But to my mind, this is fallacious – a conjecture made
to fit an insignificant fact. A straightforward explanation is
simply that when the PHI shares were assigned to Ramon U.
Cojuangco – the true beneficial owner -Gapud’s role as a
nominee became untenable. Obviously, a nominee’s role ends
when the principal’s exercise of his right begins.
Nor is it accurate to say that there was an absence of
consideration for the transfer of the PHI shares. Gapud
himself admitted that the consideration for the assignment of
his shares to Cojuangco was the termination of his fiduciary
responsibilities as nominee and the extinguishment of his
liabilities under the subscription.
The ponencia does not explain why Marcos allowed the
execution of the Deeds of Assignment in favor of respondent
Cojuangcos. If PHI was indeed a dummy corporation, then it
would be contrary to human experience for President Marcos
to deprive himself of the legal mechanism to assert his
alleged beneficial ownership.
Indeed, if the transfer of PHI shares to the Cojuangco family
was with the "blessings" of President Marcos, then it can only
mean the he was never interested in those shares – a fact
consistent with Campos’ statement that he "never discussed"
the PHI shares with Marcos. Therefore, the plausible reason
for this is that Marcos never owned the shares in the first
place.
The realistic scenario, therefore, is that these shares actually
pertained to Ramon U. Cojuangco from the beginning and the
assignments to him and members of his family merely
confirmed what already existed in fact. In other words,
Cojuangco – not Marcos – has been the beneficial owner of
the shares from the start. This explains why no blank Deeds of
Trust or Assignment were executed and delivered by the
stockholders of PHI, and the reason why they executed and
delivered Deeds of Assignment specifically naming Ramon U.
Cojuangco and the members of his family as the assignees of
the PHI shares. This also explains why PHI’s capitalization was
not increased despite its acquisition of PTIC shares. An
increase was unnecessary because Ramon U. Cojuangco
actually did not part with the ownership of the PTIC shares
transferred to PHI, since after all, he, not Marcos, owned the
PHI. That he is the owner thereof is shown by the following
circumstances:
(a) respondent Cojuangco took over as Chairman and
President of PHI after the assignment; and (b) the books and
records of PHI were turned over to him, as testified to by de
Guzman, the Republic’s witness. Certainly, these assignments
are effective:
"When a formal deed of assignment is executed by the
transferor in favor of a transferee, for the purpose of
assigning shares of stock, endorsement and delivery
requirements stated in Section 63 of the Corporation Code
are deemed substantially complied with. This mode of
transfer covers a situation where no certificate of stock has
been issued or where the stock certificate is not in the
possession of the transferor-stockholder so that the shares of
stock may be transferred by means of a deed of assignment." 3
Additionally, the Republic failed to prove that Marcos had a
subsisting interest in PHI. There had been no intervention on
his part in the affairs of PLDT, PTIC, or PHI. Nor did he issue
instructions that "hugely and inexplicably benefited" these
companies indicating he had any actual interest therein.
Another source of debate in this case has been the
evidentiary standard applicable to this and other ill-gotten
wealth cases, given the Sandiganbayan’s reliance on Baseco
vs. PCGG4 and related jurisprudence. The ponencia stresses
that this Court never intended to lay down evidentiary
standards in Baseco and, therefore, the Sandiganbayan’s
reference to such standards is nothing more than its
"inference from its reading of the Decision."
I disagree. To my mind, Baseco is applicable.
Baseco is a landmark ruling that confirms the modus
operandi described by the Republic’s witnesses here. In that
case, "street certificates" (i.e. stock certificates endorsed in
blank) and Deeds of Assignment to various corporations
including Baseco, also assigned in blank, were among the
documents found to have been in Marcos’ possession in
Malacañang. We were convinced that based on such proof,
Marcos "actually owns well nigh one hundred percent of its
outstanding stock."5
But unlike Baseco, here there is no such documentary
evidence. Neither PHI stock certificates nor PHI Deeds of
Assignment have turned up in Marcos’ hands. Witness de
Guzman testified that assignments of PHI shares were
delivered to Cojuangco, not Marcos. Documentary evidence
(Exhibits "1" to "5", for instance) clearly identify Ramon U.
Cojuangco and the members of his family as the assignees of
PHI shares – certainly removing any idea that these were
assigned in blank to an "unnamed beneficiary."
"We are at a loss to determine which position is correct.
Under the circumstances, we are constrained to decide the
issues under the rule of burden of proof.
Where the evidence on an issue of fact is in equipoise or
there is any doubt on which the evidence preponderates the
party having the burden of proof falls upon that issue, that is
to say, if the evidence touching on disputed facts is equally
balanced, or if it does not produce a just, rational belief of its
existence, or it leaves the mind in a state of perplexity the
party holding the affirmative as to such fact must fail. (23 C.J.
11-12)"7
So must it be in this case. On the assumption that the
Republic has presented a persuasive case, it may not be said
that the defendants do not have in their favor an equally
persuasive one. Even were we to find the balance of evidence
to be just about at equipoise, the Republic’s instant claim – as
a matter of law – must fall.
Some might argue that the evidentiary requirement in civil
forfeiture cases has an even higher standard, that is, proof
beyond reasonable doubt. In Cabal vs. Kapunan,8 we ruled
that proceedings for forfeiture of property in favor of the
State (under the Anti-Graft Law) is criminal and penal in
nature because such actions are primarily to punish for
violation of a duty or a public wrong and to deter others from
offending in the like manner. Forfeiture of property is in
substance a criminal proceeding, and such forfeiture has been
held to partake of the nature of a penalty.
WHEREFORE, I vote to DENY the petition in G. R. No. 153459
and AFFIRM respondent Sandiganbayan’s Partial Decision.

Because this is a civil forfeiture case, then the Republic must

establish, by a "preponderance of evidence," that the PHI
shares were "ill-gotten wealth." Its burden is explained by this
Court, thus:

"Equiponderance of evidence rule states:

When the scales shall stand upon an equipoise and there is

nothing in the evidence which shall incline it to one side or
the other, the court will find for the defendant.

Under said principle, the plaintiff must rely on the strength of

his evidence and not on the weaknesses of defendant’s claim.
Even if the evidence of the plaintiff may be stronger than that
of the defendant, there is no preponderance of evidence on
his side if such evidence is insufficient in itself to establish
his cause of action."

Similarly:
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.
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. 4However, 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
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.

In the present case no such honest difference of opinion was The Court acquires jurisdiction over any case only upon the
possible as the allegations of the complaint, the designation payment of the prescribed docket fee. An amendment of the
and the prayer show clearly that it is an action for damages complaint or similar pleading will not thereby vest jurisdiction
and specific performance. The docketing fee should be in the Court, much less the payment of the docket fee based
assessed by considering the amount of damages as alleged in on the amounts sought in the amended pleading. The ruling
the original complaint. in the Magaspi case 14 in so far as it is inconsistent with this
pronouncement is overturned and reversed.
As reiterated in the Magaspi case the rule is well-settled "that
a case is deemed filed only upon payment of the docket fee WHEREFORE, the motion for reconsideration is denied for lack
regardless of the actual date of filing in court . 12 Thus, in the of merit.
present case the trial court did not acquire jurisdiction over
the case by the payment of only P410.00 as docket fee. SO ORDERED.
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.
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.
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 "Re-Amended
Complaint" stating therein a claim of "not less than
Pl0,000,000. 00 as actual compensatory damages" in the
prayer. In the body of the said second amended complaint
however, private respondent alleges actual and compensatory
damages and attorney's fees in the total amount of about
P44,601,623.70.
On January 24, 1986, Judge Asuncion issued another Order
admitting the second amended complaint and stating therein
that the same constituted proper compliance with the
Resolution of this Court and that a copy thereof should be
furnished the Clerk of Court for the reassessment of the
docket fees. The reassessment by the Clerk of Court based on
private respondent's claim of "not less than P10,000,000.00
as actual and compensatory damages" amounted to
P39,786.00 as docket fee. This was subsequently paid by
private respondent.
Petitioners then filed a petition for certiorari with the Court of
Appeals questioning the said order of Judie Asuncion dated
January 24, 1986.
On April 24, 1986, private respondent filed a supplemental
complaint alleging an additional claim of P20,000,000.00 as
d.qmages so the total claim amounts to about
P64,601,623.70. On October 16, 1986, or some seven months
after filing the supplemental complaint, the private
respondent paid the additional docket fee of P80,396.00. 1
On August 13, 1987, the Court of Appeals rendered a decision
ruling, among others, as follows:
WHEREFORE, judgment is hereby rendered:
1. Denying due course to the petition in 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, 5 wherein 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.10However, 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
to Manchester. In the body of the original complaint, the total
amount of damages sought amounted to about P50 Million.
In the prayer, the amount of damages asked for was not
stated. The action was for the refund of the premium and the
issuance of the writ of preliminary attachment with damages.
The amount of only P210.00 was paid for the docket fee. On
January 23, 1986, private respondent filed an amended
complaint wherein in the prayer it is asked that he be
awarded no less than P10,000,000.00 as actual and exemplary
damages but in the body of the complaint the amount of his
pecuniary claim is approximately P44,601,623.70. Said
amended complaint was admitted and the private respondent
was reassessed the additional docket fee of P39,786.00 based
on his prayer of not less than P10,000,000.00 in damages,
which he paid.
On April 24, 1986, private respondent filed a supplemental
complaint alleging an additional claim of P20,000,000.00 in
damages so that his total claim is approximately
P64,601,620.70. On October 16, 1986, private respondent
paid an additional docket fee of P80,396.00. After the
promulgation of the decision of the respondent court on
August 31, 1987 wherein private respondent was ordered to
be reassessed for additional docket fee, and during the
pendency of this petition, and after the promulgation
of Manchester, on April 28, 1988, private respondent paid an
additional docket fee of P62,132.92. Although private
respondent appears to have paid a total amount of
P182,824.90 for the docket fee considering the total amount
of his claim in the amended and supplemental complaint
amounting to about P64,601,620.70, petitioner insists that
private respondent must pay a docket fee of P257,810.49.
The principle in Manchester could very well be applied in the
present case. The pattern and the intent to defraud the
government of the docket fee due it is obvious not only in the
filing of the original complaint but also in the filing of the
second amended complaint.
However, in Manchester, petitioner did not pay any additional
docket fee until] the case was decided by this Court on May 7,
1987. Thus, in Manchester, due to the fraud committed on
the government, this Court held that the court a quo did not
acquire jurisdiction over the case and that the amended
complaint could not have been admitted inasmuch as the
original complaint was null and void.
In the present case, a more liberal interpretation of the rules
is called for considering that, unlike Manchester, private
respondent demonstrated his willingness to abide by the
rules by paying the additional docket fees as required. The
promulgation of the decision in Manchester must have had
that sobering influence on private respondent who thus paid
the additional docket fee as ordered by the respondent court.
It triggered his change of stance by manifesting his willingness
to pay such additional docket fee as may be ordered.
Nevertheless, petitioners contend that the docket fee that
was paid is still insufficient considering the total amount of
the claim. This is a matter which the clerk of court of the
lower court and/or his duly authorized docket clerk or clerk
in-charge should determine and, thereafter, if any amount is
found due, he must require the private respondent to pay the
same.
Thus, the Court rules as follows:
1. It is not simply the filing of the complaint or appropriate
initiatory pleading, but the payment of the prescribed docket
fee, that vests a trial court with jurisdiction over the subject
matter or nature of the action. Where the filing of the
initiatory pleading is not accompanied by payment of the
docket fee, the court may allow payment of the fee within a
reasonable time but in no case beyond the applicable
prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third
party claims and similar pleadings, which shall not be
considered filed until and unless the filing fee prescribed
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.
G.R. No. 151242 June 15, 2005 TOTAL ………….. $1,622,233.62

PROTON PILIPINAS CORPORATION, AUTOMOTIVE Conversion rate to peso x 43_

PHILIPPINES, ASEA ONE CORPORATION and TOTAL ………….. ₱69,756,000.00
AUTOCORP, Petitioners, (roundoff)
vs.
BANQUE NATIONALE DE PARIS,1 Respondent.
Computation based on Rule 141:
DECISION
COURT JDF
CARPIO MORALES, J.:
₱ 69,756,000.00 ₱ 69.606.000.00
It appears that sometime in 1995, petitioner Proton Pilipinas - 150,000.00 x .003
Corporation (Proton) availed of the credit facilities of herein
respondent, Banque Nationale de Paris (BNP). To guarantee 69,606,000.00 208,818.00
the payment of its obligation, its co-petitioners Automotive x .002 + 450.00
Corporation Philippines (Automotive), Asea One Corporation
(Asea) and Autocorp Group (Autocorp) executed a corporate 139,212.00 ₱ 209,268.00
guarantee2 to the extent of US$2,000,000.00. BNP and Proton
subsequently entered into three trust receipt agreements + 150.00
dated June 4, 1996,3 January 14, 1997,4 and April 24, 1997.5 ₱ 139,362.00

Under the terms of the trust receipt agreements, Proton LEGAL : ₱139,362.00
would receive imported passenger motor vehicles and hold + 209,268.00
them in trust for BNP. Proton would be free to sell the
vehicles subject to the condition that it would deliver the ₱348,630.00 x 1% = ₱3,486.30
proceeds of the sale to BNP, to be applied to its obligations to
₱ 139,362.00
it. In case the vehicles are not sold, Proton would return them
to BNP, together with all the accompanying documents of + 209,268.00
title.
3,486.00
Allegedly, Proton failed to deliver the proceeds of the sale and - Total fees paid by the
return the unsold motor vehicles. ₱ 352,116.30
plaintiff

Pursuant to the corporate guarantee, BNP demanded from

To the complaint, the defendants-herein petitioners filed on
Automotive, Asea and Autocorp the payment of the amount
October 12, 1998 a Motion to Dismiss9 on the ground that
of US$1,544,984.406 representing Proton's total outstanding
BNP failed to pay the correct docket fees to thus prevent the
obligations. These guarantors refused to pay, however. Hence,
trial court from acquiring jurisdiction over the case. 10 As
BNP filed on September 7, 1998 before the Makati Regional
additional ground, petitioners raised prematurity of the
Trial Court (RTC) a complaint against petitioners praying that
complaint, BNP not having priorly sent any demand letter. 11
they be ordered to pay (1) US$1,544,984.40 plus accrued
interest and other related charges thereon subsequent to
August 15, 1998 until fully paid and (2) an amount equivalent By Order12 of August 3, 1999, Branch 148 of the Makati RTC
to 5% of all sums due from petitioners as attorney's fees. denied petitioners' Motion to Dismiss, viz:

The Makati RTC Clerk of Court assessed the docket fees which Resolving the first ground relied upon by the defendant, this
BNP paid at ₱352,116.307 which was computed as follows:8 court believes and so hold that the docket fees were properly
paid. It is the Office of the Clerk of Court of this station that
computes the correct docket fees, and it is their duty to
First Cause of Action  $ 844,674.07 assess the docket fees correctly, which they did.1avvphi1.zw+
Second Cause of Action  171,120.53
Even granting arguendo that the docket fees were not
Third Cause of Action  529,189.80 properly paid, the court cannot just dismiss the case. The
Court has not yet ordered (and it will not in this case) to pay
$1,544,984.40
the correct docket fees, thus the Motion to dismiss is
5% as Attorney's Fees  $ 77,249.22 premature, aside from being without any legal basis.
As held in the case of National Steel Corporation vs. CA, G.R.
No. 123215, February 2, 1999, the Supreme Court said:
xxx
Although the payment of the proper docket fees is a
jurisdictional requirement, the trial court may allow the
plaintiff in an action to pay the same within a reasonable time
within the expiration of applicable prescription or
reglementary period. If the plaintiff fails to comply with this
requirement, the defendant should timely raise the issue of
jurisdiction or else he would be considered in estoppel. In the
latter case, the balance between appropriate docket fees and
the amount actually paid by the plaintiff will be considered a
lien or (sic) any award he may obtain in his favor.
As to the second ground relied upon by the defendants, in
that a review of all annexes to the complaint of the plaintiff
reveals that there is not a single formal demand letter for
defendants to fulfill the terms and conditions of the three (3)
trust agreements.
In this regard, the court cannot sustain the submission of
defendant. As correctly pointed out by the plaintiff, failure to
make a formal demand for the debtor to pay the plaintiff is
not among the legal grounds for the dismissal of the case.
Anyway, in the appreciation of the court, this is simply
evidentiary.
xxx
WHEREFORE, for lack of merit, the Motion to Dismiss
interposed by the defendants is hereby
DENIED.13(Underscoring supplied)
14
Petitioners filed a motion for reconsideration of the denial
of their Motion to Dismiss, but it was denied by the trial court
by Order15 of October 3, 2000.
Petitioners thereupon brought the case on certiorari and
mandamus16 to the Court of Appeals which, by Decision17of
July 25, 2001, denied it in this wise:
… Section 7(a) of Rule 141 of the Rules of Court excludes
interest accruing from the principal amount being claimed in
the pleading in the computation of the prescribed filing fees.
The complaint was submitted for the computation of the filing
fee to the Office of the Clerk of Court of the Regional Trial
Court of Makati City which made an assessment that
respondent paid accordingly. What the Office of the Clerk of
Court did and the ruling of the respondent Judge find support
in the decisions of the Supreme Court in Ng Soon vs. Alday
and Tacay vs. RTC of Tagum, Davao del Norte. In the latter
case, the Supreme Court explicitly ruled that "where the
action is purely for recovery of money or damages, the docket
fees are assessed on the basis of the aggregate amount
claimed, exclusive only of interests and costs."
Assuming arguendo that the correct filing fees was not made,
the rule is that the court may allow a reasonable time for the
payment of the prescribed fees, or the balance thereof, and
upon such payment, the defect is cured and the court may
properly take cognizance of the action unless in the meantime
prescription has set in and consequently barred the right of
action. Here respondent Judge did not make any finding, and
rightly so, that the filing fee paid by private respondent was
insufficient.
On the issue of the correct dollar-peso rate of exchange, the
Office of the Clerk of Court of the RTC of Makati pegged it at ₱
43.21 to US$1. In the absence of any office guide of the rate
of exchange which said court functionary was duty bound to
follow, the rate he applied is presumptively correct.
Respondent Judge correctly ruled that the matter of demand
letter is evidentiary and does not form part of the required
allegations in a complaint. Section 1, Rule 8 of the 1997 Rules
of Civil Procedure pertinently provides:
"Every pleading shall contain in a methodical and logical form,
a plain, concise and direct statement of the ultimate facts on
which the party pleading relies for his claim or defense, as the
case may be, omitted the statement of mere evidentiary
facts."
Judging from the allegations of the complaint particularly
paragraphs 6, 12, 18, and 23 where allegations of imputed
demands were made upon the defendants to fulfill their
respective obligations, annexing the demand letters for the
purpose of putting up a sufficient cause of action is not
required.
In fine, respondent Judge committed no grave abuse of
discretion amounting to lack or excess of jurisdiction to
warrant certiorari and mandamus.18 (Underscoring supplied)
Their Motion for Reconsideration19 having been denied by the
Court of Appeals,20 petitioners filed the present petition for
review on certiorari21 and pray for the following reliefs:
WHEREFORE, in view of all the foregoing, it is most
respectfully prayed of this Honorable Court to grant the
instant petition by REVERSING and SETTING ASIDE the
questioned Decision of July 25, 2001 and the Resolution of
December 18, 2001 for being contrary to law, to
Administrative Circular No. 11-94 and Circular No. 7 and
instead direct the court a quo to require Private Respondent
Banque to pay the correct docket fee pursuant to the correct
exchange rate of the dollar to the peso on September 7, 1998
and to quantify its claims for interests on the principal
obligations in the first, second and third causes of actions in
its Complaint in Civil Case No. 98-2180. 22(Underscoring
supplied)
Citing Administrative Circular No. 11-94,23 petitioners argue
that BNP failed to pay the correct docket fees as the said
circular provides that in the assessment thereof, interest
claimed should be included. There being an underpayment of
the docket fees, petitioners conclude, the trial court did not
acquire jurisdiction over the case.
Additionally, petitioners point out that the clerk of court, in
converting BNP's claims from US dollars to Philippine pesos,
applied the wrong exchange rate of US $1 = ₱43.00, the
exchange rate on September 7, 1998 when the complaint was
filed having been pegged at US $1 = ₱43.21. Thus, by
petitioners' computation, BNP's claim as of August 15, 1998
was actually ₱70,096,714.72,24 not ₱69,756,045.66.
Furthermore, petitioners submit that pursuant to Supreme
Court Circular No. 7,25 the complaint should have been
dismissed for failure to specify the amount of interest in the
prayer.
Circular No. 7 reads:
TO: JUDGES AND CLERKS OF COURT OF THE COURT OF TAX
APPEALS, REGIONAL TRIAL COURTS, METROPOLITAN TRIAL
COURTS IN CITIES, MUNICIPAL TRIAL COURTS, MUNICIPAL
CIRCUIT TRIAL COURTS, SHARI'A DISTRICT COURTS;AND THE
INTEGRATED BAR OF THE PHILIPPINES
SUBJECT: ALL COMPLAINTS MUST SPECIFY AMOUNT OF
DAMAGES SOUGHT NOT ONLY IN THE BODY OF THE
PLEADING, BUT ALSO IN THE PRAYER IN ORDER TO BE
ACCEPTED AND ADMITTED FOR FILING. THE AMOUNT OF
DAMAGES SO SPECIFIED IN THE COMPLAINT SHALL BE THE
BASIS FOR ASSESSING THE AMOUNT OF THE FILING FEES.
In Manchester Development Corporation vs. Court of Appeals,
No. L-75919, May 7, 1987, 149 SCRA 562, this Court
condemned the practice of counsel who in filing the original
complaint omitted from the prayer any specification of the
amount of damages although the amount of over P78 million
is alleged in the body of the complaint. This Court observed
that "(T)his 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. xxx"
For the guidance of all concerned, the WARNING given by the
court in the afore-cited case is reproduced hereunder:
"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 be 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 amount sought in the amended pleading. The ruling in
the Magaspi case (115 SCRA 193) in so far as it is inconsistent
with this pronouncement is overturned and reversed."
Strict compliance with this Circular is hereby enjoined.
Let this be circularized to all the courts hereinabove named
and to the President and Board of Governors of the
Integrated Bar of the Philippines, which is hereby directed to
disseminate this Circular to all its members.
March 24, 1988.
(Sgd). CLAUDIO TEEHANKEE
Chief Justice
(Emphasis and underscoring supplied)
On the other hand, respondent maintains that it had paid the
filing fee which was assessed by the clerk of court, and that
there was no violation of Supreme Court Circular No. 7
because the amount of damages was clearly specified in the
prayer, to wit:
2. On the FIRST CAUSE OF ACTION -
(c) Defendant PROTON be ordered to pay the sum of (i) US
DOLLARS EIGHT HUNDRED FORTY FOUR THOUSAND SIX
HUNDRED SEVENTY FOUR AND SEVEN CENTS (US$
844,674.07), plus accrued interests and other related charges
thereon subsequent to August 15, 1998, until fully paid; and
(ii) an amount equivalent to 5% of all sums due from said
Defendant, as and for attorney's fees;
3. On the SECOND CAUSE OF ACTION -
(d) Defendant PROTON be ordered to pay the sum of (i) US
DOLLARS ONE HUNDRED TWENTY AND FIFTY THREE CENTS
(US$171,120.53), plus accrued interests and other related
charges thereon subsequent to August 15, 1998 until fully
paid; and (ii) an amount equivalent to 5% of all sums due
from said Defendant, as and for attorney's fees;
4. On the THIRD CAUSE OF ACTION -
(e) Defendant PROTON be ordered to pay the sum of (i) US ₱ 20,000.00 or more but less than ₱
DOLLARS FIVE HUNDRED TWENTY NINE THOUSAND ONE 4. 80.00
40,000.00 ………..
HUNDRED EIGHTY NINE AND EIGHTY CENTS (US$529,189.80),
plus accrued interests and other related charges thereon ₱ 40,000.00 or more but less than ₱
5. 120.00
subsequent to August 15, 1998 until fully paid; and (ii) an 60,000.00 ………..
amount equivalent to 5% or all sums due from said
₱ 60,000.00 or more but less than ₱
Defendant, as and for attorney's fees; 6. 160.00
80,000.00 ……….
5. On ALL THE CAUSES OF ACTION - ₱ 80,000.00 or more but less than ₱
7. 200.00
150,000.00 ………
Defendants AUTOMOTIVE CORPORATION PHILIPPINES, ASEA
And for each ₱ 1,000.00 in excess of ₱
ONE CORPORATION and AUTOCORP GROUP to be ordered to 8. 4.00
150,000.00 .....
pay Plaintiff BNP the aggregate sum of (i) US DOLLARS ONE
MILLION FIVE HUNDRED FORTY FOUR THOUSAND NINE When the value of the case cannot be
9. 400.00
HUNDRED EIGHTY FOUR AND FORTY CENTS estimated ………
(US$1,544,984.40) (First through Third Causes of Action), plus
accrued interest and other related charges thereon 10. When the case does not concern
subsequent to August 15, 1998 until fully paid; and (ii) an property
amount equivalent to 5% of all sums due from said (naturalization, adoption, legal
Defendants, as and for attorney's fees.26 separation, etc.) ..……... 64.00
11. In forcible entry and illegal detainer
Moreover, respondent posits that the amount of cases
US$1,544,984.40 represents not only the principal but also appealed from inferior courts
interest and other related charges which had accrued as of …………………………………. 40.00
August 15, 1998. Respondent goes even further by suggesting
that in light of Tacay v. Regional Trial Court of Tagum, Davao
del Norte27 where the Supreme Court held, If the case concerns real estate, the assessed value thereof
shall be considered in computing the fees.
Where the action is purely for the recovery of money or
damages, the docket fees are assessed on the basis of the In case the value of the property or estate or the sum claim is
aggregate amount claimed, exclusive only of interests and less or more in accordance with the appraisal of the court, the
costs.28 (Emphasis and underscoring supplied), difference of fees shall be refunded or paid as the case may
be.
it made an overpayment.
When the complaint in this case was filed in 1998, however,
as correctly pointed out by petitioners, Rule 141 had been
When Tacay was decided in 1989, the pertinent rule
amended by Administrative Circular No. 11-9429 which
applicable was Section 5 (a) of Rule 141 which provided for
provides:
the following:
BY RESOLUTION OF THE COURT, DATED JUNE 28, 1994,
SEC. 5. Clerks of Regional Trial Courts. - (a) For filing an action
PURSUANT TO SECTION 5 (5) OF ARTICLE VIII OF THE
or proceeding, or a permissive counter-claim or cross-claim
CONSTITUTION, RULE 141, SECTION 7 (a) AND (d), and
not arising out of the same transaction subject of the
SECTION 8 (a) and (b) OF THE RULES OF COURT ARE HEREBY
complaint, a third-party complaint and a complaint in
AMENDED TO READ AS FOLLOWS:
intervention and for all services in the same, if the sum
claimed, exclusive of interest, of the value of the property in
litigation, or the value of the estate, is:

RULE 141
LEGAL FEES

Less than ₱ 5,000.00 …. xxx

1. ₱ 32.00
………………………………
₱ 5,000.00 or more but less than ₱ Sec. 7. Clerks of Regional Trial Courts
2. 48.00
10,000.00 …………
(a) For filing an action or a permissive counterclaim or money
₱ 10,000.00 or more but less than ₱ claim against an estate not based on judgment, or for filing
3. 64.00
20,000.00 ……….. with leave of court a third-party, fourth-party, etc. complaint,
or a complaint in intervention, and for all clerical services in
the same, if the total sum claimed, inclusive of interest,
damages of whatever kind, attorney's fees, litigation
expenses, and costs, or the stated value of the property in
litigation, is:
Not more than ₱ 100,000.00 ₱ Judge, the amounts claimed need not be initially stated with
1.
…………………………… 400.00
₱ 100,000.00, or more but not more
2. 600.00
than ₱ 150,000.00 …
For each ₱ 1,000.00 in excess of ₱
3. 5.00
150,000.00 ………….
xxx
Sec. 8. Clerks of Metropolitan and Municipal Trial Courts
(a) For each civil action or proceeding,
where the value of the subject matter
involved, or the amount of the
demand, inclusive of interest, damages or
whatever kind, attorney's fees, litigation
expenses, and costs, is:
Not more than ₱ 20,000.00 ₱ complaint but is less or more than what is later proved. If
1.
…………………………… ... 120.00
More than ₱ 20,000.00 but not more
2. 400.00
than ₱ 100,000.00 ….
More than ₱ 100,000.00 but not more
3. 850.00
than ₱ 200,000.00 …
(Emphasis and underscoring supplied)
The clerk of court should thus have assessed the filing fee by
taking into consideration "the total sum claimed, inclusive of
interest, damages of whatever kind, attorney's fees, litigation
expenses, and costs, or the stated value of the property in
litigation." Respondent's and the Court of Appeals' reliance
then on Tacay was not in order.
Neither was, for the same reason, the Court of Appeals'
reliance on the 1989 case of Ng Soon v. Alday,30 where this
Court held:
…The failure to state the rate of interest demanded was not
fatal not only because it is the Courts which ultimately fix the
same, but also because Rule 141, Section 5(a) of the Rules of
Court, itemizing the filing fees, speaks of "the sum
claimed, exclusive of interest." This clearly implies that
the specification of the interest rate is not that
indispensable.
Factually, therefore, not everything was left to "guesswork" as
respondent Judge has opined. The sums claimed were
ascertainable, sufficient enough to allow a computation
pursuant to Rule 141, section 5(a).
Furthermore, contrary to the position taken by respondent
mathematical precision. The same Rule 141, section 5(a)
(3rd paragraph), allows an appraisal "more or less."31 Thus:
"In case the value of the property or estate or the sum
claimed is less or more in accordance with the appraisal of
the court, the difference of fee shall be refunded or paid as
the case may be."
In other words, a final determination is still to be made by the
Court, and the fees ultimately found to be payable will either
be additionally paid by the party concerned or refunded to
him, as the case may be. The above provision clearly allows
an initial payment of the filing fees corresponding to the
estimated amount of the claim subject to adjustment as to
what later may be proved.
". . . there is merit in petitioner's claim that the third
paragraph of Rule 141, Section 5(a) clearly contemplates a
situation where an amount is alleged or claimed in the
what is proved is less than what was claimed, then a refund
will be made; if more, additional fees will be exacted.
Otherwise stated, what is subject to adjustment is the
difference in the fee and not the whole amount" (Pilipinas
Shell Petroleum Corp., et als., vs. Court of Appeals, et als.,
G.R. No. 76119, April 10, 1989).32 (Emphasis and underscoring
supplied)
Respecting the Court of Appeals' conclusion that the clerk of
court did not err when he applied the exchange rate of US $1
= ₱43.00 "[i]n the absence of any office guide of the rate of
exchange which said court functionary was duty bound to
follow,[hence,] the rate he applied is presumptively correct,"
the same does not lie. The presumption of regularity of the
clerk of court's application of the exchange rate is not
conclusive.33 It is disputable.34 As such, the presumption may
be overturned by the requisite rebutting evidence. 35 In the
case at bar, petitioners have adequately proven with
documentary evidence36 that the exchange rate when the
complaint was filed on September 7, 1998 was US $1 =
₱43.21.
In fine, the docket fees paid by respondent were insufficient.
With respect to petitioner's argument that the trial court did
not acquire jurisdiction over the case in light of the
insufficient docket fees, the same does not lie.
True, in Manchester Development Corporation v. Court of
Appeals,37 this Court held that the court acquires jurisdiction
over any case only upon the payment of the prescribed
docket fees,38 hence, it concluded that the trial court did not
acquire jurisdiction over the case.
It bears emphasis, however, that the ruling in Manchester was
clarified in Sun Insurance Office, Ltd. (SIOL) v. Asuncion39 when
this Court held that in the former there was clearly an effort
to defraud the government in avoiding to pay the correct
docket fees, whereas in the latter the plaintiff demonstrated
his willingness to abide by paying the additional fees as
required.
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, unlikeManchester, 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.40 (Emphasis and underscoring
supplied)
The ruling in Sun Insurance Office was echoed in
the 2005 case of Heirs of Bertuldo Hinog v. Hon. Achilles
Melicor:41
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. (Emphasis and underscoring supplied;
citations omitted)
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.
Parenthetically, in the complaint, respondent prayed for
"accrued interest… subsequent to August 15, 1998 until fully
paid." The complaint having been filed on September 7, 1998,
respondent's claim includes the interest from August 16, 1998
until such date of filing.
Respondent did not, however, pay the filing fee corresponding
to its claim for interest from August 16, 1998 until the filing of
the complaint on September 7, 1998. As priorly discussed,
this is required under Rule 141, as amended by Administrative
Circular No. 11-94, which was the rule applicable at the time.
Thus, as the complaint currently stands, respondent cannot
claim the interest from August 16, 1998 until September 7,
1998, unless respondent is allowed by motion to amend its
complaint within a reasonable time and specify the precise
amount of interest petitioners owe from August 16, 1998 to
September 7, 199842 and pay the corresponding docket fee
therefor.

With respect to the interest accruing after the filing of the

complaint, the same can only be determined after a final
judgment has been handed down. Respondent cannot thus
be made to pay the corresponding docket fee therefor.
Pursuant, however, to Section 2, Rule 141, as amended by
Administrative Circular No. 11-94, respondent should be
made to pay additional fees which shall constitute a lien in
the event the trial court adjudges that it is entitled to interest
accruing after the filing of the complaint.

Sec. 2. Fees as lien. - Where the court in its final judgment

awards a claim not alleged, or a relief different or more than
that claimed in the pleading, the party concerned shall pay
the additional fees which shall constitute a lien on the
judgment in satisfaction of said lien. The clerk of court shall
assess and collect the corresponding fees.

In Ayala Corporation v. Madayag,43 in interpreting the third

rule laid down in Sun Insurance regarding awards of claims
not specified in the pleading, this Court held that the
same refers only to damages arising after the filing of the
complaint or similar pleading as to which the additional
filing fee therefor shall constitute a lien on the judgment.

… The amount of any claim for damages, therefore, arising on

or before the filing of the complaint or any pleading should be
specified. While it is true that the determination of certain
damages as exemplary or corrective damages is left to the
sound discretion of the court, it is the duty of the parties
claiming such damages to specify the amount sought on the
basis of which the court may make a proper determination,
and for the proper assessment of the appropriate docket
fees. The exception contemplated as to claims not specified
or to claims although specified are left for determination of
the court is limited only to any damages that may arise after
the filing of the complaint or similar pleading for then it will
not be possible for the claimant to specify nor speculate as
to the amount thereof.44 (Emphasis and underscoring
supplied; citation omitted)1avvphi1.zw+

WHEREFORE, the petition is GRANTED in part. The July 25,

2001 Decision and the December 18, 2001 Resolution of the
Court Appeals are hereby MODIFIED. The Clerk of Court of the
Regional Trial Court of Makati City is ordered to reassess and
determine the docket fees that should be paid by respondent,
BNP, in accordance with the Decision of this Court, and direct
respondent to pay the same within fifteen (15) days, provided
the applicable prescriptive or reglementary period has not yet
expired. Thereafter, the trial court is ordered to proceed with
the case with utmost dispatch.

SO ORDERED.
G.R. No. 146611 February 6, 2007
TANCREDO REDEÑA, Petitioner,
vs.
HON. COURT OF APPEALS and LEOCADIO
REDEÑA, Respondents.
GARCIA, J.:
In this special civil action for certiorari under Rule 65 of the
1997 Rules of Civil Procedure, petitioner Tancredo Redeña
(Tancredo, hereafter) seeks the annulment and setting aside
of the Resolution1 dated April 28, 2000 of the Court of
Appeals in CA-G.R. CV No. 59641, as reiterated in its
Resolution2 of November 16, 2000, denying the petitioner’s
motion for reconsideration.
The present controversy sprung from an action for partition
filed by petitioner Tancredo against his older half-brother,
herein private respondent Leocadio Redeña (Leocadio, for
brevity) before the then Court of First Instance (now Regional
Trial Court [RTC]) of San Pablo City, Laguna, and thereat
docketed as Civil Case No. S-241 which was subsequently
inherited by Branch 33 of the RTC, Siniloan, Laguna.
The basic complaint for partition alleges that plaintiff
Tancredo and defendant Leocadio are both sons of one
Maximo Redeña: Tancredo, by Maximo’s marriage to
Magdalena Fernandez, and Leocadio, by Maximo’s previous
marriage to Emerenciana Redeña. The complaint further
alleged that the parties’ common father, Maximo, left several
pieces of realty, to wit: a residential lot at M. Calim Street,
Famy, Laguna; a riceland at Poroza, Famy, Laguna; and
another parcel of land at Maate, also in Famy, Laguna.
In a decision3 dated August 20, 1997, the trial court, based on
the evidence presented, confined the partition to only the
property actually pertaining to the estate of the parties’
deceased father and co-owned by them, namely, the parcel of
land at Maate, and accordingly rendered judgment as follows:
WHEREFORE, premises considered, judgment is hereby
rendered ordering the defendant [now respondent Leocadio]
to partition only the property located at Maate, Famy, Laguna
after plaintiff’s [Tancredo’s] reimbursement of the expenses
incurred by the defendant in relation to the said lot. However,
partition cannot be effected with regard to properties located
at M. Calim Street, Famy, Laguna and the property located at
Poroza, Famy, Laguna, as the same belong to the defendant.
No pronouncement as to costs.
SO ORDERED. (Words in brackets supplied)
On December 11, 1997, petitioner filed with the trial court a
Notice of Appeal.4 The court gave due course to the notice
and directed the elevation of the records of the case to the CA
whereat petitioner’s appeal was docketed as CA-G.R.CV No.
59641.
On September 28, 1998, the CA issued a resolution directing
petitioner, as appellant, to file his appellant’s brief. Evidently,
the period for filing the brief was even extended by the CA.
On March 9, 1999, there being no appellant’s brief filed
within the extended period, the CA issued a
resolution5considering the appeal abandoned and accordingly
dismissing the same. The dismissal resolution reads:
For failure of plaintiff-appellant [now petitioner] to file the
required brief within the extended period, the instant appeal
is hereby considered ABANDONED and accordingly
DISMISSED, pursuant to Section 1(e), Rule 50, 1997 Rules of
Civil Procedure.
On November 8, 1999 or eight (8) months after the CA issued
the above resolution, petitioner filed a motion for
reconsideration6 thereof. In a resolution7 of November 25,
1999, the CA denied the motion.
Then, on December 28, 1999, in the same CA-G.R. CV No.
59641, petitioner filed a Petition for Relief 8 bearing date
December 27, 1999, anchored on Section 2,9 Rule 38 of the
1997 Rules of Civil Procedure. In that pleading, petitioner
prays the CA to set aside its dismissal resolution of March 9,
1999, supra, reinstate his appeal and grant him a fresh period
of forty-five (45) days from notice within which to file his
appellant’s brief.
In the herein assailed Resolution10 dated April 28, 2000, the
CA denied the aforementioned Petition for Relief, thus:
WHEREFORE, the petition for relief dated 27 December 1999
is hereby DENIED.
SO ORDERED.
Explains the CA in said resolution:
Petition for relief is not among the remedies available in the
Court of Appeals. In fact, authorities in remedial law (noted
authors Regalado, Herrera, and Feria) are one in their
commentaries that these petitions are filed with the trial
courts. Not one of them has advanced an opinion or
comment that this equitable relief can be obtained in the
Court of Appeals. Under Rule 47, an annulment of judgment
or final orders and resolutions may be filed before this court
based on the ground of extrinsic fraud which seems to be the
premise of the petition. Perhaps it is worth looking into by the
petitioner if the factual basis of the present petition for relief
may qualify as an extrinsic fraud, under Rule 47.
Petitioner’s motion for reconsideration of the above- Presently, petitioner is now before this Court via the instant
mentioned resolution was likewise denied by the CA in its recourse on his submission that the CA committed grave
equally challenged Resolution11 of November 16, 2000, abuse of discretion when it -
wherein the appellate court further wrote:
I
Under the 1964 Rules of Court, there was only one court
where a petition for relief may be filed – the Court of First XXX RULED THAT A PETITION FOR RELIEF IS NOT AN
Instance, now the Regional Trial Court. Section 1 thereof AVAILABLE REMEDY IN THE COURT OF APPEALS.
governs a petition to Court of First Instance for relief from
judgment of inferior court while Section 2 thereof governs II
petition to Court of First Instance for relief from judgment or
other proceeding thereof. The 1997 Rules of Civil Procedure
XXX REFUSED TO GRANT THE PETITION DESPITE A CLEAR
has altered the said precept. Now, it must be filed before the
SHOWING THAT (A) PETITIONER, BY REASON OF FRAUD AND
Municipal Trial Courts or Metropolitan Trial Courts for
MISTAKE, WAS PREVENTED FROM PROSECUTING HIS APPEAL,
judgments or final orders or other proceedings taken in said
AND (B) PETITIONER HAS A GOOD AND SUBSTANTIAL CAUSE
courts, and in the same case. And for judgment, order, or
OF ACTION AGAINST PRIVATE RESPONDENT.
other proceedings in the Regional Trial Court, it must be filed
in the same Regional Trial Court which rendered the judgment
We DISMISS.
or final order, or other proceedings taken and in the same
case. In other words, under the present rule, such a petition
may be filed in the same court which rendered the judgment In Hagonoy Market Vendor Association v. Municipality of
or final order, or proceedings taken and in the same case. This Hagonoy, Bulacan, G.R. No. 137621, February 6, 2002, then
is in accordance with uniform procedure rule for Municipal Associate Justice, now Chief Justice Reynato S. Puno,
and Regional Trial Courts. reminded us that

The above construction to limit the term "any court" to
Municipal Trial Court and Regional Trial Court – and not to
include the Court of Appeals – finds support in Section 7 of
the Rules which states:
Sec. 7. Procedure where the denial of an appeal is set aside. –
Where the denial of an appeal is set aside, the lower court
shall be required to give due course to the appeal and to
elevate the record of the appealed case as if a timely and
proper appeal had been made.
Significantly, there is no specific provision in both the 1964
and 1997 Rules of Court making the petition under Rule 38,
applicable in the Court of Appeals. The procedure in the Court
of Appeals from Rule 44 to Rule 55 with the exception of Rule
45 which pertains to the Supreme Court, identifies the
remedies available before said court such as annulment of
judgment or final orders and resolution (Rule 47); motion for
reconsideration (Rule 52); and, new trial, (Rule 53). Nowhere
is petition for relief under Rule 38 mentioned.
But even as the CA stood firm on its stand that a petition for
relief from denial of appeal is not among the remedies
available before the CA itself, the appellate court, in the same
Resolution of November 16, 2000, left the final determination
of the question to this Court, thus:
Parenthetically, the main question presented herein is novel
in that there is yet no definite and definitive jurisprudence
from the Supreme Court. Perhaps, the case will clarify this
gray area in our adjective law for guidance of the Bench and
Bar. The issue should be elevated to that Tribunal.
Laws are of two (2) kinds: substantive and procedural.
Substantive laws, insofar as their provisions are unambiguous,
are rigorously applied to resolve legal issues on the merits. In
contrast, courts generally frown upon an uncompromising
application of procedural laws so as not to subvert substantial
justice. Nonetheless, it is not totally uncommon for courts to
decide cases based on a rigid application of the so-called
technical rules of procedure as these rules exist for the
orderly administration of justice.
From the petition, it is clear that this Court is called upon to
relax the application of procedural rules, or suspend them
altogether, in favor of petitioner’s substantial rights. There is
no doubt as to the power of this Court to do that. In a fairly
recent case, we reiterated:
The Court has often stressed that rules of procedure are
merely tools designed to facilitate the attainment of justice.
They were conceived and promulgated to effectively aid the
court in the dispensation of justice. Courts are not slaves to or
robots of technical rules, shorn of judicial discretion. In
rendering justice, courts have always been, as they ought to
be, conscientiously guided by the norm that on the balance,
technicalities take a backseat against substantive rights, and
not the other way around. Thus, if the application of the Rules
would tend to frustrate rather than promote justice, it is
always within our power to suspend the rules or except a
particular case from its operation.12
The Rules itself expressly states in Section 2 of Rule 1 that the
rules shall be liberally construed in order to promote their
object and to assist the parties in obtaining just, speedy and
inexpensive determination of every action and proceeding.
Courts, therefore, not only have the power but the duty to
construe and apply technical rules liberally in favor of
substantive law and substantial justice. Furthermore, this
Court, unlike courts below, has the power not only to liberally
construe the rules, but also to suspend them, in favor of
substantive law or substantial rights. Such power inherently
belongs to this Court, which is expressly vested with rule-
making power by no less than the Constitution.13 1awphi1.net
It is equally settled, however, that this Court’s power to
liberally construe and even to suspend the rules, presupposes
the existence of substantial rights in favor of which, the strict
application of technical rules must concede. The facts are
borne out by the records pertaining to petitioner’s purported
undivided share in the property at M. Calim Street, Famy,
Laguna, and the property in Poroza clearly showed that these
two properties had been subject of an agreement (Exh. "1")
whereby petitioner recognized respondent’s rights to said
properties. This fact binds this Court, there being nothing on
record with the trial court as to the herein alleged fraud
against the petitioner. Upon thorough deliberation of the
supposed substantial rights claimed by the petitioner with the
court below, the Court finds no cogent basis to favorably rule
on the merits of the appeal even if it may be given due course
which is indispensable to justify this Court in considering this
case as an exception to the rules.
The present case will have to be decided in accordance with
existing rules of procedure. We apply the settled principle
that petition for relief under Rule 38 of the Rules of Court is of
equitable character, allowed only in exceptional cases as
when there is no other available or adequate
remedy.14 Hence, a petition for relief may not be availed of
where a party has another adequate remedy available to him,
which is either a motion for new trial or appeal from the
adverse decision of the lower court, and he is not prevented
from filing such motion or taking the appeal. The rule is that
relief will not be granted to a party who seeks to be relieved
from the effect of the judgment when the loss of the remedy
at law is due to his own negligence, or a mistaken mode of
procedure; otherwise, the petition for relief will be
tantamount to reviving the right of appeal which has already
been lost either because of inexcusable negligence or due to a
mistake in the mode of procedure taken by counsel.15
Under Section 2 of Rule 38, supra, of the Rules of Court, a
party prevented from taking an appeal from a judgment or
final order of a court by reason of fraud, accident, mistake or
excusable negligence, may file in the same court and in the
same case a petition for relief praying that his appeal be given
due course. This presupposes, of course, that no appeal was
taken precisely because of any of the aforestated reasons
which prevented him from appealing his case. Hence, a
petition for relief under Rule 38 cannot be availed of in the
CA, the latter being a court of appellate jurisdiction. For sure,
under the present Rules, petitions for relief from a judgment,
final order or other proceeding rendered or taken should be
filed in and resolved by the court in the same case from which
the petition arose. Thus, petition for relief from a judgment,
final order or proceeding involved in a case tried by a
municipal trial court shall be filed in and decided by the same
court in the same case, just like the procedure followed in the
present Regional Trial Court.16
Here, the record shows that petitioner in fact filed a Notice of
Appeal with the trial court, which the latter granted in its
order of December 11, 1997 and ordered the elevation of the
records to the CA. In turn, the CA, in its resolution of
September 28, 1998, required the petitioner, thru his former
counsel, Atty. Geminiano Almeda, to file his appellant’s brief.
But petitioner failed to comply. Consequently, in its resolution
of March 9, 1999, the CA considered the appellant’s appeal as
ABANDONED and DISMISSED the same.
Additionally, after the dismissal of his appeal, petitioner filed
with the CA a motion for reconsideration of the dismissal
resolution. Unfortunately, however, the motion was filed very
much late on November 8, 1999. Expectedly, in its
resolution17 of November 25, 1999, the CA denied the motion
for reconsideration, to wit:
The last day to file a motion for reconsideration was on 06
April 1999 and as of 18 October 1999 no such motion was
ever filed; in fact on 19 October 1999 the court resolved that
an entry of judgment may now be issued. The motion for
reconsideration, however, pleas for leniency on account of his
former lawyer’s inefficiency and negligence in that he failed to
appeal the case. This is not well taken.
His former lawyer’s lack of fidelity and devotion to his client in
the discharge of his duty of perfecting the appeal on time
without demonstrating fraud, accident, mistake or excusable
negligence cannot be a basis for judicial relief. The client has
to bear the adverse consequences of the inexcusable mistake
or negligence of his counsel or of the latter’s employee and
may not be heard to complain that the result of the litigation
might have been different had he proceeded differently
(Inocando v. Inocando, 100 Phil. 266)
WHEREFORE, the motion is hereby DENIED.
Petitioner presents himself as a mere farmer seeking the
Court’s leniency to the point of disregarding the rules on
reglementary period for filing pleadings. But he fails to point
out any circumstance which might lead the Court to conclude
that his station in life had in any way placed his half-brother in
a more advantageous position. As we see it, petitioner failed
to show diligence in pursuing his cause. His condition as a
farmer, by itself alone, does not excuse or exempt him from
being vigilant on his right. He cannot lay the blame solely on
his former lawyer. It is settled that clients are bound by the
mistakes, negligence and omission of their counsel.18 While,
exceptionally, a client may be excused from the failure of his
counsel, the circumstances obtaining in this case do not
convince the Court to take exception.
In seeking exemption from the above rule, petitioner claims
that he will suffer deprivation of property without due
process of law on account of the gross negligence of his
previous counsel. To him, the negligence of his former
counsel was so gross that it practically resulted to fraud
because he was allegedly placed under the impression that
the counsel had prepared and filed his appellant’s brief. He
thus prays the Court reverse the CA and remand the main
case to the court of origin for new trial.
reason of passion or personal hostility. 22 The Court finds no
such abuse of discretion in this case.
WHEREFORE, the instant petition is DISMISSED and the
assailed resolutions of the CA are AFFIRMED.
No pronouncement as to costs.
SO ORDERED.

Admittedly, this Court has relaxed the rule on the binding

effect of counsel’s negligence and allowed a litigant another
chance to present his case (1) where the reckless or gross
negligence of counsel deprives the client of due process of
law; (2) when application of the rule will result in outright
deprivation of the client’s liberty or property; or (3) where the
interests of justice so require.19 None of these exceptions
obtains here.

For a claim of counsel’s gross negligence to prosper, nothing

short of clear abandonment of the client’s cause must be
shown. Here, petitioner’s counsel failed to file the appellant’s
brief. While this omission can plausibly qualify as simple
negligence, it does not amount to gross negligence to justify
the annulment of the proceedings below.

In Legarda v. Court of Appeals,20 where the Court initially held

that the counsel’s failure to file pleadings at the trial court
and later on appeal amounted to gross negligence, the Court,
on motion of the respondent therein, granted reconsideration
and applied the general rule binding the litigant to her
counsel’s negligence. In said case, the Court noted that the
proceedings which led to the filing of the petition "were not
attended by any irregularity." The same observation squarely
applies here.

To recapitulate, petitioner is not entitled to relief under Rule

38, Section 2 of the Rules of Court. He was not prevented
from filing his notice of appeal by fraud, accident, mistake or
excusable negligence, as in fact he filed one. The relief
afforded by Rule 38 will not be granted to a party who seeks
to be relieved from the effects of the judgment when the loss
of the remedy of law was due to his own negligence, or a
mistaken mode of procedure for that matter; otherwise, the
petition for relief will be tantamount to reviving the right of
appeal which has already been lost, either because of
inexcusable negligence or due to a mistake of procedure by
counsel.21 The Rules allow a petition for relief only when there
is no other available remedy, and not when litigants, like the
petitioner, lose a remedy by negligence.

On a final note, the extraordinary writ of certiorari may be

issued only where it is clearly shown that there is patent and
gross abuse of discretion as to amount to an evasion of
positive duty or to virtual refusal to perform a duty enjoined
by law, or to act at all in contemplation of law, as where the
power is exercised in an arbitrary and despotic manner by
G.R. No. 139596 January 24, 2006
CHARLES CU-UNJIENG, Petitioner,
vs.
HON. COURT OF APPEALS and UNI0N BANK OF THE
PHILIPPINES, Respondents.
DECISION
GARCIA, J.:
By this petition for review on certiorari, petitioner Charles Cu-
Unjieng seeks the reversal of the following issuances of the
Court of Appeals (CA) in CA-G.R. CV No. 8177-B-
UDK, entitled Charles Cu-Unjieng, plaintiff-appellant vs. Union
Bank of the Philippines, et al., defendants-appellees, to wit:
1. Resolution1 dated May 10,1999, dismissing, for
non-payment of docket and other lawful fees,
petitioner’s appeal from an earlier decision of the
Regional Trial Court at Malolos, Bulacan which
dismissed his complaint for specific performance and
damages against respondent Union Bank of the
Philippines and others; and
2. Resolution2 dated July 30, 1999 which denied
petitioner’s Motion for Reconsideration and ordered
expunged the appeal brief thereto attached.
The facts:
Respondent Union Bank of the Philippines (UBP) is the owner
of a parcel of agricultural land with an area of 218,769 square
meters situated in Barangay Sta. Maria, San Miguel, Bulacan
and registered in its name under Transfer Certificate of Title
(TCT) No. TC-1062 of the Registry of Deeds of Bulacan.
Sometime in January 1994, UBP caused the posting on the
bulletin boards of its branch offices of a three-page list of
acquired realty assets available for sale to interested parties.
Included in said list was the aforementioned parcel of land,
offered to be sold for P2,200,000.00.
Petitioner, through a letter3 dated April 11, 1994 and
addressed to Joselito P. Valera, manager of UBP’s Acquired
Assets Department, offered to buy the subject property for a
lesser amount of P2,078,305.50, payable as follows: 50% as
down payment with the balance to be paid in equal monthly
installments over a period of two (2) years. Petitioner
explained that his offer for an amount lesser than UBP’s
asking price was on account of five (5) tenants occupying the
subject land who were allegedly demanding P500,000.00 to
voluntarily vacate the same.
As proof of his interest to buy the property, petitioner
tendered PCIB Check No. 565827 for P103,915.27,
purportedly representing 10% of the 50% down payment as
earnest money or deposit. UBP acknowledged receipt thereof
by way of Union Bank Receipt No. 495081 dated April 11,
1994.
On August 30, 1994, petitioner wrote a follow-up letter to
UBP inquiring on the status of his offer to buy the subject
premises.4
Via a reply-letter dated August 31, 1994, the manager of
UBP’s Acquired Assets Department advised petitioner that his
offer to purchase is yet to be acted upon because the bank
was still awaiting the opinion of its legal division regarding the
sale of "CARPable" agricultural assets acquired by the bank. 5
As it turned out, UBP rejected petitioner’s offer as shown by
the fact that in another letter6 dated December 19, 1994, the
bank informed petitioner that his offer could not be favorably
acted upon on account of the legal division’s opinion that
sales of lands covered by the Comprehensive Agrarian Reform
Law without prior Department of Agrarian Reform (DAR)
approval are considered null and void. Accordingly, UBP
advised petitioner to pick up the refund of his P103,915.27
"earnest money" at the bank’s disbursing unit.
Unable to accept UBP’s rejection of his offer, petitioner,
through counsel, made a formal demand7 for the bank to
comply with its obligation to transfer and deliver the title of
the subject property to him by executing the proper deed of
conveyance, under the terms and conditions set forth in his
April 11, 1994 offer.
Responding thereto, UBP, thru its counsel, Atty. Luzano, in a
letter8 dated July 19, 1995, reiterated the bank’s rejection of
petitioner’s offer as "the land being carpable could only be
disposed of by the bank either thru Voluntary Offer to Sell
(VOS) or compulsory acquisition, the procedure of which is
outlined in Sec. 16" of Republic Act (RA) No. 6657.
It was against the foregoing backdrop of events that, on
February 6, 1997, in the Regional Trial Court (RTC) at Malolos,
Bulacan, petitioner filed his complaint9 in this case for Specific
Performance and Damages against UBP, impleading as co-
defendant in the suit the Register of Deeds of Bulacan.
Docketed as Civil Case No. 80-M-97 and raffled to Branch 9 of
the court, the complaint principally sought UBP’s compliance
with an alleged perfected contract of sale between it and
petitioner relative to the parcel of land in question. More
specifically, the complaint prays for a judgment ordering UBP
to:
a) accept payments from the plaintiff [petitioner] for
the sale of the Property in accordance with the
terms and conditions of the letter dated 11 April
1994;
 b) execute a Deed of Absolute Sale over the Property
covered by TCT No. TC 1062 of the Registry of Deeds
of the Province of Bulacan upon the plaintiff’s full
payment of the amount of Two Million Seventy Eight
Thousand Three Hundred Five & 50/100
(P2,078,305.50), failing in which, the deputy sheriff
should be ordered to execute such deed and the
Registry of Deeds to cancel the title of the Bank and
issue a new one in favor of the plaintiff;
c) pay plaintiff the sum of Five Hundred Thousand
Pesos (P500,000.00) as moral damages;
d) pay plaintiff the sum of Five Hundred Thousand
Pesos (P500,000.00) as exemplary damages;
e) pay plaintiff the sum of Four Hundred Thousand
Pesos (P400,000.00) as attorney’s fees; and
f) pay the costs of the suit.
Other reliefs, just and equitable under the premises, are
likewise respectfully prayed for.
After due proceedings, the trial court, in a decision dated
September 1, 1998,10 upon a finding that no perfected
contract of sale transpired between the parties, dismissed
petitioner’s complaint for lack of sufficient cause of action,
thus:
WHEREFORE, on the basis of the evidence adduced and the
laws/jurisprudence applicable thereon, judgment is hereby
rendered DISMISSING the complaint in the above entitled
case for want of sufficient cause of action as well as the
defendant’s counterclaim for damages and attorney’s fees for
lack of proof to warrant the same.
However, defendant Union Bank of the Philippines is ordered
to reimburse plaintiff Charles Cu-Unjieng the amount of
P103,915.27 representing the face value of PCIBank Check
No. 565827 tendered by the latter to the former as purported
"earnest money", with interest thereon at the prevailing rates
of interest periodically bestowed by UBP to its savings
depositors from April 11, 1994, through the succeeding years,
and until the full amount thereof shall have been delivered to
the plaintiff.
No pronouncement as to costs.
SO ORDERED.
With his motion for reconsideration having been denied,
petitioner filed with the trial court a Notice of Appeal11therein
making known that he is taking an appeal from the adverse
decision to the CA. Acting thereon, the trial court issued an
Order12 directing the elevation of the records of the case to
the CA, whereat petitioner’s appeal was docketed as CA-G.R.
CV No. 8177-B-UDK.
As things would have it, in the herein first assailed Resolution
dated May 10, 1999, the CA dismissed petitioner’s appeal for
nonpayment of the required docket and other lawful appeal
fees, to wit:
For failure of the appellant [petitioner] to pay the docket and
other lawful fees (Sec. 4, Rule 41, 1997 Rules of Civil
Procedure), the Court Resolved to DISMISS the appeal
pursuant to Sec. 1(c), Rule 50 of the same Rule.
SO ORDERED.13
Petitioner filed a Motion for Reconsideration, attaching
thereto his appellant’s brief. However, in a
subsequent Resolution dated July 30, 1999,14 the appellate
court denied the motion and even expunged from the record
the appellant’s brief thereto attached:
Acting on the motion of the plaintiff-appellant [petitioner] for
a reconsideration of the Resolution of May 10, 1999, which
dismissed the appeal for the reason stated therein, and
considering the opposition interposed thereto by defendant-
appellee [respondent] Union Bank of the Philippines and it
appearing that the filing of the notice of appeal of November
5, 1988, was not accompanied by the full and correct
payment of the corresponding appellate court docket and
other lawful fees, and for such tardiness of more than four (4)
months, the Court resolved to DENY the motion for
reconsideration and the attached brief thereto
ordered EXPUNGED.
In Pedrosa vs. Hill, 257 SCRA 373, the Supreme Court, citing
Rodillas vs. Commission on Elections (245 SCRA 702 aptly
said:
xxx the mere filing of the notice of appeal was not enough. It
should be accompanied by the payment of the correct
amount of appeal fee. In other words, the payment of the full
amount of the docket fee is an indispensable step for the
perfection of an appeal. In both original and appellate cases,
the court acquires jurisdiction over the case only upon the
payment of the prescribed docket fees. Well-rooted is the
principle that perfection of an appeal within the statutory or
reglementary period is not only mandatory but also
jurisdictional and failure to do so renders the questioned
decision final and executory, and deprives the appellate court
or body of jurisdiction to alter the final judgment much less to
entertain the appeal. This requirement of an appeal fee is by
no means a mere technicality of law or procedure. It is an
essential requirement without which the decision appealed
from would become final and executory, as if no appeal was
filed at all.
SO ORDERED.
Undaunted, petitioner is now with us via the present recourse
seeking a relaxation of procedural rules and ultimately the
reversal and setting aside of the assailed twin resolutions of
the appellate court.
Petitioner would have the Court view his failure to pay the
appeal docket fees on time as a non-fatal lapse, or a non-
jurisdictional defect which the CA should have ignored in
order to attain substantial justice. Further, petitioner passes
the blame to the RTC clerk of court who allegedly made the
erroneous computation of docket fees.
We are not persuaded.
Doctrinally entrenched is the pronouncement that the right to
appeal is merely statutory and a party seeking to avail of that
right must comply with the statute or rules.15
Rule 41, Section 4, of the 1997 Rules of Civil Procedure
provides:
SEC. 4. Appellate court docket and other lawful fees. – Within
the period for taking an appeal, the appellant shall pay to the
clerk of the court which rendered the judgment or final order
appealed from, the full amount of the appellate court docket
and other lawful fees. Proof of payment of said fees shall be
transmitted to the appellate court together with the original
record or the record on appeal.
Well-settled is the rule that payment of the docket and other
legal fees within the prescribed period is both mandatory and
jurisdictional,16 noncompliance with which is fatal to an
appeal. For, to stress, appeal is not a matter of right, but a
mere statutory privilege.17
An ordinary appeal from a decision or final order of the RTC
to the CA must be made within fifteen (15) days from
notice.18 And within this period, the full amount of the
appellate court docket and other lawful fees must be paid to
the clerk of the court which rendered the judgment or final
order appealed from.
Time and again, this Court has consistently held that full
payment of docket fees within the prescribed period is
mandatory for the perfection of an appeal. Without such
payment, the appeal is not perfected and the appellate court
does not acquire jurisdiction to entertain the appeal, thereby
rendering the decision sought to be appealed final and
executory.19
For sure, nonpayment of the appellate court docket and other
lawful fees within the reglementary period as provided under
Section 4, Rule 41, supra, is a ground for the dismissal of an
appeal under Section 1(c) of Rule 50, to wit:
SECTION 1. Grounds for dismissal of appeal.- An appeal may
be dismissed by the Court of Appeals, on its own motion or
on that of the appellee, on the following grounds:
c. Failure of the appellant to pay the docket and other lawful
fees as provided in section 4 of Rule 41; xxx
This Court has invariably sustained the CA’s dismissal on
technical grounds under the aforequoted provision unless
considerations of equity and substantial justice present
cogent reasons to hold otherwise. True, the rules may be
relaxed but only for persuasive and weighty reasons, to
relieve a litigant of an injustice commensurate with his failure
to comply with the prescribed procedure.20 So it is that in La
Salette College vs. Victor Pilotin,21 we held:
Notwithstanding the mandatory nature of the requirement of
payment of appellate docket fees, we also recognize that its
strict application is qualified by the following: first, failure to
pay those fees within the reglementary period allows only
discretionary, not automatic, dismissal; second, such power
should be used by the court in conjunction with its exercise of
sound discretion in accordance with the tenets of justice and
fair play, as well as with a great deal of circumspection in
consideration of all attendant circumstances
Then, too, in Mactan Cebu International Airport Authority
(MCIAA) vs. Mangubat,22 we held that late payment of docket
fees may be admitted when the party showed willingness to
abide by the Rules by immediately paying the required
fees. Mactan, however, cannot be a source of comfort for
herein petitioner. For there, the appellate docket fees were
paid six (6) days after the timely filing of the notice of appeal.
Unlike in Mactan, payment of the appellate docket fees in this
case was effected by petitioner only after four (4) months
following the expiration of the reglementary period to take an
appeal.
With the reality obtaining in this case that payment of the
appellate docket fees was belatedly made four (4) months
after the lapse of the period for appeal, it appears clear to us
that the CA did not acquire jurisdiction over petitioner’s
appeal except to order its dismissal,23 as it rightfully did. Thus,
the September 1, 1998 decision of the RTC has passed to the
realm of finality and became executory by operation of law.
We must emphasize that invocation of substantial justice is
not a magical incantation that will automatically compel this
Court to suspend procedural rules. Rules of procedure are not
to be belittled or dismissed simply because their non-
observance may have resulted in prejudice to a party’s
substantive rights. Like all rules, they are required to be
followed. So it must be here.
WHEREFORE, petition is DENIED and the assailed resolutions
dated May 10,1999 and July 30, 1999 of the Court of
Appeals AFFIRMED.
G.R. No. 162772 March 14, 2008
MERLIZA A. MUÑOZ, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
By way of a Petition for Review on Certiorari under Rule 45 of
the Rules of Court, Merliza A. Muñoz (petitioner) assails the
November 19, 2003 Resolution1 of the Court of Appeals (CA)
sustaining her conviction for violation of Batas Pambansa
Bilang 22 (B.P. Blg. 22); and the March 10, 2004 CA
Resolution2 denying her Motion for Reconsideration.
The antecedent facts are as stated by the trial courts.
Petitioner is the wife of Ludolfo P. Muñoz Jr. (Ludolfo), owner
and operator of L.P. Munoz Construction (Muñoz
Construction). On August 3, 2000, Ludolfo took a loan of
₱500,000.00, at 5% interest, from Sunwest Construction and
Development Corporation (Sunwest). Ludolfo issued to
Sunwest a Development Bank of the Philippines (DBP) check,
postdated September 3, 2000, for ₱500,000.00.3
On September 3, 2000, Ludolfo sought an extension of his
loan by replacing the DBP check with Rizal Commercial
Banking Corporation (RCBC) Check No. 0000057285 for
₱500,000.00, drawn by petitioner4 and postdated December
3, 2000. Sunwest accepted the replacement check. 5
On February 5, 2001 Sunwest deposited the RCBC check with
the Bank of the Philippine Islands (BPI), Legaspi City, 6 which
presented it to the drawee bank RCBC, but the latter
dishonored the check for insufficiency of funds. 7Thus, on
February 8, 2001, Sunwest sent by registered mail a letter
addressed to Ludolfo, informing him of the dishonor of the
RCBC check and demanding that he make good the check or
pay the amount thereof within five days from receipt of said
notice.8 The letter was received on the same day by Eden
Barnedo at the postal address "L.P. Muñoz, Jr. [sic]
Construction, Fernando Avenue, Doña Maria Subd., Daraga,
Albay."9
On March 14, 2001, Sunwest sent by registered mail another
letter, this time addressed to petitioner, informing her of the
dishonor of the RCBC check and demanding that she pay the
said check within five days from receipt of the letter. 10 The
letter was received on March 20, 2001 by Eden Barnedo at
the postal address, "Fernando Avenue, Doña Maria Subd.,
Daraga, Albay".11
In her March 20, 2001 reply to Sunwest, petitioner explained
that Sunwest and Muñoz Construction had mutual claims
against each other: Muñoz Construction had a claim against
Sunwest for ₱10,000,000.00, including a 15% advance
payment, for two river control projects, while Sunwest had a
claim against Muñoz Construction for ₱500,000.00. Given that
the claim of Muñoz Construction was bigger than that of
Sunwest, petitioner treated the first claim as having
automatically offset, covered or paid the second claim as
represented by the amount of the RCBC check. This explains
why petitioner did "not give emphasis" anymore to the RCBC
check, the amount of which she considered as having been
already settled. Petitioner reminded Sunwest that it was
made aware of the offsetting of the amount of the RCBC
check as early as February 15, 2001.12
Upon a criminal complaint13 filed by Elizaldy S. Co, Sunwest
president, an Information14 was filed by the City Prosecutor
before the Municipal Trial Court in Cities (MTCC), Legaspi City,
charging petitioner with violation of B.P. Blg. 22. Petitioner
entered a plea of "Not Guilty."15
After trial, the MTCC rendered a Decision dated August 19,
2003,16 finding petitioner guilty beyond reasonable doubt of
the crime charged, and sentencing her to pay a fine of
₱200,000.00; to pay Sunwest ₱500,000.00, representing the
amount of RCBC Check No. 0000057285, plus interest thereon
at the rate of 12% per annum computed from April 23, 2001,
the date of the filing of the information, until fully paid; and
to pay the costs. 17
On appeal by petitioner, the Regional Trial Court (RTC),
Legaspi City, in a Decision dated October 16, 2003, affirmed
the MTCC Decision in toto.18
Petitioner filed a Petition for Review with the CA but the latter
dismissed it outright in the November 19, 2003 Resolution
assailed herein, citing the following grounds:
(a) Failure to attach or incorporate an Affidavit of
Service as required under Section 13, Rule 13 in
relation to Section 3, Rule 42 of the 1997 Rules of
Civil Procedure, as amended; and
(b) Failure to furnish copy of the petition and its
annexes to the Office of the Solicitor General which
is the counsel of the People of the Philippines.19
With the denial by the CA of her Motion for Reconsideration,
petitioner is now before the Court raising the following issues:
Whether or not the Fifth Division of the Court of Appeals
gravely erred in dismissing the petition for review filed by
herein petitioner purely on technical grounds.
Whether or not the court a quo gravely erred in convicting
the petitioner notwithstanding the fact that the criminal
complaint was filed by an unauthorized representative of the
private complainant corporation.
Whether or not the court a quo gravely erred in convicting
the petitioner notwithstanding the fact that the prosecution
failed to prove the element of knowledge of insufficiency of
funds in or credit with the drawee bank on the part of the
petitioner.
Whether or not the court a quo gravely erred when it held the
petitioner civilly liable notwithstanding the absence of
authority of Elizaldy S. Co to file the instant case for and in
behalf of the private complainant corporation.20
The Court finds no merit in the Petition.
Except in criminal cases in which the penalty imposed
is reclusion perpetua or death, an appeal is not a matter of
right but of sound judicial discretion. It may be availed of only
in the manner provided by law and the rules.21
Rule 42 prescribes the following requirements for the filing
with the CA of a petition for review from a decision of the
RTC:
Section 1. How appeal taken; time for filing. A party desiring
to appeal from a decision of the Regional Trial Court rendered
in the exercise of its appellate jurisdiction may file a verified
petition for review with the Court of Appeals, paying at the
same time to the clerk of said Court the corresponding docket
and other lawful fees, depositing the amount of ₱500.00 for
costs, and furnishing the Regional Trial Court and the adverse
party with a copy of the petition. The petition shall be filed
and served within fifteen (15) days from notice of the
decision sought to be reviewed or of the denial of petitioner’s
motion for new trial or reconsideration filed in due time after
judgment. Upon proper motion and the payment of the full
amount of the docket and other lawful fees and the deposit
for costs before the expiration of the reglementary period,
the Court of Appeals may grant an additional period of fifteen
(15) days only within which to file the petition for review. No
further extension shall be granted except for the most
compelling reason and in no case to exceed fifteen (15) days.
(Emphasis supplied.)
Clearly, therefore, the timeliness of a petition depends not
only on its seasonable filing but also on the prompt service of
copy thereof on the adverse party and the RTC. Thus, the
petition must be accompanied by proof of service as
prescribed under Rule 13, viz:
Section 13. Proof of service. Proof of personal service shall
consist of a written admission of the party served, or the
official return of the server, or the affidavit of the party
serving, containing a full statement of the date, place and
manner of service. If the service is by ordinary mail, proof
thereof shall consist of an affidavit of the person mailing of
facts showing compliance with section 7 of this Rule. If service
is made by registered mail, proof shall be made by such
affidavit and the registry receipt issued by the mailing office.
The registry return card shall be filed immediately upon its
receipt by the sender, or in lieu thereof the unclaimed letter
together with the certified or sworn copy of the notice given
by the postmaster to the addressee.
Failure to serve copy of the petition on the adverse party or
to show proof of service thereof is a fatal defect,22 for which
the petition can be dismissed under Section 3, Rule 42, thus:
Section 3. Effect of failure to comply with requirements. The
failure of the petitioner to comply with any of the foregoing
requirements regarding the payment of the docket and other
lawful fees, the deposit for costs, proof of service of the
petition, and the contents of and the documents which
should accompany the petition shall be sufficient ground for
the dismissal thereof.
In the present case, petitioner failed to serve copy of her
petition on the Solicitor General as counsel of the adverse
party, the People of the Philippines.23 Hence, the CA did not
commit any reversible error in dismissing her petition.24
Petitioner did not even show substantial compliance with the
requirement of service of pleading.25 Although she served
copy of her Petition for Review on Assistant City Prosecutor
Catalino C. Serrano, the latter was no longer counsel of the
adverse party when the case was brought to the CA, nor was
he specifically deputized or designated by the Solicitor
General to represent him or receive notices for him.26 Hence,
service on the Assistant City Prosecutor did not amount to
service on the Solicitor General.27
However, petitioner argues that, rather than dismiss her
petition, the CA should have advised her to correct the
deficiency or taken the initiative of furnishing the Solicitor
General with a copy of the petition and requiring the latter to
comment on it.28 Furthermore, petitioner appeals for
liberality in the treatment of her appeal, so that it may be
decided on the merits rather than on technicality.29
It is true that oftentimes the Court applied the rules with
flexibility in order that the merits of a case will be fully
adjudicated upon, not-withstanding its technical
imperfections.30 But what impels the Court to do so is neither
a party's empty invocations of liberality nor its mechanical
correction of the imperfections.31 Rather, only a clear showing
of prima facie merit of the petition will persuade the Court to
take the extraordinary effort of setting aside its rules to give
way to the imperfect petition.32 After all, the rationale for
liberality is to bring to light the merits of the petition,
unobstructed by mere deficiencies in its form, such that if the
petition has not an iota of merit in it, then there is nothing for
the Court to bring to light at all.
In the present case, while upon motion for reconsideration,
petitioner supplied what were lacking in her petition for
review filed with the CA,33 she utterly failed to convince the
Court that the substantial grounds cited therein
far transcend its technical deficiencies as would justify the
resolution of her petition on its merits rather than form.
A cursory assessment of the arguments of petitioner is
necessary.
First, petitioner insists that the criminal case filed against her,
as well as the civil case that was deemed instituted with it,
should have been dismissed for lack of authority of Elizaldy Co
to file the same on behalf of Sunwest, the payee of the RCBC
check.34
The issue of whether a corporate officer may bring suit on
behalf of his corporation for violation of B.P. Blg. 22 is not
novel. In Tam Wing Tak v. Makasiar,35 the Court affirmed the
dismissal of a criminal case for violation of B.P. Blg. 22 for lack
of authority of the private complainant, thus:
or failed to allege the same in said motion, shall be deemed a
waiver of any objections except those based on the grounds
provided for in paragraphs (a), (b), (g), and (i) of section 3 of
this Rule.
The deficiency in the complaint/information arising from the
lack of authority of Elizaldy Co was not jurisdictional. It did
not detract from the unquestioned authority of the Assistant
City Prosecutor to file the Information, nor impair the
jurisdiction of the MTCC to act on the same. 38
Second, petitioner harps on the purported lack of notice to
her of the dishonor of the RCBC check. This contention flies in
the face of documentary evidence consisting of the March 20,
2001 letter of petitioner to Sunwest where she expressly
acknowledged receiving the March 14, 2001 notice of
dishonor of the RCBC check.39
In fine, for deficiency in form and for lack of showing that her
appeal to the CA was meritorious, the petition for review of
petitioner was correctly dismissed by the CA.

Second, it is not disputed in the instant case that Concord, a WHEREFORE, the petition is DENIED.
domestic corporation, was the payee of the bum check, not
petitioner. Therefore, it is Concord, as payee of the bounced Costs against petitioner.
check, which is the injured party. Since petitioner was neither
a payee nor a holder of the bad check, he had neither the SO ORDERED.
personality to sue nor a cause of action against Vic Ang
Siong. Under Section 36 of the Corporation Code, read in
relation to Section 23, it is clear that where a corporation is
an injured party, its power to sue is lodged with its board of
directors or trustees. Note that petitioner failed to show any
proof that he was authorized or deputized or granted
specific powers by Concord's board of director to sue Victor
And Siong for and on behalf of the firm. Clearly, petitioner
as a minority stockholder and member of the board of
directors had no such power or authority to sue on
Concord's behalf. x x x36 (Emphasis supplied)

We applied the same rule just recently to Ilusorio v.

Ilusorio,37 which involved a criminal complaint for robbery and
qualified trespass.

However, it bears emphasis that in both cases, the deficiency

in the complaint was challenged by the accused at the
preliminary investigation stage, or before he entered a plea
upon arraignment. On the contrary, in the present case,
petitioner questioned the authority of Elizaldy Co after
arraignment and completion of the prosecution's
presentation of evidence. Thus, she is barred from raising
such objection under Section 9, Rule 117 of the Rules of
Court, to wit:

Section 9. Failure to move to quash or to allege any ground

therefor. – The failure of the accused to assert any ground of
a motion to quash before he pleads to the complaint or
information, either because he did not file a motion to quash
G.R. No. 173956 August 6, 2008
FRISCO F. SAN JUAN, petitioner,
vs.
THE SANDIGANBAYAN and THE PEOPLE OF THE
PHILIPPINES, respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for certiorari under Rule 65 of the Rules of Court
assails the February 6, 2006 Resolution1 of the Sandiganbayan
in Criminal Case No. 27808 granting the prosecution’s
Manifestation with Motion for Additional Marking of
Documentary Exhibits and the June 21, 2006
Resolution2 denying the motions for reconsideration
separately filed by petitioner and his co-accused.
Petitioner Frisco F. San Juan, in his capacity as Chairman of
the Public Estates Authority (PEA), together with 26 other
accused, composed of PEA Board of Directors, PEA Officers,
Officers of the Commission on Audit and the contractor of
Central Boulevard Project (now the President Diosdado
Macapagal Boulevard), Jesusito D. Legaspi, were charged
before the Sandiganbayan with violation of Sec. 3 (e) of
Republic Act No. 30193 in an Information which reads:
That in or about the period from April 1999 to
August 2002, in Metro Manila, Philippines, and
within the jurisdiction of this Honorable Court,
accused public officials of the Public Estates
Authority (PEA), namely: CARLOS P. DOBLE, former
General Manager (with Salary Grade 30) and ex-
oficio member of the PEA Board, BENJAMIN V.
CARIÑO, PEA General Manager (with Salary Grade
30) and ex-oficio member of the Board, and other
responsible public officials of PEA, namely: FRISCO
FRANCISCO SAN JUAN, former Chairman of the
Board, CARMELITA DE LEON-CHAN, DANIEL T. DAYAN,
SALVADOR P. MALBAROSA, LEO V. PADILLA and
ELPIDIO G. DAMASO, all former members of the
Board, ERNEST FREDERICK O. VILLAREAL, Chairman
of the Board, and JOEMARI D. GEROCHI, ANGELITO
M. VILLANUEVA, MARTIN S. SANCIEGO, JR., and
RODOLFO T. TUAZON, all Board members, JAIME R.
MILLAN, Assistant General Manager, MANUEL R.
BERIÑA, JR., Deputy General Manager for Operations
& Technical Services and Chairman of the Ad Hoc
Committee responsible for the bidding and award of
the construction contract for the President Diosdado
Macapagal Boulevard Project, THERON VICTOR V.
LACSON, Deputy General Manager for Finance, Legal
and Administration and member of the Ad Hoc
Committee, BERNARDO T. VIRAY, Manager for
Technical Services Department and member of the
Ad Hoc Committee, RAPHAEL POCHOLO A. ZORILLA,
Project Management Officer, ERNESTO L. ENRIQUEZ,
Senior Corporate Attorney and member of the Ad
Hoc Committee, and CRISTINA AMPOSTA-MORTEL,
Department Manager, Legal Department, and other
responsible public officials of the Commission on
Audit (COA), namely: MANUELA E. DELA PAZ, State
Auditor V, ARTURO S. LAYUG, State Auditor V and
Chief of the Technical Services Audit Division A,
Technical Services Office, BENILDA E. MENDOZA,
Supervising Technical Audit Specialist, EPIFANIO L.
PUREZA, Assistant Chief of the Technical Services
Audit Division A, JOSE G. CAPISTRANO, Technical
Audit Specialist II, and MA. CECILIA A. DELA RAMA,
Technical Audit Specialist I, all of whom were public
officials during the times material to the subject
offense, while said public officials were occupying
their respective positions as just stated, acting in
such capacity and committing the subject offense in
relation to office and while in the performance of
their functions and duties, with manifest partiality
and evident bad faith (or at the very least, gross
inexcusable negligence), conspiring and
confederating with accused JESUSITO D. LEGASPI, a
private contractor doing business under the name of
J.D. Legaspi Construction, did then and there,
willfully, unlawfully and criminally give unwarranted
benefits, advantage and preference to accused
JESUSITO D. LEGASPI, through the commission of
numerous illegal related acts all pertaining to the
President Diosdado Macapagal Boulevard Project,
such as (but not limited to) the bidding out of the
said project and illegally awarding the same to
accused JESUSITO D. LEGASPI’s J.D. Legaspi
Construction and approving the award of the project
to, as well as the Construction Agreement with, J.D.
Legaspi Construction despite the lack of compliance
with the mandatory requirements and procedure for
bidding, even if no funds are yet available to finance
the project, without the requisite certificate of
availability of funds and without complying with the
mandatory conditions imposed by the Office of the
President of the approval thereof, per Memorandum
dated 29 January 2000 from the Office of the
Executive Secretary, Malacañang, and
approving/allowing several improper
variation/change orders and overruns to be
implemented without the requisite presidential
approval and the appropriate funds, recognizing,
affirming and causing the implementation of the just-
mentioned void contract, allowing and paying or
causing the allowance and payment of several claims
of accused JESUSITO D. LEGASPI for initial contract
price, contract price adjustment, variation orders,
overruns and other claims even when the same were
clearly improper, illegal and without the requisite
presidential approval, thereby paving the way for
 accused JESUSITO D. LEGASPI to claim and receive
undue payments from the Government totaling
millions of pesos in improper overprice, thereby
causing undue injury and grave damage to the
government in the aggregate amount of at least FIVE
HUNDRED THIRTY TWO MILLION NINE HUNDRED
TWENTY-SIX THOUSAND FOUR HUNDRED TWENTY
AND 39/100 PESOS (P532,926,420.39), more or less,
constituting the total illegal overprice paid to
accused JESUSITO D. LEGASPI for the subject Project.
CONTRARY TO LAW.4
When arraigned on January 21, 2005, petitioner and his co-
accused pleaded "not guilty."
The People, represented by the Office of the Special
Prosecutor (OSP), filed its pre-trial brief with proposed
Exhibits A to HHHH dated March 16, 2005. Petitioner filed his
pre-trial brief on June 23, 2005.
Thereafter, the Sandiganbayan issued a Pre-Trial Order, 5 the
pertinent portions of which state:
The Prosecution reserves the right to present
additional documentary evidence, although this
reservation was objected to by the accused on the
ground that it violates their constitutional right.6
xxxx
Accused Frisco F. San Juan reserves the right to
present additional documentary evidence.7
xxxx
This Pre-Trial Order shall bind the parties, limit the
issues and control the course of the trial, unless
modified by the Court to prevent manifest injustice.
SO ORDERED.8
On November 10, 2005, trial commenced with the OSP
presenting Karen Villamil as its first witness, without prejudice
to the signing of the Pre-Trial Order by the parties.
At the scheduled hearing on January 24, 2006, instead of
proceeding with the presentation of its evidence, the OSP
filed a manifestation with motion for additional marking of
documentary exhibits.9
Petitioner filed an Opposition10 alleging that the motion fails
to comply with the three (3) day notice rule, thus, it is fatally
defective which must be dismissed outright; that the
prosecution’s attempt to introduce additional evidence after
Pre-Trial has been completed, without petitioner having been
confronted by such evidence, violates petitioner’s
fundamental rights under the Constitution; that petitioner’s
right to due process has been violated by the presentation of
the prosecution’s "additional evidence" when such pieces of
evidence ought to have been presented during the pre-trial of
the case; that the prosecution failed to show "good cause" in
order for the "additional evidence" to be accepted, since only
those pieces of evidence which are identified and marked are
allowed by the court.
On February 6, 2006, the Sandiganbayan issued the herein
assailed Resolution11 granting the motion of the OSP, the
pertinent portion of which reads:
Acting on the Prosecution’s Manifestation with
Motion for Additional Marking of Documentary
Exhibits dated January 23, 2006, with the comments
and/or oppositions thereto separately filed by
accused: (1) Layug, (2) de Leon-Chan, (3) Pureza and
Capistrano, (4) Legaspi, (5) Padilla, (6) Beriña, Millan,
Viray and Zorilla, (7) San Juan, and (8)Amposta-
Mortel, the Court resolves to GRANT the
aforementioned motion but only insofar as to allow
additional marking of documentary exhibits which
have been sufficiently described in the said motion,
over the objection of the defense, in order to give
the Prosecution the opportunity to fully present its
case, and considering that the Pre-Trial Order has not
been signed by the parties. The defense may register
their objections to the documentary exhibits at the
time that the same are introduced in evidence. As
prayed for, the prosecution may present the
additional documents enumerated in its aforesaid
motion for marking, and the same shall be included
in its list of exhibits in the Amended Pre-Trial Order
to be issued by the Court.12
Petitioner and his co-accused filed separate motions for
reconsideration but were denied by the Sandiganbayan in its
June 21, 2006 Resolution,13 the pertinent portions of which
state:
While it is true that pre-trial has already been
terminated, records show that, before the Pre-Trial
Order dated November 7, 2005 was issued, the Court
made clear to all the parties, considering the
numerous documentary evidence sought to be
marked and presented by the parties, that the said
Order was "without prejudice to the comment [on
the Pre-Trial Order] of the prosecution and the
accused;" that is, the Court may still accept any
modification of the said Order from both the
prosecution and the accused. Upon request of the
parties, the Court gave the prosecution and the
accused a period of time "to file a formal
manifestation with respect to some changes they
would like to propose in the Pre-Trial Order"
notwithstanding the commencement of the trial.14
 xxxx
Apparent from the foregoing is the fact that while
the pre-trial has effectively been terminated, the
Court gave both the prosecution and the accused the
opportunity to submit comments to the Pre-Trial
Order or to modify their submissions or in some
instances, even to withdraw the stipulations they
made during the pre-trial. The Court’s position is
consistent with the exercise of its discretion to
decide how best to dispense justice in accordance
with the circumstances of the proceedings before it.
The decision to grant the prosecution’s motion for
additional marking of documentary exhibits is
another exercise of this judicial prerogative, which
prerogative was made known to the parties in the
Pre-Trial Order dated November 7, 2005, when the
Court stated that such was subject to modification
"in order to prevent manifest injustice."
The guidelines on the conduct of the pre-trial,
including A.M. No. 03-1-09-SC, were prescribed by
the Honorable Supreme Court to "abbreviate court
proceedings, ensure prompt disposition of cases and
decongest court dockets." The Court does not mean
to disregard or ignore these guidelines but the Court
is compelled to take into consideration, in the
interest of substantial justice, the various
submissions of both the prosecution and the accused
mentioned above in connection with the agreements
reached by the parties that they be allowed to
submit their comments on the pre-trial order, even
while the trial had begun so as not to delay the
proceedings.
WHEREFORE, in view of the foregoing, the instant
Motions for Reconsideration of the accused-movants
are hereby DENIED for lack of merit.
SO ORDERED.15
Hence, this petition.
The issues for resolution are: (1) whether the Sandiganbayan
gravely abused its discretion when it granted OSP’s motion for
additional marking of exhibits; and (2) whether the admission
of the "additional evidence" constitutes a violation of
petitioner’s constitutional right to due process.
The petition lacks merit.
Section 4, Rule 15 of the Rules of Court, reads:
SEC. 4. Hearing of motion. – Except for motions
which the court may act upon without prejudicing
the rights of the adverse party, every written motion
shall be set for hearing by the applicant.
Every written motion required to be heard and the
notice of the hearing thereof shall be served in such
a manner as to ensure its receipt by the other party
at least three (3) days before the date of hearing,
unless the court for good cause sets the hearing on
shorter notice.
While it is true that any motion that does not comply with the
requirements of Rule 15 should not be accepted for filing and,
if filed, is not entitled to judicial cognizance, however, this
Court has likewise held that where a rigid application of the
rule will result in a manifest failure or miscarriage of justice,
technicalities may be disregarded in order to resolve the
case.16 Besides, in the exercise of its equity jurisdiction, the
court may disregard procedural lapses, so that a case may be
resolved on its merits based on the evidence presented by
the parties.17 Moreover, under the above-cited Rule, the
Court is granted the authority to set the hearing on shorter
notice upon showing of good cause.
In the instant case, petitioner was served with the
Manifestation with Motion for Additional Marking of
Documentary Exhibits on January 24, 2006, or two days prior
to the scheduled hearing date on January 26,
2006.18 Although the three-day notice rule was not complied
with, the Sandiganbayan allowed the motion based on good
cause, i.e., that the markings of the additional documentary
evidence at this period was due to the sheer volume of the
supporting documents to the disbursement vouchers and the
fact that such supporting documents were only recently
completed and secured.19
This Court allows a liberal construction of this rule where the
interest of substantial justice will be served and where the
resolution of the motion is addressed solely to the sound and
judicious discretion of the court,20 as in the instant case. Thus,
the Sandiganbayan correctly held that:
Apparent from the foregoing is the fact that while
the pre-trial has effectively been terminated, the
Court gave both the prosecution and the accused the
opportunity to submit comments to the Pre-Trial
Order or to modify their submissions or in some
instances, even to withdraw the stipulations they
made during the pre-trial. The Court’s position is
consistent with the exercise of its discretion to
decide how best to dispense justice in accordance
with the circumstances of the proceedings before it.
The decision to grant the prosecution’s motion for
additional marking of documentary exhibits is
another exercise of this judicial prerogative, which
prerogative was made known to the parties in the
Pre-Trial Order dated November 7, 2005, when the
Court stated that such was subject to modification
"in order to prevent manifest injustice. 21 (Emphasis
supplied)
There is likewise no merit to petitioner’s contention that his
right to due process was violated when the OSP’s motion was
granted. In its Resolution of February 6, 2006, the
Sandiganbayan declared, thus:

T]he Court resolves to GRANT the aforementioned motion but only insofar as to allow

additional marking of documentary exhibits which have been sufficiently described in the

said motion, over the objection of the defense, in order to give the Prosecution the

opportunity to fully present its case, and considering that the Pre-Trial Order has not been

signed by the parties. The defense may register their objections to the documentary

exhibits at the time that the same are introduced in evidence. x x x22

In its Resolution dated June 21, 2006, the Sandiganbayan also

held that:

While it is true that pre-trial has already been

terminated, records show that, before the Pre-Trial
Order dated November 7, 2005 was issued, the Court
made clear to all the parties, considering the
numerous documentary evidence sought to be
marked and presented by the parties, that the said
Order was "without prejudice to the comment [on
the Pre-Trial Order] of the prosecution and the
accused;" that is, the Court may still accept any
modification of the said Order from both the
prosecution and the accused. Upon request of the
parties, the Court gave the prosecution and the
accused a period of time "to file a formal
manifestation with respect to some changes they
would like to propose in the Pre-Trial Order"
notwithstanding the commencement of the trial.23

Thus, petitioner can still file his objections to the

documentary evidence during trial on the merits of the case.

Finally, there is no basis to petitioner’s contention that the

additional pieces of documentary evidence were "surprise
evidence" because during the filing of their respective pre-
trial briefs, both parties have made reservations to present
additional documentary and testimonial evidence, as may be
necessary in the course of the trial;24 such reservations were
incorporated in the Pre-Trial Order.

WHEREFORE, the Petition for Certiorari is DISMISSED. The

February 6, 2006 Resolution of the Sandiganbayan in Criminal
Case No. 27808 granting OSP’s Manifestation with Motion for
Additional Marking of Documentary Exhibits, and the June 21,
2006 Resolution denying the motion for reconsideration,
are AFFIRMED.

SO ORDERED.