[G.R. No. 129718.
 August 17, 1998] The complaint and other initiatory pleadings referred to and subject of this Circular are
SANTO TOMAS UNIVERSITY HOSPITAL, petitioner vs. CESAR ANTONIO Y. SURLA and
EVANGELINE SURLA, respondents.
DECISION
VITUG, J.:
Can a compulsory counterclaim pleaded in an Answer be dismissed on the ground
of a failure to accompany it with a certificate of non-forum shopping?  This question is the
core issue presented for resolution in the instant petition.
First, a factual background.
On 26 December 1995, respondent spouses filed a complaint for damages against
petitioner Santo Tomas University Hospital with the Regional Trial Court of Quezon City
predicated on an allegation by the spouses that their son, Emmanuel Cesar Surla, while
confined at the said hospital for having been born prematurely, had accidentally fallen
from his incubator on 16 April 1995 possibly causing serious harm on the child. The case
was raffled and assigned to Branch 226 of the Regional Trial Court of Quezon City,
presided over by the Hon. Leah S. Domingo-Regala, and there docketed Civil Case No. Q-
95-25977.
On 28 February 1996, petitioner hospital filed its Answer with Compulsory
Counterclaim asserting that respondents still owed to it the amount of P82,632.10
representing hospital bills for Emmanuels confinement at the hospital and making a
claim for moral and exemplary damages, plus attorneys fees, by reason of the supposed
unfounded and malicious suit filed against it.
On 21 March 1996, petitioner received a copy of respondents Reply to
Counterclaim, dated 12 March 1996, that sought, inter alia, the dismissal of petitioners
counterclaim for its non-compliance with Supreme Court Administrative Circular No. 04-
94 requiring that a complaint and other initiatory pleadings, such as a counterclaim,
cross-claim, third (fourt, etc.) party complaint, be accompanied with a certificate of non-
forum shopping.
In its Rejoinder to respondents Reply to Counterclaim, petitioner contended that
the subject circular should be held to refer only to a permissive counterclaim, an
initiatory pleading not arising out of, nor necessarily connected with, the subject matter
of the plaintiffs claim but not to a compulsory counterclaim spawned by the filing of a
complaint and so intertwined therewith and logically related thereto that it verily could
not stand for independent adjudication. Petitioner concluded that, since its counterclaim
was compulsory in nature, the subject circular did not perforce apply to it. [1]
In its Order of 22 March 1996, the trial court dismissed petitioners counterclaim,it
held:
Administrative Circular No. 04-94 provides; among others:
the original civil complaint, counterclaim, cross-claim, third (fourth, etc) party complaint,
or complaint-in-intervention, petition or application wherein a party asserts his claim on
(sic) relief.
It will be noted that the counterclaim does not distinguish whether the same should be
permissive or compulsory, hence this Court finds that the counterclaim referred to in said
Circular covers both kinds.
WHEREFORE, the counterclaim of defendant is hereby DISMISSED. Let the pre-trial of
this case be set on May 14, 1996 at 2:00 oclock in the afternoon xxx [2]
On 16 April 1996, petitioner filed before the same court an Omnibus Motion seeking
a clarification of the courts Order of 14 March 1996 denying respondents Reply to
Counterclaim and reconsideration of the 22 nd March 1996 Order dismissing the
compulsory counterclaim.[3] On 22 April 1996, petitioner received a copy of the courts
Order, dated 16 April 1996, which pertinently read:
WHEREFORE, the Order dated March 14, 1996 is hereby clarified as follows:
x x x x x x x x x
The Reply to counterclaim filed by counsel for plaintiffs is hereby NOTED.
SO ORDERED.
"The Motion for Reconsideration of this Courts Order dated March 22, 1996 is hereby
DENIED. The pre-trial conference set on May 14, 1996 will go on as scheduled. [4]
Petitioner forthwith elevated the matter to the Court of Appeals by way of a special civil
action for certiorari under Rule 65, Revised Rules of Court, asseverating grave abuse of
discretion by public respondent in dismissing the compulsory counterclaim and in
espousing the view that Administrative Circular No. 04-94 should apply even to
compulsory counterclaims.
The Court of Appeals, in its Decision promulgated on 12 March 1997, dismissed the
petition for certiorari; it opined:
x x x the Supreme Court circular aforequoted requires without equivocation that to the
original civil complaint, counterclaim, cross-claim, third (fourth,etc.) party complainant,
or complaint-in-intervention, petition, or application wherein a party asserts his claim for
relief to be filed in all courts and agencies other than the Supreme Court and the Court of
Appeals must be annexed and simultaneously filed therewith the required certification
under oath to avoid forum shopping or multiple filing of petitions and complaints. Non-
compliance therewith is a cause for the dismissal of the complainant, petition, application
or other initiatory pleading. Included in such initiatory pleading is the defendants
counterclaim, permissive or compulsory.
A counterclaim partakes of the nature of a complaint and/or a cause of action against the
plaintiff in a case x x x, only this time it is the original defendant who becomes the
plaintiff. It stands on the same footing and is tested by the same rules as if it were an
independent action.[5]
In its present recourse, petitioner contends that
The Court of Appeals (has) committed serious, evident and palpable error in ruling that:
5.1 THE SPECIAL CIVIL ACTION OF CERTIORARI UNDER RULE 65 OF THE REVISED
RULES OF COURT IS UNAVAILING. THE DISMISSAL OF THE COMPULSORY
COUNTERCLAIM BEING A FINAL ORDER, THE PETITIONER SHOULD HAVE TAKEN AN
APPEAL THEREFROM; AND
5.2 ADMINISTRATIVE CIRCULAR NO. 04-94 OF THIS HONORABLE COURT
LIKEWISE APPLIES TO BOTH KINDS OF COUNTERCLAIMS, PERMISSIVE AND
COMPULSORY.
The petition is partly meritorious.
The appellate court ruled that the dismissal of the counterclaim, being a final order,
petitioners remedy was to appeal therefrom and, such appeal being then available, the
special civil action for certiorari had been improperly filed.
The concept of a final judgment or order, distinguished form an interlocutory
issuance, is that the former decisively puts to a close, or disposes of a case or a disputed
issue leaving nothing else to be done by the court in respect thereto. Once that judgment
or order is rendered, the adjudicative task of the court is likewise ended on the particular
matter involved.[7] An order is interlocutory, upon the other hand, if its effects would only
be provisional in character and would still leave substantial proceedings to be further
had by the issuing court in order to put the controversy to rest. [8]
The order of the trial court dismissing petitioners counterclaim was a final order
since the dismissal, although based on a technicality, would require nothing else to be
done by the court with respect to the specific subject except only to await the possible
filing during the reglementary period of a motion for reconsideration or the taking of an
appeal therefrom.
As a rule, errors of judgment, as well as of procedure, neither relating to the
jurisdiction of the court nor involving grave abuse of discretion, are not reviewable by the
extraordinary remedy of certiorari.[9] As long as a court acts within its jurisdiction and
does not gravely abuse its discretion in the exercise thereof, any supposed error
committed by it will amount to nothing more than an error of judgment reviewable by a
timely appeal and not assailable by a special civil action for certiorari.[10] This rule
however, is not a rigid and inflexible technicality.This Court has not too infrequently
given due course to a petition for certiorari, even when the proper remedy would have
been an appeal, where valid and compelling considerations could warrant such a
recourse.[11] Certiorari has been deemed to be justified, for instance, in order to prevent
irreparable damage and injury to a party where the trial judge has capriciously and
whimsically exercised his judgment, or where an ordinary appeal would simply be
inadequate to relieve a party from the injurious effects of the judgment complained of.
In the case at bar, an appeal from the dismissal of the counterclaim, although not
totally unavailable, could have well been ineffective, if not futile, as far as petitioner is
concerned since no single piece of evidence has yet been presented by it, the opportunity
having been foreclosed by the trial court, on the dismissed counterclaim which could
form part of the records to be reviewed by the appellate court. The object of procedural
law is not to cause an undue protraction of the litigation, but to facilitate the adjudication
of conflicting claims and to serve, rather than to defeat, the ends of justice.
 
The opinion of this Court on the next issue persuades it to accept, tested by the
foregoing disquisition, the instant petition for its consideration.
The pertinent provisions of Administrative Circular No. 04-94 provide:
1 The plaintiff, petitioner, applicant or principal party seeking relief in the complaint,
petition, application or other initiatory pleading shall certify under oath in such original
pleading, or in a sworn certification annexed thereto and simultaneously filed therewith,
to the truth of the following facts and undertakings: (a) he has not theretofore
commenced any other action or proceeding involving the same issues in the Supreme
Court, the Court of Appeals, or any other tribunal or agency; (b) to the best of his
knowledge, no such action or proceeding is pending in the Supreme Court, the Court of
Appeals, or any other tribunal or agency; (c) if there is any such action or proceeding
which is either pending or may have been terminated, he must state the status thereof;
and (d) if he should thereafter learn that a similar action or proceeding has been filed  or
is pending before the Supreme Court, the Court of Appeals or any other tribunal or
agency, he undertakes to report that fact within five (5) days therefrom to the court or
agency wherein the original pleading and sworn certification contemplated here have
been filed.
The complaint and other initiatory pleadings referred to and subject of this Circular are
the original civil complaint, counterclaim, cross-claim third (fourth, etc.) party
complaint or complaint-in-intervention, petition, or application wherein a party
asserts his claim for relief. (Emphasis supplied)
It bears stressing, once again, that the real office of Administrative Circular No. 04-
94, made effective on 01 April 1994, is to curb the malpractice commonly referred to also
as forum-shopping. It is an act of a party against whom an adverse judgment has been
rendered in one forum of seeking and possibly getting a favorable opinion in another
forum, other than by appeal or the special civil action of certiorari, or the institution of
two or more actions or proceedings grounded on the same cause on the supposition tha
tone or the other court would make a favorable disposition. [14] The language of the
circular distinctly suggests that it is primarily intended to cover an initiatory pleading or
an incipient application of a party asserting a claim for relief. [15]
It should not be too difficult, the foregoing rationale of the circular aptly taken, to
sustain the view that the circular in question has not, in fact, been contemplated to
include a kind of claim which, by its very nature as being auxiliary to the proceedings in
the suit and as deriving its substantive and jurisdictional support therefrom, can only be
appropriately pleaded in the answer and not remain outstanding for independent
resolution except by the court where the main case pends. Prescinding from the
foregoing, the provisio in the second paragraph of Section 5, Rule 8 of the 1997 Rules on
Civil Procedure, i.e., that the violation of the anti-forum shopping rule shall not be curable
by mere amendment x x x but shall be cause for the dismissal of the case without
prejudice, being predicated on the applicability of the need for a certification against
forum shopping, obviously does not include a claim which cannot be independently set
up.
Petitioner, nevertheless, is entitled to a mere partial relief. The so called
counterclaim of petitioner really consists of two segregative parts: (1) for unpaid hospital
bills of respondents son, Emmanuel Surla, in the total amount of P82,632.10; and (2) for
damages, moral and exemplary, plus attorneys fees by reason of the alleged malicious and
unfounded suit filed against it.[16] It is the second, not the first, claim that the Court here
refers to as not being initiatory in character and thereby not covered by the provisions of
Administrative Circular No. 04-94.
WHEREFORE, the appealed decision is hereby modified in that the claim for moral,
exemplary damages and attorneys fees in Civil Case No. Q-95-25977 of petitioner is
ordered reinstated. The temporary restraining order priorly issued by this Court is
lifted. No costs.
SO ORDERED.
Davide, Jr., Bellosillo, Panganiban  and Quisumbing, JJ.,  concur

[G.R. No. 102858. July 28, 1997]
THE DIRECTOR OF LANDS, petitioner, vs. COURT OF APPEALS and TEODORO
ABISTADO, substituted by MARGARITA, MARISSA, MARIBEL, ARNOLD and MARY
ANN, all surnamed ABISTADO, respondents.
DECISION
PANGANIBAN, J.:
Is newspaper publication of the notice of initial hearing in an original land
registration case mandatory or directory?
Statement of the Case
The Court of Appeals ruled that it was merely procedural and that the failure to
cause such publication did not deprive the trial court of its authority to grant the
application. But the Solicitor General disagreed and thus filed this petition to set aside the
Decision[1] promulgated on July 3, 1991 and the subsequent Resolution [2] promulgated on
November 19, 1991 by Respondent Court of Appeals [3] in CA-G.R. CV No. 23719. The
dispositive portion of the challenged Decision reads: [4]
"WHEREFORE, premises considered, the judgment of dismissal appealed from is hereby
set aside, and a new one entered confirming the registration and title of applicant,
Teodoro Abistado, Filipino, a resident of Barangay 7, Poblacion Mamburao, Occidental
Mindoro, now deceased and substituted by Margarita, Marissa, Maribel, Arnold and Mary
Ann, all surnamed Abistado, represented by their aunt, Miss Josefa Abistado, Filipinos,
residents of Poblacion Mamburao, Occidental Mindoro, to the parcel of land covered
under MSI (IV-A-8) 315-D located in Poblacion Mamburao, Occidental Mindoro.
The oppositions filed by the Republic of the Philippines and private oppositor are hereby
dismissed for want of evidence.
Upon the finality of this decision and payment of the corresponding taxes due on this
land, let an order for the issuance of a decree be issued."
The Facts
On December 8, 1986, Private Respondent Teodoro Abistado filed a petition for
original registration of his title over 648 square meters of land under Presidential Decree
(PD) No. 1529.[5] The application was docketed as Land Registration Case (LRC) No. 86
and assigned to Branch 44 of the Regional Trial Court of Mamburao, Occidental Mindoro.
[6]
 However, during the pendency of his petition, applicant died. Hence, his heirs --
Margarita, Marissa, Maribel, Arnold and Mary Ann, all surnamed Abistado -- represented
by their aunt Josefa Abistado, who was appointed their guardian ad litem, were
substituted as applicants.
The land registration court in its decision dated June 13, 1989 dismissed the
petition for want of jurisdiction. However, it found that the applicants through their
predecessors-in-interest had been in open, continuous, exclusive and peaceful possession
of the subject land since 1938.
In dismissing the petition, the trial court reasoned: [7]
"x x x. However, the Court noted that applicants failed to comply with the provisions of
Section 23 (1) of PD 1529, requiring the Applicants to publish the notice of Initial Hearing
(Exh. `E') in a newspaper of general circulation in the Philippines. Exhibit `E' was only
published in the Official Gazette (Exhibits `F' and `G'). Consequently, the Court is of the
well considered view that it has not legally acquired jurisdiction over the instant
application for want of compliance with the mandatory provision requiring publication of
the notice of initial hearing in a newspaper of general circulation."
The trial court also cited Ministry of Justice Opinion No. 48, Series of 1982, which in
its pertinent portion provides:[8]
It bears emphasis that the publication requirement under Section 23 [of PD 1529] has a
two-fold purpose; the first, which is mentioned in the provision of the aforequoted
provision refers to publication in the Official Gazette, and is jurisdictional; while the
second, which is mentioned in the opening clause of the same paragraph, refers to
publication not only in the Official Gazette but also in a newspaper of general circulation,
and is procedural. Neither one nor the other is dispensable. As to the first, publication in
the Official Gazette is indispensably necessary because without it, the court would be
powerless to assume jurisdiction over a particular land registration case. As to the
second, publication of the notice of initial hearing also in a newspaper of general
circulation is indispensably necessary as a requirement of procedural due process;
otherwise, any decision that the court may promulgate in the case would be legally
infirm.
Unsatisfied, private respondents appealed to Respondent Court of Appeals which,
as earlier explained, set aside the decision of the trial court and ordered the registration
of the title in the name of Teodoro Abistado.
The subsequent motion for reconsideration was denied in the challenged CA
Resolution dated November 19, 1991.
The Director of Lands represented by the Solicitor General thus elevated this
recourse to us. This Court notes that the petitioners counsel anchored his petition on Rule
65. This is an error. His remedy should be based on Rule 45 because he is appealing a
final disposition of the Court of Appeals. Hence, we shall treat his petition as one for
review under Rule 45, and not for certiorari under Rule 65. [9]
The Issue
Petitioner alleges that Respondent Court of Appeals committed grave abuse of
discretion[10] in holding
x x x that publication of the petition for registration of title in LRC Case No. 86 need not be
published in a newspaper of general circulation, and in not dismissing LRC Case No. 86
for want of such publication.
Petitioner points out that under Section 23 of PD 1529, the notice of initial hearing
shall be published both in the Official Gazette and in a newspaper of general
circulation. According to petitioner, publication in the Official Gazette is necessary to
confer jurisdiction upon the trial court, and xxx in xxx a newspaper of general circulation
to comply with the notice requirement of due process. [11]
Private respondents, on the other hand, contend that failure to comply with the
requirement of publication in a newspaper of general circulation is a mere procedural
defect. They add that publication in the Official Gazette is sufficient to confer jurisdiction.
[12]
In reversing the decision of the trial court, Respondent Court of Appeals ruled: [13]
x x x although the requirement of publication in the Official Gazette and in a newspaper of
general circulation is couched in mandatory terms, it cannot be gainsaid that the law also
mandates with equal force that publication in the Official Gazette shall be sufficient to
confer jurisdiction upon the court.
Further, Respondent Court found that the oppositors were afforded the opportunity
to explain matters fully and present their side. Thus, it justified its disposition in this
wise:[14]
x x x We do not see how the lack of compliance with the required procedure prejudiced
them in any way. Moreover, the other requirements of: publication in the Official Gazette,
personal notice by mailing, and posting at the site and other conspicuous places, were
complied with and these are sufficient to notify any party who is minded to make any
objection of the application for registration.
The Courts Ruling
We find for petitioner.
Newspaper Publication Mandatory
The pertinent part of Section 23 of Presidential Decree No. 1529 requiring
publication of the notice of initial hearing reads as follows:
Sec. 23. Notice of initial hearing, publication, etc. -- The court shall, within five days
from filing of the application, issue an order setting the date and hour of the initial
hearing which shall not be earlier than forty-five days nor later than ninety days from the
date of the order.
The public shall be given notice of initial hearing of the application for land registration
by means of (1) publication; (2) mailing; and (3) posting.
1. By publication. --
Upon receipt of the order of the court setting the time for initial hearing, the
Commissioner of Land Registration shall cause a notice of initial hearing to be published
once in the Official Gazette and once in a newspaper of general circulation in the
Philippines: Provided, however, that the publication in the Official Gazette shall be
sufficient to confer jurisdiction upon the court. Said notice shall be addressed to all
persons appearing to have an interest in the land involved including the adjoining owners
so far as known, and `to all whom it may concern.'  Said notice shall also require all
persons concerned to appear in court at a certain date and time to show cause why the
prayer of said application shall not be granted.
xxx xxx xxx
Admittedly, the above provision provides in clear and categorical terms that
publication in the Official Gazette suffices to confer jurisdiction upon the land registration
court. However, the question boils down to whether, absent any publication in a
newspaper of general circulation, the land registration court can validly confirm and
register the title of private respondents.
We answer this query in the negative. This answer is impelled by the demands of
statutory construction and the due process rationale behind the publication requirement.
The law used the term shall in prescribing the work to be done by the
Commissioner of Land Registration upon the latters receipt of the court order setting the
time for initial hearing.The said word denotes an imperative and thus indicates the
mandatory character of a statute. [15] While concededly such literal mandate is not an
absolute rule in statutory construction, as its import ultimately depends upon its context
in the entire provision, we hold that in the present case the term must be understood in
its normal mandatory meaning. In Republic vs. Marasigan,[16] the Court through Mr. Justice
Hilario G. Davide, Jr. held that Section 23 of PD 1529 requires notice of the initial hearing
by means of (1) publication, (2) mailing and (3) posting, all of which must be complied
with. If the intention of the law were otherwise, said section would not have stressed in
detail the requirements of mailing of notices to all persons named in the petition who, per
Section 15 of the Decree, include owners of adjoining properties, and occupants of the
land. Indeed, if mailing of notices is essential, then by parity of reasoning, publication in a
newspaper of general circulation is likewise imperative since the law included such
requirement in its detailed provision.
It should be noted further that land registration is a proceeding in rem.[17] Being in
rem, such proceeding requires constructive seizure of the land as against all persons,
including the state, who have rights to or interests in the property.  An in rem proceeding
is validated essentially through publication. This being so, the process must strictly be
complied with. Otherwise, persons who may be interested or whose rights may be
adversely affected would be barred from contesting an application which they had no
knowledge of. As has been ruled, a party as an owner seeking the inscription of realty in
the land registration court must prove by satisfactory and conclusive evidence not only
his ownership thereof but the identity of the same, for he is in the same situation as one
who institutes an action for recovery of realty. [18] He must prove his title against the
whole world. This task, which rests upon the applicant, can best be achieved when all
persons concerned -- nay, the whole world -- who have rights to or interests in the
subject property are notified and effectively invited to come to court and show cause why
the application should not be granted. The elementary norms of due process require that
before the claimed property is taken from concerned parties and registered in the name
of the applicant, said parties must be given notice and opportunity to oppose.
It may be asked why publication in a newspaper of general circulation should be
deemed mandatory when the law already requires notice by publication in the Official
Gazette as well as by mailing and posting, all of which have already been complied with in
the case at hand. The reason is due process and the reality that the Official Gazette is not
as widely read and circulated as newspapers and is oftentimes delayed in its circulation,
such that the notices published therein may not reach the interested parties on time, if at
all. Additionally, such parties may not be owners of neighboring properties, and may in
fact not own any other real estate. In sum, the all-encompassing in rem nature of land
registration cases, the consequences of default orders issued against the whole world and
the objective of disseminating the notice in as wide a manner as possible demand a
mandatory construction of the requirements for publication, mailing and posting.
Admittedly, there was failure to comply with the explicit publication requirement of
the law. Private respondents did not proffer any excuse; even if they had, it would not
have mattered because the statute itself allows no excuses. Ineludibly, this Court has no
authority to dispense with such mandatory requirement. The law is unambiguous and its
rationale clear. Time and again, this Court has declared that where the law speaks in clear
and categorical language, there is no room for interpretation, vacillation or equivocation;
there is room only for application.[19] There is no alternative. Thus, the application for
land registration filed by private respondents must be dismissed without prejudice to
reapplication in the future, after all the legal requisites shall have been duly complied
with.
WHEREFORE, the petition is GRANTED and the assailed Decision and Resolution
are REVERSED  and SET ASIDE. The application of private respondent for land registration
is DISMISSED  without prejudice. No costs.
SO ORDERED.

G.R. No. 73039 October 9, 1987
PERFECTA CAVILI, PRIMITIVO CAVILI and QUIRINO CAVILI, petitioners, 
vs.
HON. TEODORO N. FLORENDO, Presiding Judge, Branch XXXVI, Regional Trial Court
of Negros Oriental, 7th Judicial Region, CLARITA CAVILI, ULPIANO CAVILI,
ESTRELLA CAVILI, PLACIDA CAVILI, ET AL., respondents.
No. L-68680 October 9, 1987
PERFECTA CAVILI, PRIMITIVO CAVILI and QUIRINO CAVILI, petitioners, 
vs.
HON. TEODORO N. FLORENDO, Presiding Judge, Branch XXXVI, Regional Trial Court,
7th Judicial Region, CLARITA CAVILI, ULPIANO CAVILI, ESTRELLA CAVILI, PLACIDA
CAVILI, GREGORIA CAVILI, FORTUNATA CAVILI, AMILITA CAVILI, APAD CAVILI,
AQUILINA CAVILI, CRESENCIO CAVILI, ALMA CAVILI, ET AL., respondents.
No. L-57771 October 9, 1987
QUIRINO CAVILI, PRIMITIVO, CAVILI, and PERFECTA CAVILI, petitioners,  have already been the subject of a written partition agreement between the direct heirs
vs.
HON. CIPRIANO VAMENTA, JR., as Presiding Judge, Branch III Court of First Instance
of Negros Oriental; ULPIANO CAVILI, CLARITA CAVILI, ESTRELLA CAVILI, RAMONA
TAKANG COSME TAKANG FABIAN TAKANG, LEODEGARIO TAKANG ET
AL., respondents.
GUTIERREZ, JR., J.:
This is a petition to review and set aside two orders of the then Court of First Instance of
Negros Oriental, namely: (1) the order dated October 11, 1985, disqualifying Perfects
Cavili dela Cruz as a witness in Civil Case No. 6880 entitled "Clarita Cavili, et al. v. Perfecta
Cavili, Quirino Cavili, and Primitivo Cavili" and (2) the order dated November 26, 1985,
refusing to reconsider the previous orders of disqualification and resetting the reception
of evidence for the defendants to December 19 and 20, 1985 with a warning that should
defendants' witnesses fail to appear in court on said date, they will be deemed to have
waived their right to be witnesses in this case.
The private respondents filed Civil Case No. 6880 with the Court of First Instance of
Negros Oriental against herein petitioners for Partition, Accounting, and Damages. After
the case was raffled to Branch I presided over by Judge Augusto S. Villarin, summons was
issued to the three petitioners, all at Bayawan Negros Oriental which was the address
indicated in the complaint.
After trying to effect service, the process server went back to the court with the following
return of service to Quirino and Primitivo Cavili not contacted, according to Perfecta
Cavili, subject persons is (sic) staying in Kabangkalan, Negros Occidental."
Meanwhile, Atty. Jose P. Alamino filed a motion for extension to answer in behalf of the
defendants, manifesting the representation of his client Perfecta Cavili that she will
inform her brothers Primitivo and Quirino about the case.
The defendants, however, failed to file their answer within the request period and upon
motion of the plaintiffs, the defendants were declared in default, and on October 5, 1979,
a judgment by default was promulgated by Judge Augusto S. Villarin.
The records of the case, however, show that a Manifestation was filed by Atty. Jose P.
Alamino informing the court that since he never met Primitivo and Quirino Cavili, who
are residents of another province, he desisted from further appearing in the case in their
behalf.
On November 7, 1979, Atty. Jose P. Alamillo received a copy of the decision. On December
7, 1979, he filed a motion for new trial in behalf of the defendants on grounds of lack of
jurisdiction and, with a meritorious defense that the properties sought to be partitioned
of the late Bernardo Cavili who are the predecessors of the parties in this case. In/an
order dated April 23, 1980, the court granted said motion.
The plaintiffs filed a motion for reconsideration of the order granting new trial and at the
same time prayed that a writ of execution be issued but only in so far as defendant
Perfecta Cavili was concerned.
In an order dated July 21, 1981, Judge Cipriano Vamenta of Branch III of the Court of First
Instance of Negros Oriental to whom the case had been assigned after a re-raffle, set aside
the order of April 23, 1980 and directed the execution of the October 5, 1979 decision
without qualification ruling that the petitioners' remedy should have been appeal rather
than new trial.
Their motion for reconsideration having been denied on August 11, 1981, the defendants,
now petitioners, brought the case to this Court through a petition for certiorari, G.R. No.
57771, entitled "Quirino Cavili, et al., Petitioners vs. Hon. Cipriano Vamenta, et al.,
Respondents "
On May 31, 1982, this Court rendered a decision, the dispositive portion of which reads:
 WHEREFORE, Our resolution dismissing the petition is hereby
reconsidered; the petition is granted; and the order dated July 21,
1981, is set aside while that of April 23, 1980, is revived. (No special
pronouncement as to costs. Rollo p. 21)
Thereafter, the pre-trial and trial of Civil Case No. 6880 was scheduled on October 9, 10,
and 11, 1985 before Branch XXXVI of the Regional Trial Court, presided by respondent
Judge Teodoro N. Florendo. The defendants, (now petitioners), presented Perfects Cavili
dela Cruz as their first witness. The respondents, through counsel moved for her
disqualification as a witness on the ground that having been declared in default, Perfects
Cavili has lost her standing in court and she cannot be allowed to participate in all
premise the even as a witness. The court, through the respondent judge, sustained the
respondents' contention and disqualified her from testifying.
The petitioners, through counsel, moved for a reconsideration of the ruling.
On November 26, 1985, the lower court issued an order denying reconsideration of its
Order dated October 11, 1985 disqualifying Perfecta Cavili dela Cruz as a witness in Civil
Case No. 6880.
Hence, this petition.
Petitioner Perfecta Cavili's competence as a witness is put in issue by the private
respondents.
Section 18, Rule 130 of the Revised Rules of Court states who are qualified to be
witnesses. It provides:
Section 18. Witnesses; their qualifications. — Except as provided in the next succeeding
section, all persons who, having organs of sense, can perceive, and perceiving, can make
known their perception to others, may be witnesses. Neither parties nor other persons
interested in the outcome of a case shall be excluded; nor those who have been convicted
of crime; nor any person on account of his opinion on matters of religious belief.
The generosity with which the Rule allows people to testify is apparent. Interest in the
outcome of a case, conviction of a crime unless otherwise provided by law, and religious
belief are not grounds for disqualification.
Sections 19 and 20 of Rule 130 provide for specific disqualifications. Section 19
disqualifies those who are mentally incapacitated and children whose tender age or
immaturity renders them incapable of being witnesses. Section 20 provides for
disqualification based on conflicts of interest or on relationship. Section 21 provides for
disqualifications based on privileged communications. Section 15 of Rule 132 may not be
a rule on disqualification of witnesses but it states the grounds when a witness may be
impeached by the party against whom he was called.
There is no provision of the Rules disqualifying parties declared in default from taking
the witness stand for non-disqualified parties. The law does not provide default as an
exception. The specific enumeration of disqualified witnesses excludes the operation of
causes of disability other than those mentioned in the Rules. It is a maxim of recognized
utility and merit in the construction of statutes that an express exception, exemption, or
saving clause excludes other exceptions. (In Re Estate of Enriquez, 29 Phil. 167) As a
general rule, where there are express exceptions these comprise the only limitations on
the operation of a statute and no other exception will be implied. (Sutherland on
Statutory Construction, Fourth Edition, Vol. 2A, p. 90) The Rules should not be
interpreted to include an exception not embodied therein.
The respondents, however, cite Section 2, Rule 18 on Defaults, to wit:
Section 2. Effect of order of default. — Except as provided in section 9 of Rule 13, a party
declared in default shall not be entitled to notice of subsequent proceedings nor to take
part in the trial.
They advance the argument that to allow Perfecta Cavili to stand as witness would be to
permit a party in default "to take part in the trial."
An explanation of the Rule is in order.
Loss of standing in court is the consequence of an order of default. Thus, a party declared
in default is considered out of court and cannot appear therein, adduce evidence, and be
heard and for that reason he is not entitled to notice. (Rule 18, Rules of Court; Lim Toco v.
Go Fay, 80 Phil. 166) However, "loss of pending" must be understood to mean only the
forfeiture of one's rights as a party litigant, contestant or legal adversary. A party in
default loses his right to present his defense, control the proceedings, and examine or
cross-examine witnesses. He has no right to expect that his pleadings would be acted
upon by the court nor may he object to or refute evidence or motions filed against him.
There is nothing in the rule, however, which contemplates a disqualification to be a
witness or a opponent in a case. Default does not make him an incompetent.
As opposed to a party litigant, a witness is merely a beholder, a spectator or onlooker,
called upon to testify to what he has seen, heard, or observed. As such, he takes no active
part in the contest of rights between the parties. Cast in the cited role of witness, a party
in default cannot be considered as " a part in the trial." He remains suffering the effects of
an order of default.
A party in default may thus be cited as a witness by his co-defendants who have the
standing and the right to present evidence which the former may provide. The incidental
benefit giving the party in default the opportunity to present evidence which may
eventually redound to his advantage or bring about a desired result, through his co-
defendants, is of minor consequence.
Of greater concern or importance in allowing the presence of Perfecta Cavili as a witness
in the case at bar, is the preservation of the right of petitioners Quirino and Primitivo
Cavili to secure the attendance of witnesses and the production of evidence in their
behalf. To reject Perfects Cavili's presentation of testimonial evidence would be to treat
Primitivo and Quirino, as if they too were in default. There is no reason why the latter
should also be made to bear the consequences of Perfecta's omission. Moreover, we
cannot deprive Quirino and Primitivo of the only instrument of proof available to them, as
Perfecta alone has been in possession and administration of the claim.
WHEREFORE, in view of the foregoing, the petition is hereby GRANTED. The order of the
respondent court disqualifying. Perfects Cavili dela Cruz as a witness in Civil Case No.
6880 is hereby SET ASIDE. The case is remanded to the court a quo for Wither
proceedings. The temporary restraining order issued on January 6, 1986 is LIFTED.
SO ORDERED
G.R. No. L-53880 March 17, 1994
ENRICO L. PACETE, CLARITA DE LA CONCEPCION, EMELDA C. PACETE, EVELINA C.
PACETE and EDUARDO C. PACETE, petitioners,  expired."1
vs.
HON. GLICERIO V. CARRIAGA, JR. and CONCEPCION (CONCHITA) ALANIS
PACETE, respondents.
Juan G. Sibug and Rodolfo B. Quiachon for petitioners.
Julio F. Andres, Jr. for private respondent.
VITUG, J.:
The issue in this petition for certiorari is whether or not the Court of First Instance (now
Regional Trial Court) of Cotabato, Branch I, in Cotabato City, gravely abused its discretion
in denying petitioners' motion for extension of time to file their answer in Civil Case No.
2518, in declaring petitioners in default and in rendering  its decision of 17 March 1980
which, among other things, decreed the legal separation of petitioner Enrico L. Pacete and
private respondent Concepcion Alanis and held to be null and void ab initio the marriage
of Enrico L. Pacete to Clarita de la Concepcion.
On 29 October 1979, Concepcion Alanis filed with the court below a complaint for the
declaration of nullity of the marriage between her erstwhile husband Enrico L. Pacete and
one Clarita de la Concepcion, as well as for legal separation (between Alanis and Pacete),
accounting and separation of property. In her complaint, she averred that she was
married to Pacete on 30 April 1938 before the Justice of the Peace of Cotabato, Cotabato;
that they had a child named Consuelo who was born on 11 March 1943; that Pacete
subsequently contracted (in 1948) a second marriage with Clarita de la Concepcion in
Kidapawan, North Cotabato; that she learned of such marriage only on 01 August 1979;
that during her marriage to Pacete, the latter acquired vast property consisting of large
tracts of land, fishponds and several motor vehicles; that he fraudulently placed the
several pieces of property either in his name and Clarita or in the names of his children
with Clarita and other "dummies;" that Pacete ignored overtures for an amicable
settlement; and that reconciliation between her and Pacete was impossible since he
evidently preferred to continue living with Clarita.
The defendants were each served with summons on 15 November 1979. They filed a
motion for an extension of twenty (20) days from 30 November 1979 within which to file
an answer. The court granted the motion. On 18 December 1979, appearing through a
new counsel, the defendants filed a second motion for an extension of another thirty (30)
days from 20 December 1979. On 07 January 1980, the lower court granted the motion
but only for twenty (20) days to be counted from 20 December 1979 or until 09 January
1980. The Order of the court was mailed to defendants' counsel on 11 January 1980.
Likely still unaware of the court order, the defendants, on 05 February 1980, again filed
another motion (dated 18 January 1980) for an extension of "fifteen (15) days counted
from the expiration of the 30-day period previously sought" within which to file an
answer. The following day, or on 06 February 1980, the court denied this last motion on
the ground that it was "filed after the original period given . . . as first extension had
The plaintiff thereupon filed a motion to declare the defendants in default, which the
court forthwith granted. The plaintiff was then directed to present her evidence. 2 The
court received plaintiff's evidence during the hearings held on 15, 20, 21 and 22 February
1980.
On 17 March 1980, the court3 promulgated the herein questioned decision, disposing of
the case, thus —
WHEREFORE, order is hereby issued ordering:
1. The issuance of a Decree of Legal Separation of the marriage
between, the plaintiff, Concepcion (Conchita) Alanis Pacete and the
herein defendants, Enrico L. Pacete, in accordance with the Philippine
laws and with consequences, as provided for by our laws;
2. That the following properties are hereby declared as the conjugal
properties of the partnership of the plaintiff, Concepcion (Conchita)
Alanis Pacete and the defendant, Enrico L. Pacete, half and half, to wit:
1. The parcel of land covered by TCT No. V-815 which is a parcel of
land situated in the barrio of Langcong, Municipality of Matanog
(previously of Parang), province of Maguindanao (previously of
Cotabato province) with an area of 45,265 square meters registered in
the name of Enrico Pacete, Filipino, of legal age, married to Conchita
Alanis as shown in Exhibits "B" and "B-1" for the plaintiff.
2. A parcel of land covered by Transfer Certificate of Title No. T-20442,
with an area of 538 square meters and covered by Tax Declaration No.
2650 (74) in the name of Enrico Pacete, situated in the Poblacion of
Kidapawan, North Cotabato, together with all its improvements, which
parcel of land, as shown by Exhibits "K-1" was acquired by way of
absolute deed of sale executed by Amrosio Mondog on January 14,
1965.
3. A parcel of land covered by Transfer Certificate of Title No. T-20424
and covered by Tax Declaration No. 803 (74), with an area of 5.1670
hectares, more or less, as shown by Exhibit "R", the same was
registered in the name of Enrico Pacete and the same was acquired by
Enrico Pacete last February 17, 1967 from Ambag Ampoy, as shown by
Exhibit "R-1", situated at Musan, Kidapawan, North Cotabato.
4. A parcel of land situated at Lanao, Kidapawan, North Cotabato, with
an area of 5.0567 hectares, covered by Tax Declaration No. 4332 (74),
as shown by Exhibit "S", and registered in the name of Enrico Pacete.
5. A parcel of land covered by Transfer Certificate of Title No. T-9750,
situated at Lika, Mlang, North Cotabato, with an area of 4.9841
hectares and the same is covered by Tax Declaration No. 803 (74) and
registered in the name of Enrico Pacete and which land was acquired
by Enrico Pacete from Salvador Pacete on September 24, 1962, as
shown by Exhibit "Q-1".
6. A parcel of land covered by Transfer Certificate of Title No. T-9944,
with an area of 9.9566 and also covered by Tax Declaration No. 8608
(74) and registered in the name of the defendant Enrico L. Pacete
which Enrico L. Pacete acquired from Sancho Balingcos last October
22, 1962, as shown by Exhibit "L-1" and which parcel of land is
situated at (Kialab), Kiab, Matalam, North Cotabato.
7. A parcel of land covered by Transfer Certificate of Title No. T-9227,
situated at Kiab, Matalam, North Cotabato, with an area of 12.04339
hectares, more or less, and also covered by Tax Declaration No. 8607
(74) both in the name of the defendant Enrico L. Pacete which he
acquired last October 15, 1962 from Minda Bernardino, as shown by
Exhibit "M-1".
8. A parcel of land covered by Transfer Certificate of Title No. T-9228,
situated at Kiab, Matalam, North Cotabato, with an area of 10.8908
hectares, registered in the name of Enrico Pacete and also covered by
Tax Declaration No. 5781 (74) in the name of Enrico Pacete and which
parcel of land he acquired last September 25, 1962 from Conchita dela
Torre, as shown by Exhibit "P-1".
9. A parcel of land covered by Transfer Certificate of Title No. T-10301,
situated at Linao, Matalam, North Cotabato, with an area of 7.2547
hectares, registered in the name of Enrico Pacete and also covered by
Tax Declaration No. 8716 (74) also in the name of Enrico Pacete which
Enrico Pacete acquired from Agustin Bijo last July 16, 1963, as shown
by Exhibit "N-1".
10. A parcel of land covered by Transfer Certificate of Title No. 12728
in the name of the defendant, Enrico L. Pacete, with an area of 10.9006
hectares, situated at Linao, Matalam, North Cotabato and is also
covered by Tax Declaration No. 5745 (74) in the name of Enrico
Pacete, as shown on Exhibit "O" and which Enrico Pacete acquired last
December 31, 1963 from Eliseo Pugni, as shown on Exhibit "0-1".
3. Ordering the Cancellation of Original Certificate of Title No. P-34243
covering Lot No. 1066, issued in the name of Evelina Pacete, situated at
Kiab, Matalam, North Cotabato, and ordering the registration of the
same in the joint name of Concepcion (Conchita) Alanis Pacete and
Enrico L. Pacete as their conjugal property, with address on the part of
Concepcion (Conchita) Alanis Pacete at Parang, Maguindanao and on
the part of Enrico L. Pacete at Kidapawan, North Cotabato.
4. Ordering likewise the cancellation of Original Certificate of Title No.
V-20101, covering Lot No. 77, in the name of Eduardo C. Pacete,
situated at New Lawaan, Mlang, North Cotabato, and the issuance of a
new Transfer Certificate of Title in the joint name of (half and half)
Concepcion (Conchita) Alanis Pacete and Enrico L. Pacete.
5. Ordering likewise the cancellation of Original Certificate of Title No.
P-29890, covering Lot 1068, situated at Kiab, Matalam, North
Cotabato, with an area of 12.1031 hectares, in the name of Emelda C.
Pacete and the issuance of a new Transfer Certificate of Title in the
joint name (half and half) of Concepcion (Conchita) Alanis Pacete and
Enrico L. Pacete; and declaring that the fishpond situated at Barrio
Tumanan, Bislig, Surigao Del Sur, with an area of 48 hectares and
covered by Fishpond Lease Agreement of Emelda C. Pacete, dated July
29, 1977 be cancelled and in lieu thereof, the joint name of Concepcion
(Conchita) Alanis Pacete and her husband, Enrico L. Pacete, be
registered as their joint property, including the 50 hectares fishpond
situated in the same place, Barrio Timanan, Bislig, Surigao del Sur.
 6. Ordering the following motor vehicles to be the joint properties of
the conjugal partnership of Concepcion (Conchita) Alanis Pacete and
Enrico L. Pacete, viz:
a. Motor vehicle with Plate No. T-RG-783; Make, Dodge; Motor No.
T137-20561; Chassis No. 83920393, and Type, Mcarrier;
b. Motor vehicle with Plate No. T-RG-784; Make, Dodge; Motor No.
T214-229547; Chassis No. 10D-1302-C; and Type, Mcarrier;
c. Motor vehicle with Plate No. J-PR-818; Make, Ford; Motor No. GRW-
116188; Chassis No. HOCC-GPW-1161-88-C; Type, Jeep;
d. Motor vehicle with Plate No. TH-5J-583; Make, Ford: Motor No.
F70MU5-11111; Chassis No. HOCC-GPW-1161188-G; Type, Stake;
e. Motor vehicle with Plate No. TH-5J-584; Make, Hino; Motor No.
ED300-45758; Chassis No. KB222-22044; Type, Stake; and
f. Motor vehicle with Plate No. TH-5J-585; Make, Ford: Motor No. LTC-
780-Dv; Chassis No. 10F-13582-K; Type, Stake.
7. Ordering the defendant Enrico L. Pacete to pay the plaintiff the sum
of P46,950.00 which is the share of the plaintiff in the unaccounted
income of the ricemill and corn sheller for three years from 1971 to
1973.
8. Ordering the defendant, Enrico L. Pacete, to reimburse the plaintiff
the monetary equipment of 30% of whether the plaintiff has recovered
as attorney's fees;
9. Declaring the subsequent marriage between defendant Enrico L.
Pacete and Clarita de la Concepcion to be void ab initio; and
10. Ordering the defendants to pay the costs of this suit. 4
Hence, the instant special civil action of certiorari.
Under ordinary circumstances, the petition would have outrightly been dismissed, for, as
also pointed out by private respondents, the proper remedy of petitioners should have
instead been either to appeal from the judgment by default or to file a petition for relief
from judgment.5 This rule, however, is not inflexible; a petition for certiorari  is allowed
when the default order is improperly  declared, or even when it is properly declared,
where grave abuse of discretion attended such declaration. 6 In these exceptional
instances, the special civil action of certiorari  to declare the nullity of a judgment by
default is available.7 In the case at bench, the default order unquestionably is not legally
sanctioned. The Civil Code provides:
Art. 101. No decree of legal separation shall be promulgated upon a
stipulation of facts or by confession of judgment.
In case of non-appearance of the defendant, the court shall order the
prosecuting attorney to inquire whether or not a collusion between
the parties exists. If there is no collusion, the prosecuting attorney
shall intervene for the State in order to take care that the evidence for
the plaintiff is not fabricated.
The provision has been taken from Article 30 of the California Civil Code, 8 and it is, in
substance, reproduced in Article 60 of the Family Code. 9
Article 101 reflects the public policy on marriages, and it should easily explain the
mandatory tenor of the law. In Brown v. Yambao, 10 the Court has observed:
The policy of Article 101 of the new Civil Code, calling for the
intervention of the state attorneys in case of uncontested proceedings
for legal separation (and of annulment of marriages, under Article 88),
is to emphasize that marriage is more than a mere contract; that it is a
social institution in which the state is vitally interested, so that its
continuation or interruption can not be made to depend upon the
parties themselves (Civil Code, Article 52; Adong vs. Cheong Gee, 43
Phil. 43; Ramirez v. Gmur, 42 Phil. 855; Goitia v. Campos, 35 Phil. 252).
It is consonant with this policy that the inquiry by the Fiscal should be
allowed to focus upon any relevant matter that may indicate whether
the proceedings for separation or annulment are fully justified or not.
Article 103 of the Civil Code, now Article 58 of the Family Code, further mandates that an
action for legal separation must "in no case be tried before six months shall have elapsed
since the filing of the petition," obviously in order to provide the parties a "cooling-off"
period. In this interim, the court should take steps toward getting the parties to reconcile.
The significance of the above substantive provisions of the law is further underscored by
the inclusion of the following provision in Rule 18 of the Rules of Court:
Sec. 6. No defaults in actions for annulments of marriage or for legal
separation. — If the defendant in an action for annulment of marriage
or for legal separation fails to answer, the court shall order the
prosecuting attorney to investigate whether or not a collusion
between the parties exists, and if there is no collusion, to intervene for
the State in order to see to it that the evidence submitted is not
fabricated.
The special prescriptions on actions that can put the integrity of marriage to possible
jeopardy are impelled by no less than the State's interest in the marriage relation and its
avowed intention not to leave the matter within the exclusive domain and the vagaries of
the parties to alone dictate.

It is clear that the petitioner did, in fact, specifically pray for legal separation. 11 That other
remedies, whether principal or incidental, have likewise been sought in the same action
cannot dispense, nor excuse compliance, with any of the statutory requirements
aforequoted.

WHEREFORE, the petition for certiorari  is hereby GRANTED and the proceedings below,
including the Decision of 17 March 1980 appealed from, are NULLIFIED and SET ASIDE.
No costs.

SO ORDERED.

(ramnani case)

G.R. No. 75919 May 7, 1987
MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners, 
vs.
COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, STEPHEN ROXAS,
ANDREW LUISON, GRACE LUISON and JOSE DE MAISIP, respondents.
Tanjuatco, Oreta and Tanjuatco for petitioners.
Pecabar Law Offices for private respondents.
RESOLUTION
GANCAYCO, J.:
Acting on the motion for reconsideration of the resolution of the Second Division of
January 28,1987 and another motion to refer the case to and to be heard in oral argument
by the Court En Banc filed by petitioners, the motion to refer the case to the Court en
banc is granted but the motion to set the case for oral argument is denied.
Petitioners in support of their contention that the filing fee must be assessed on the basis
of the amended complaint cite the case of Magaspi vs. Ramolete. 1 They contend that the
Court of Appeals erred in that the filing fee should be levied by considering the amount of
damages sought in the original complaint.
The environmental facts of said case differ from the present in that —
1. The Magaspi case was an action for recovery of ownership and possession of a parcel of
land with damages.2While the present case is an action for torts and damages and specific
performance with prayer for temporary restraining order, etc. 3
2. In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of
the defendant to the property, the declaration of ownership and delivery of possession
thereof to plaintiffs but also asks for the payment of actual moral, exemplary damages
and attorney's fees arising therefrom in the amounts specified therein. 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
In the present case no such honest difference of opinion was possible as the allegations of
the complaint, the designation and the prayer show clearly that it is an action for
damages and specific performance. The docketing fee should be assessed by considering
the amount of damages as alleged in the original complaint.
To put a stop to this irregularity, henceforth all complaints, petitions, answers and other
similar pleadings should specify the amount of damages being prayed for not only in the
body of the pleading but also in the prayer, and said damages shall be considered in the
assessment of the filing fees in any case. Any pleading that fails to comply with this
requirement shall not bib accepted nor admitted, or shall otherwise be expunged from
the record.
The Court acquires jurisdiction over any case only upon the payment of the prescribed
docket fee. An amendment of the complaint or similar pleading will not thereby vest
jurisdiction in the Court, much less the payment of the docket fee based on the amounts
sought in the amended pleading. The ruling in the Magaspi case 14 in so far as it is
inconsistent with this pronouncement is overturned and reversed.
WHEREFORE, the motion for reconsideration is denied for lack of merit.

As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only SO ORDERED.
upon payment of the docket fee regardless of the actual date of filing in court .  12 Thus, in
the present case the trial court did not acquire jurisdiction over the case by the payment
of only P410.00 as docket fee. Neither can the amendment of the complaint thereby vest
jurisdiction upon the Court. 13 For an legal purposes there is no such original complaint
that was duly filed which could be amended. Consequently, the order admitting the
amended complaint and all subsequent proceedings and actions taken by the trial court
are null and void.

The Court of Appeals therefore, aptly ruled in the present case that the basis of
assessment of the docket fee should be the amount of damages sought in the original
complaint and not in the amended complaint.

The Court cannot close this case without making the observation that it frowns at the
practice of counsel who filed the original complaint in this case of omitting any
specification of the amount of damages in the prayer although the amount of over P78
million is alleged in the body of the complaint. This is clearly intended for no other
purpose than to evade the payment of the correct filing fees if not to mislead the docket
clerk in the assessment of the filing fee. This fraudulent practice was compounded when,
even as this Court had taken cognizance of the anomaly and ordered an investigation,
petitioner through another counsel filed an amended complaint, deleting all mention of
the amount of damages being asked for in the body of the complaint. It was only when in
obedience to the order of this Court of October 18, 1985, the trial court directed that the
amount of damages be specified in the amended complaint, that petitioners' counsel
wrote the damages sought in the much reduced amount of P10,000,000.00 in the body of
the complaint but not in the prayer thereof. The design to avoid payment of the required
docket fee is obvious.

The Court serves warning that it will take drastic action upon a repetition of this
unethical practice.

G.R. Nos. 79937-38 February 13, 1989
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners,  On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court,
Quezon City and MANUEL CHUA UY PO TIONG, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners.
Tanjuatco, Oreta, Tanjuatco, Berenguer & Sanvicente Law Offices for private respondent.
GANCAYCO, J.:
Again the Court is asked to resolve the issue of whether or not a court acquires
jurisdiction over a case when the correct and proper docket fee has not been paid.
On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a
complaint with the Regional Trial Court of Makati, Metro Manila for the consignation of a
premium refund on a fire insurance policy with a prayer for the judicial declaration of its
nullity against private respondent Manuel Uy Po Tiong. Private respondent as declared in
default for failure to file the required answer within the reglementary period.
On the other hand, on March 28, 1984, private respondent filed a complaint in the
Regional Trial Court of Quezon City for the refund of premiums and the issuance of a writ
of preliminary attachment which was docketed as Civil Case No. Q-41177, initially against
petitioner SIOL, and thereafter including E.B. Philipps and D.J. Warby as additional
defendants. The complaint sought, among others, the payment of actual, compensatory,
moral, exemplary and liquidated damages, attorney's fees, expenses of litigation and costs
of the suit. Although the prayer in the complaint did not quantify the amount of damages
sought said amount may be inferred from the body of the complaint to be about Fifty
Million Pesos (P50,000,000.00).
Only the amount of P210.00 was paid by private respondent as docket fee which
prompted petitioners' counsel to raise his objection. Said objection was disregarded by
respondent Judge Jose P. Castro who was then presiding over said case. Upon the order of
this Court, the records of said case together with twenty-two other cases assigned to
different branches of the Regional Trial Court of Quezon City which were under
investigation for under-assessment of docket fees were transmitted to this Court. The
Court thereafter returned the said records to the trial court with the directive that they
be re-raffled to the other judges in Quezon City, to the exclusion of Judge Castro. Civil
Case No. Q-41177 was re-raffled to Branch 104, a sala which was then vacant.
On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No.
85-10-8752-RTC directing the judges in said cases to reassess the docket fees and that in
case of deficiency, to order its payment. The Resolution also requires all clerks of court to
issue certificates of re-assessment of docket fees. All litigants were likewise required to
specify in their pleadings the amount sought to be recovered in their complaints.
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.
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.

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
 The complaints 3 all alleged the same essential facts (1) Pineda was the owner of a parcel
of land measuring 790 square meters, his ownership being evidenced by TCT No. T-
46560; (2) the previous owner had allowed the defendants to occupy portions of the land
by mere tolerance; (3) having himself need to use the property, Pineda had made
demands on the defendants to vacate the property and pay reasonable rentals therefor,
but these demands had been refused; and (4) the last demand had been made more than
a year prior to the commencement of suit. The complaints prayed for the same reliefs, to
wit:

1) that plaintiff be declared owner of the areas occupied by the

defendants;

2) that defendants and their "privies and allies" be ordered to vacate

and deliver the portions of the land usurped by them;
G.R. Nos. 88075-77 December 20, 1989
3) that each defendant be ordered to pay:
MAXIMO TACAY, PONCIANO PANES and ANTONIA NOEL, petitioners, 
vs. 1 ) P 2,000 as monthly rents from February, 1987;
REGIONAL TRIAL COURT OF TAGUM Davao del Norte, Branches 1 and 2, Presided
by Hon. Marcial Fernandez and Hon. Jesus Matas, respectively, PATSITA GAMUTAN,
2 ) Actual damages, as proven;
Clerk of Court, and GODOFREDO PINEDA, respondents.

3 ) Moral and nominal damages as the Honorable Court may fix ;

Eduardo C. De Vera for petitioners.

4) P30,000.00, "as attorney's fees, and representation fees of

RESOLUTION
P5,000.00 per day of appearance;" 4

 
and

NARVASA, J.:
In the Regional Trial Court at Tagum, Davao del Norte, 1 three
(3) actions for recovery of possession (acciones publicianas 2 ) were separately instituted
by Godofredo Pineda against three (3) defendants, docketed as follows:
1) vs. Antonia Noel Civil Case No. 2209
2) vs. Ponciano Panes Civil Case No. 2210
4) that he (Pineda) be granted such "further relief and remedies ... just
and equitable in the premises.
The prayer of each complaint contained a handwritten notation (evidently made by
plaintiff's counsel) reading, "P5,000.00 as and for," immediately above the typewritten
words, "Actual damages, as proven," the intention apparently being to make the entire
phrase read, " P5,000.00 as and for actual damages as proven. 5
Motions to dismiss were filed in behalf of each of the defendants by common counsel .
6
 Every motion alleged that the Trial Court had not acquired jurisdiction of the case —

3) vs. Maximo Tacay Civil Case No. 2211. . . . for the reason that the ... complaint violates the mandatory and
clear provision of Circular No. 7 of the ... Supreme Court dated March
24,1988, by failing to specify all the amounts of damages which
Civil Cases Numbered 2209 and 2211 were raffled to Branch I of the Trial Court, presided
plaintiff is claiming from defendant;" and
over by Judge Marcial Hernandez. Civil No. 2210 was assigned to Branch 2, presided over
by Judge Jesus Matas.
 . . . for ... failure (of the complaint) to even allege the basic requirement
as to the assessed value of the subject lot in dispute.
Judge Matas denied the motion to dismiss filed in Civil Case No. 2210 but ordered the
expunction of the "allegations in paragraph 11 of the ... complaint regarding moral as well
as nominal damages . 7 On motion of defendant Panes, Judge Matas later ordered the
striking out, too, of the "handwritten amount of 'P5,000. 00 as and for.' including the
typewritten words 'actual damages as proven' ... in sub-paragraph b of paragraph 4 in the
conclusion and prayer of the complaint ..." 8
The motions to dismiss submitted in Civil Cases Numbered 2211 and 2209 were also
denied in separate orders promulgated by Judge Marcial Fernandez. 9 His Order in Case
No. 2209 dated March 15, 1989 (a) declared that since the "action at bar is for
Reivindicatoria, Damages and Attorney's fees ... (d)efinitely this Court has the exclusive
jurisdiction," (b) that the claims for actual, moral and nominal damages "are only one
aspect of the cause of action," and (c) because of absence of specification of the amounts
claimed as moral, nominal and actual damages, they should be "expunged from the
records."
Ascribing grave abuse of discretion to both Judges Matas and Fernandez in the rendition
of the Orders above described, the defendants in all three (3) actions have filed with this
Court a "Joint Petition" for certiorari, prohibition and mandamus, with prayer for
temporary restraining order and/or writ of preliminary prohibitory injunction," praying
essentially that said orders be annulled and respondent judges directed to dismiss all the
complaints "without prejudice to private respondent Pineda's re-filing a similar
complaint that complies with Circular No. 7." The joint petition (a) re-asserted the
proposition that because the complaints had failed to state the amounts being claimed as
actual, moral and nominal damages, the Trial Courts a quo had not acquired jurisdiction
over the three (3) actions in question-indeed, the respondent Clerk of Court should not
have accepted the complaints which initiated said suits, and (b) it was not proper merely
to expunge the claims for damages and allow "the so-called cause of action for
"reivindicatoria" remain for trial" by itself. 10
The joint petition should be, as it is hereby, dismissed.
It should be dismissed for failure to comply with this Court's Circular No. 1-88 (effective
January 1, 1989). The copies of the challenged Orders thereto attached 11 were not
certified by the proper Clerk of Court or his duly authorized representative. Certification
was made by the petitioners' counsel, which is not allowed.
The petition should be dismissed, too, for another equally important reason. It fails to
demonstrate any grave abuse of discretion on the part of the respondent Judges in
rendering the Orders complained of or, for that matter, the existence of any proper cause
for the issuance of the writ of mandamus. On the contrary, the orders appear to have
correctly applied the law to the admitted facts.
It is true that the complaints do not state the amounts being claimed as actual, moral and
nominal damages. It is also true, however, that the actions are not basically for the
recovery of sums of money. They are principally for recovery of possession of real
property, in the nature of an accion publiciana. Determinative of the court's jurisdiction
in this type of actions is the nature thereof, not the amount of the damages allegedly
arising from or connected with the issue of title or possession, and regardless of the value
of the property. Quite obviously, an action for recovery of possession of real property
(such as an accion plenaria de possesion) or the title thereof, 12 or for partition or
condemnation of, or the foreclosure of a mortgage on, said real property 13 - in other
words, a real action-may be commenced and prosecuted without an accompanying claim
for actual, moral, nominal or exemplary damages; and such an action would fall within
the exclusive, original jurisdiction of the Regional Trial Court.
Batas Pambansa Bilang 129 provides that Regional Trial Courts shall exercise exclusive
original jurisdiction inter alia over "all civil actions which involve the title to, or
possession of, real property, or any interest therein, except actions for forcible entry into
and unlawful detainer of lands or buildings, original jurisdiction over which is conferred
upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts." 14 The rule applies regardless of the value of the real property involved, whether
it be worth more than P20,000.00 or not, infra. The rule also applies even where the
complaint involving realty also prays for an award of damages; the amount of those
damages would be immaterial to the question of the Court's jurisdiction. The rule is
unlike that in other cases e.g., actions simply for recovery of money or of personal
property, 15 or actions in admiralty and maritime jurisdiction 16 in which the amount
claimed, 17 or the value of the personal property, is determinative of jurisdiction; i.e., the
value of the personal property or the amount claimed should exceed twenty thousand
pesos (P20,000.00) in order to be cognizable by the Regional Trial Court.
Circular No. 7 of this Court, dated March 24, 1988, cannot thus be invoked, as the
petitioner does, as authority for the dismissal of the actions at bar. That circular,
avowedly inspired by the doctrine laid down in Manchester Development Corporation v.
Court of appeals, 149 SCRA 562 (May 7, 1987), has but limited application to said actions,
as shall presently be discussed. Moreover, the rules therein laid down have since been
clarified and amplified by the Court's subsequent decision in Sun Insurance Office, Ltd.
(SIOL) v. Asuncion, et al., G.R. Nos. 79937-38, February 13, 1989.
Circular No. 7 was aimed at the practice of certain parties who omit from the prayer of
their complaints "any specification of the amount of damages," the omission being
"clearly intended for no other purposes than to evade the payment of the correct filing
fees if not to mislead the docket clerk, in the assessment of the filing fee." The following
rules were therefore set down:
1. All complaints, petitions, answers, and similar pleadings should specify the amount of
damages being prayed for not only in the body of the pleading but also in the prayer, and
said damages shall be considered in the assessment of the filing fees in any case.
2. Any pleading that fails to comply with this requirement shall not be accepted nor
admitted, or shall otherwise be expunged from the record.
3. The Court acquires jurisdiction over any case only upon the payment of the prescribed
docket fee. An amendment of the complaint or similar pleading will not thereby vest
jurisdiction in the Court, much less the payment of the docket fee based on the amount
sought in the amended pleading.
The clarificatory and additional rules laid down in Sun Insurance Office, Ltd. v. Asuncion,
supra,  read as follows:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but (also)
the payment of the prescribed docket fee that vests a trial court with jurisdiction over the
subject-matter or nature of the action. Where the filing of the initiatory pleading is not
accompanied by payment of the docket fee, the court may allow payment of the fee within
a reasonable time but in no case beyond the applicable prescriptive or reglementary
period.
2. The same rule applies to permissive counterclaims, 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.
As will be noted, the requirement in Circular No. 7 that complaints, petitions, answers,
and similar pleadings should specify the amount of damages being prayed for not only in
the body of the pleading but also in the prayer, has not been altered. What has been
revised is the rule that subsequent "amendment of the complaint or similar pleading will
not thereby vest jurisdiction in the Court, much less the payment of the docket fee based
on the amount sought in the amended pleading," the trial court now being authorized to
allow payment of the fee within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period. Moreover, a new rule has been added, governing
awards of claims not specified in the pleading - i.e., damages arising after the filing of the
complaint or similar pleading-as to which the additional filing fee therefor shall
constitute a lien on the judgment.
Now, under the Rules of Court, docket or filing fees are assessed on the basis of the "sum
claimed," on the one hand, or the "value of the property in litigation or the value of the
estate," on the other. 18 There are, in other words, as already above intimated, actions or
proceedings involving real property, in which the value of the property is immaterial to
the court's jurisdiction, account thereof being taken merely for assessment of the legal
fees; and there are actions or proceedings, involving personal property or the recovery of
money and/or damages, in which the value of the property or the amount of the demand
is decisive of the trial court's competence (aside from being the basis for fixing the
corresponding docket fees). 19
Where the action is purely for the recovery of money or damages, the docket fees are
assessed on the basis of the aggregate amount claimed, exclusive only of interests and
costs. In this case, the complaint or similar pleading should, according to Circular No. 7 of
this Court, "specify the amount of damages being prayed for not only in the body of the
pleading but also in the prayer, and said damages shall be considered in the assessment
of the filing fees in any case."
Two situations may arise. One is where the complaint or similar pleading sets out a claim
purely for money or damages and there is no precise statement of the amounts being
claimed. In this event the rule is that the pleading will "not be accepted nor admitted, or
shall otherwise be expunged from the record." In other words, the complaint or pleading
may be dismissed, or the claims as to which the amounts are unspecified may be
expunged, although as aforestated the Court may, on motion, permit amendment of the
complaint and payment of the fees provided the claim has not in the meantime become
time-barred. The other is where the pleading does specify the amount of every claim, but
the fees paid are insufficient; and here again, the rule now is that the court may allow a
reasonable time for the payment of the prescribed fees, or the balance thereof, and upon
such payment, the defect is cured and the court may properly take cognizance of the
action, unless in the meantime prescription has set in and consequently barred the right
of action.
Where the action involves real property and a related claim for damages as well, the legal
fees shall be assessed on the basis of both (a) the value of the property and (b) the total
amount of related damages sought. The Court acquires jurisdiction over the action if the
filing of the initiatory pleading is accompanied by the payment of the requisite fees, or, if
the fees are not paid at the time of the filing of the pleading, as of the time of full payment
of the fees within such reasonable time as the court may grant, unless, of course,
prescription has set in the meantime. But where-as in the case at bar-the fees prescribed
for an action involving real property have been paid, but the amounts of certain of the
related damages (actual, moral and nominal) being demanded are unspecified, the action
may not be dismissed. The Court undeniably has jurisdiction over the action involving the
real property, acquiring it upon the filing of the complaint or similar pleading and
payment of the prescribed fee. And it is not divested of that authority by the circumstance
that it may not have acquired jurisdiction over the accompanying claims for damages
because of lack of specification thereof. What should be done is simply to expunge those
claims for damages as to which no amounts are stated, which is what the respondent
Courts did, or allow, on motion, a reasonable time for the amendment of the complaints
so as to allege the precise amount of each item of damages and accept payment of the
requisite fees therefor within the relevant prescriptive period.
WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.

G.R. No. 89747 July 20, 1990
MAERSK-TABACALERA SHIPPING AGENCY (FILIPINAS), INC., petitioner,  papers prior to the departure of the truck bearing said container for
vs.
THE HON. COURT OF APPEALS, MONET'S EXPORT AND MANUFACTURING
CORPORATION AND/OR VICENTE TAGLE, respondents.
Bito, Lozada, Ortega & Castillo for petitioner.
Jesus F. Salazar for private respondent.
GRIÑO-AQUINO, J.:
This is a petition for review on certiorari of the decision dated July 12, 1989 of the Court
of Appeals in CA-G.R. CV No. 18124 affirming that of the Regional Trial Court of Legaspi
City in Civil Case No. 7480 which awarded damages to the plaintiff, now private
respondent, Monet's Export and Manufacturing (Monet for short) against the petitioner
Maersk- Tabacalera Shipping Agency (Filipinas), Inc., (Maersk for short) for breach of a
(contract of carriage. The facts are stated in the decision of the Court of Appeals as
follows:
On May 21, 1985, a complaint for damages was filed by plaintiff
Monet's Export and Manufacturing Corporation (Monet's) and/or
Vicente Tagle against defendants Maersk Tabacalera Shipping
(Maersk) and the New Asia Enterprises (New Asia) and/or Manuel
Ranola, alleging, among other things, that plaintiff, like defendant New
Asia, is engaged in the export of locally-made handicrafts and
products, while defendant Maersk Line is engaged in furnishing
containerized services through which Monet's and New Asia normally
ship their goods; that on March 11, 1984, plaintiff, after complying
with all the export and custom requirements, loaded its goods in
Maersk's container to be delivered on or before March 15, 1984 to
Manila for immediate trans-shipment to its port of destination; that
through fraud and malice, and without prior notice to Monet's, Maersk
unloaded the goods at New Asia's factory site at Tagas, Daraga, Albay
to give way to the latter's own export shipment; that Monet's shipment
was later returned to its warehouse at Banag, Daraga, Albay; and that
because of this occurrence, Monet's had to secure another shipper,
thereby incurring unnecessary expenses as well as suffering mental
anguish, worry and sleepless nights thinking of the possibility of losing
its trading partners which would seriously doubt Monet's capacity as a
respectable exporter. Monet's likewise alleged having suffered actual,
moral and exemplary damages (p. 1, Record).
Answering the complaint, Maersk contended that contrary to Monet's
allegations, the latter's shipment was loaded on March 10, 1984 in
Maersk container subject to the condition that the bill of lading would
be issued upon Monet's compliance with all the necessary export
Manila on March 11, 1984. Maersk further alleged that Monet's knew
that the subject goods would not be brought to Manila without
submitting all the necessary export papers, as without them, Maersk
would incur charges on the cargo when deposited at the customs
warehouse in Manila and would subsequently be not allowed to export
the goods by custom authorities. (p. 16, Record).i•t•c-aüsl
Defendant New Asia, for its part, denied any liability in favor of
Monet's, alleging that Monet's has no cause of action against it not
being a party to the contract of carriage between Monet and Maersk (p.
24, Record).
Defendants during the hearing of February 17, 1986 were considered
as in default for their failure to attend the scheduled pre-trial
conference despite proper notice. Subsequently, the order of default in
regard to defendant Maersk was lifted and the latter was allowed to
cross-examine all the witnesses of Monet's. Defendant New Asia did
not move for the lifting of the order of default and accordingly
remained as in default. (p. 204, Record.)
On March 28, 1988, the appealed judgment was rendered:
WHEREFORE, premises considered, defendant Maersk Shipping Line is
found to be liable to plaintiff for damages in the following amounts:
For breach of contract of carriage, P50,000.00; for moral damages
brought about by the wanton bad faith employed by defendant
shipping line in the performance of its contractual obligation,
P50,000.00; and as exemplary damages, another P50,000.00 and for
attomey's fees, P20,000.00.
Defendant New Asia Enterprises is exonerated of any liability, there
being no valid cause of action by plaintiff against it. New Asia
Enterprises cannot be made answerable for whatever action or
violation of contracted obligation defendant Maersk Line may have
committed against plaintiff because they are 2 separate corporations
and there is no proof of any collusion between them. (pp. 27-28,
Rollo.)
Maersk appealed to the Court of Appeals which affirmed the judgment
of the trial court on July 12, 1989.
Hence, the instant petition wherein Maersk raises the following issues:
1. Respondent court erred in affirming the judgment of the trial court
despite the obvious fact that the trial court never acquired jurisdiction
over the subject-matter of the action because private respondents did
not specify their claims for damages and the correct filing fees were
not paid.
2. It was error for respondent court to have awarded P50,000.00 for
"breach of contract" because this is not a form of damage and
petitioner has a right to know for what it is being made to pay.
3. Respondent court erred also in awarding moral damages to a
corporation that was not shown to have a good reputation that was
damaged.
4. Again, respondent court erred in awarding exemplary damages in
the absense of evidence that petitioner acted in a wanton or
malevolent manner.
5. Finally, respondent court erred in awarding attorney's fees without
any explanation for such an award. (pp. 13-14, Rollo.)
Petitioner's allegation that the decisions of the trial court and the
Court of Appeals were void for lack of jurisdiction (p. 75, Rollo) as
Monet did not pay the correct filing fee on its claims for actual, moral
and exemplary damages, the amounts of which were not specified in
the body and prayer of its complaint, is anchored in the following
ruling of this Court in Manchester Development Corporation vs. CA (149
SCRA 526 [1987]) —
... the trial court did not acquire jurisdiction over the case by the
payment of only P410.00 as docket fee. ...
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 assestment of
the filing fees in any case. Any pleading that fails to comply with the
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 amounts sought in the
amended pleading. (Emphasis supplied; pp. 568-569.)
Unlike Manchester, however, where the jurisdictional issue arising from insufficiency of
the docket fee paid, was seasonably raised in the answer of the defendant in the trial
court, in this case the issue is being raised for the first time in this Court. Petitioner
submitted to the jurisdiction of the trial court without question. It filed a counterclaim
seeking affirmative reliefs, and actively took part in the trial (p. 53, Rollo). A party who
voluntarily participates in the trial cannot later on raise the issue of the court's lack of
jurisdiction (Tan Boon Bee & Co. v. Judge Jarencio, 163 SCRA 205).
Maersk should have raised its objection to the trial court s jurisdiction when the case was
still in that court. It should not have waited for an adverse decision by the Court of
Appeals before waking up to raise the question of jurisdiction. As this Court remarked
in Tijam v. Sibonghanoy, 23 SCRA 29, 37:
Were we to sanction such conduct on its part, We would in effect be
declaring as useless all the proceedings had in the present case since it
was commenced ... and compel the judgment creditors to go up their
Calvary once more. The inequity and unfairness of this is not only
patent but revolting.
A party may be barred by laches from invoking his plea (of lack of
jurisdiction) for the first time on appeal for the purpose of annulling
everything done in the case with the active participation of said party
invoking the plea. (Tijam vs. Sibonghanoy, 23 SCRA 29, 34.)
Since this is a case where some of the claims (for moral and exemplary damages) were
not specified in the plaintiff s pleading and were left for determination by the court, the
applicable rule is the third rule set out in the decision of this Court in Sun Insurance Office
Ltd., et al. vs. Hon. Maximiano Asuncion, et al., 170 SCRA 274, to wit:
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 therefore shall constitute a lien on
the judgment. It shall be the responsibility of the Clerk of Court or his
duly authorized deputy to enforce said lien and assess and collect the
additional fee.
The Clerk of Court of the trial court shall assess and collect the proper additional fees on
the totality of the judgment for the private respondent (Id).
Monet's counsel in the trial court, Attorney Jesus Salazar, is hereby reprimanded for his
unethical practice of not specifying the amount of damages sought in the body and prayer
sof his complaint in order to defraud the Government of the proper fee for docketing said
complaint. He is warned that a repetition of that malpractice will be dealt with more
severely.
WHEREFORE, the petition for certiorari is denied for lack of merit. However, the Clerk of
Court of the trial court shall assess and collect the fees due on the judgment as if the same
amounts were specified in the complaint. Costs against the petitioner.
SO ORDERED.
[G.R. No. 140954. April 12, 2005]
HEIRS OF BERTULDO[1] HINOG: Bertuldo Hinog II, Bertuldo Hinog III, Bertuldo
Hinog, Jr., Jocelyn Hinog, Bertoldo Hinog IV, Bertoldo Hinog V, Edgardo
Hinog, Milagros H. Pabatao, Lilian H. King, Victoria H. Engracia, Terisita C.
Hinog, Paz H. Besana, Roberto C. Hinog, Vicente C. Hinog, Roel C. Hinog,
Marilyn C. Hinog, Bebot C. Hinog, lordes C. Hinog, Pablo Chiong, Arlene
Lanasang (All respresented by Bertuldo Hinog III), petitioners, vs. HON.
ACHILLES MELICOR, in his capacity as Presiding Judge, RTC, Branch 4,
7th Judicial Region, Tagbiliran City, Bohol, and CUSTODIO BALANE, RUFO
BALANE, HONORIO BALANE, and TOMAS BALANE, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for certiorari and prohibition under Rule 65 of the Rules of
Court which assails the Orders dated March 22, 1999, August 13, 1999 and October 15,
1999 of the Regional Trial Court, Branch 4, of Tagbilaran City, Bohol in Civil Case No.
4923.
The factual background of the case is as follows:
On May 21, 1991, private respondents Custodio, Rufo, Tomas and Honorio, all
surnamed Balane, filed a complaint for Recovery of Ownership and Possession, Removal
of Construction and Damages against Bertuldo Hinog (Bertuldo for brevity). They alleged
that: they own a 1,399- square meter parcel of land situated in Malayo Norte, Cortes,
Bohol, designated as Lot No. 1714; sometime in March 1980, they allowed Bertuldo to use
a portion of the said property for a period of ten years and construct thereon a small
house of light materials at a nominal annual rental of P100.00 only, considering the close
relations of the parties; after the expiration of the ten-year period, they demanded the
return of the occupied portion and removal of the house constructed thereon but
Bertuldo refused and instead claimed ownership of the entire property.
Accordingly, private respondents sought to oust Bertuldo from the premises of the
subject property and restore upon themselves the ownership and possession thereof, as
well as the payment of moral and exemplary damages, attorneys fees and litigation
expenses in amounts justified by the evidence. [2]
On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of the disputed
property by virtue of a Deed of Absolute Sale dated July 2, 1980, executed by one Tomas
Pahac with the knowledge and conformity of private respondents. [3]
After the pre-trial, trial on the merits ensued. On November 18, 1997, private
respondents rested their case. Thereupon, Bertuldo started his direct examination.
However, on June 24, 1998, Bertuldo died without completing his evidence.
On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for Bertuldo as
his services were terminated by petitioner Bertuldo Hinog III. Atty. Veronico G. Petalcorin
then entered his appearance as new counsel for Bertuldo.[4]
On September 22, 1998, Atty. Petalcorin filed a motion to expunge the complaint
from the record and nullify all court proceedings on the ground that private respondents
failed to specify in the complaint the amount of damages claimed so as to pay the correct
docket fees; and that under Manchester Development Corporation vs. Court of Appeals,
[5]
 non-payment of the correct docket fee is jurisdictional. [6]
In an amended motion, filed on October 2, 1998, Atty. Petalcorin further alleged that
the private respondents failed to pay the correct docket fee since the main subject matter
of the case cannot be estimated as it is for recovery of ownership, possession and removal
of construction.[7]
Private respondents opposed the motion to expunge on the following grounds: (a)
said motion was filed more than seven years from the institution of the case; (b) Atty.
Petalcorin has not complied with Section 16, Rule 3 of the Rules of Court which provides
that the death of the original defendant requires a substitution of parties before a lawyer
can have legal personality to represent a litigant and the motion to expunge does not
mention of any specific party whom he is representing; (c) collectible fees due the court
can be charged as lien on the judgment; and (d) considering the lapse of time, the motion
is merely a dilatory scheme employed by petitioners. [8]
In their Rejoinder, petitioners manifested that the lapse of time does not vest the
court with jurisdiction over the case due to failure to pay the correct docket fees. As to the
contention that deficiency in payment of docket fees can be made as a lien on the
judgment, petitioners argued that the payment of filing fees cannot be made dependent
on the result of the action taken.[9]
On January 21, 1999, the trial court, while ordering the complaint to be expunged
from the records and the nullification of all court proceedings taken for failure to pay the
correct docket fees, nonetheless, held:
The Court can acquire jurisdiction over this case only upon the payment of the exact
prescribed docket/filing fees for the main cause of action, plus additional docket fee for
the amount of damages being prayed for in the complaint, which amount should be
specified so that the same can be considered in assessing the amount of the filing fees.
Upon the complete payment of such fees, the Court may take appropriate action in the
light of the ruling in the case of Manchester Development Corporation vs. Court of
Appeals, supra.[10]
Accordingly, on January 28, 1999, upon payment of deficiency docket fee, private
respondents filed a manifestation with prayer to reinstate the case. [11] Petitioners
opposed the reinstatement[12] but on March 22, 1999, the trial court issued the first
assailed Order reinstating the case.[13]
On May 24, 1999, petitioners, upon prior leave of court, [14] filed their supplemental
pleading, appending therein a Deed of Sale dated November 15, 1982. [15] Following the
submission of private respondents opposition thereto, [16] the trial court, in its Order dated
July 7, 1999, denied the supplemental pleading on the ground that the Deed of Absolute
Sale is a new matter which was never mentioned in the original answer dated July 2,
1991, prepared by Bertuldos original counsel and which Bertuldo verified; and that such
new document is deemed waived in the light of Section 1, Rule 9 [17] of the Rules of Court.
The trial court also noted that no formal substitution of the parties was made because of
the failure of defendants counsel to give the names and addresses of the legal
representatives of Bertuldo, so much so that the supposed heirs of Bertuldo are not
specified in any pleading in the case. [18]
On July 14, 1999, petitioners manifested that the trial court having expunged the
complaint and nullified all court proceedings, there is no valid case and the complaint
should not be admitted for failure to pay the correct docket fees; that there should be no
case to be reinstated and no case to proceed as there is no complaint filed. [19]
After the submission of private respondents opposition [20] and petitioners rejoinder,
[21]
 the trial court issued the second assailed Order on August 13, 1999, essentially
denying petitioners manifestation/rejoinder. The trial court held that the issues raised in
such manifestation/rejoinder are practically the same as those raised in the amended
motion to expunge which had already been passed upon in the Order dated January 21,
1999. Moreover, the trial court observed that the Order dated March 22, 1999 which
reinstated the case was not objected to by petitioners within the reglementary period or
even thereafter via a motion for reconsideration despite receipt thereof on March 26,
1999.[22]
On August 25, 1999, petitioners filed a motion for reconsideration [23] but the same
was denied by the trial court in its third assailed Order dated October 15, 1999. The trial
court held that the Manchester rule was relaxed in Sun Insurance Office, Ltd. vs. Asuncion.
[24]
 Noting that there has been no substitution of parties following the death of Bertuldo,
the trial court directed Atty. Petalcorin to comply with the provisions of Section 16, Rule
3 of the Rules of Court. The trial court also reiterated that the Order dated March 22,
1999 reinstating the case was not assailed by petitioners within the reglementary period,
despite receipt thereof on March 26, 1999. [25]
On November 19, 1999, Atty. Petalcorin complied with the directive of the trial
court to submit the names and addresses of the heirs of Bertuldo. [26]
On November 24, 1999, petitioners filed before us the present petition
for certiorari and prohibition.[27] They allege that the public respondent committed grave
abuse of discretion in allowing the case to be reinstated after private respondents paid
the docket fee deficiency since the trial court had earlier expunged the complaint from
the record and nullified all proceedings of the case and such ruling was not contested by
the private respondents. Moreover, they argue that the public respondent committed
grave abuse of discretion in allowing the case to be filed and denying the manifestation
with motion to dismiss, despite the defect in the complaint which prayed for damages
without specifying the amounts, in violation of SC Circular No. 7, dated March 24, 1988.
In their Comment, private respondents aver that no grave abuse of discretion was
committed by the trial court in reinstating the complaint upon the payment of deficiency
docket fees because petitioners did not object thereto within the reglementary period.
Besides, Atty. Petalcorin possessed no legal personality to appear as counsel for the heirs
of Bertuldo until he complies with Section 16, Rule 3 of the Rules of Court. [28]
At the outset, we note the procedural error committed by petitioners in directly
filing the instant petition before this Court for it violates the established policy of strict
observance of the judicial hierarchy of courts.
Although the Supreme Court, Court of Appeals and the Regional Trial Courts have
concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto,
habeas corpus and injunction, such concurrence does not give the petitioner unrestricted
freedom of choice of court forum. [29] As we stated in People vs. Cuaresma:[30]
This Court's original jurisdiction to issue writs of certiorari is not exclusive.  It is shared
by this Court with Regional Trial Courts and with the Court of Appeals.  This concurrence
of jurisdiction is not, however, to be taken as according to parties seeking any of the writs
an absolute, unrestrained freedom of choice of the court to which application therefor
will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of
the venue of appeals, and also serves as a general determinant of the appropriate forum
for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy
most certainly indicates that petitions for the issuance of extraordinary writs against first
level (inferior) courts should be filed with the Regional Trial Court, and those against the
latter, with the Court of Appeals. A direct invocation of the Supreme Courts original
jurisdiction to issue these writs should be allowed only when there are special and
important reasons therefor, clearly and specifically set out in the petition. This is [an]
established policy. It is a policy necessary to prevent inordinate demands upon the Courts
time and attention which are better devoted to those matters within its exclusive
jurisdiction, and to prevent further over-crowding of the Courts docket. [31]
The rationale for this rule is two-fold: (a) it would be an imposition upon the precious
time of this Court; and (b) it would cause an inevitable and resultant delay, intended or
otherwise, in the adjudication of cases, which in some instances had to be remanded or
referred to the lower court as the proper forum under the rules of procedure, or as better
equipped to resolve the issues because this Court is not a trier of facts. [32]
Thus, this Court will not entertain direct resort to it unless the redress desired
cannot be obtained in the appropriate courts, and exceptional and compelling
circumstances, such as cases of national interest and of serious implications, justify the
availment of the extraordinary remedy of writ of certiorari, calling for the exercise of its
primary jurisdiction. Exceptional and compelling circumstances were held present in the
following cases: (a) Chavez vs. Romulo[33] on citizens right to bear arms; (b) Government of
the United States of America vs. Purganan [34] on bail in extradition proceedings;
(c) Commission on Elections vs. Quijano-Padilla [35] on government contract involving
modernization and computerization of voters registration list; (d) Buklod ng Kawaning
EIIB vs. Zamora[36] on status and existence of a public office; and (e) Fortich vs.
Corona[37] on the so-called Win-Win Resolution of the Office of the President which
modified the approval of the conversion to agro-industrial area.
In this case, no special and important reason or exceptional and compelling
circumstance analogous to any of the above cases has been adduced by the petitioners so
as to justify direct recourse to this Court. The present petition should have been initially
filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of
courts. Failure to do so is sufficient cause for the dismissal of the petition at bar.
In any event, even if the Court disregards such procedural flaw, the petitioners
contentions on the substantive aspect of the case fail to invite judgment in their favor.
The unavailability of the writ of certiorari and prohibition in this case is borne out
of the fact that petitioners principally assail the Order dated March 22, 1999 which they
never sought reconsideration of, in due time, despite receipt thereof on March 26, 1999.
Instead, petitioners went through the motion of filing a supplemental pleading and only
when the latter was denied, or after more than three months have passed, did they raise
the issue that the complaint should not have been reinstated in the first place because the
trial court had no jurisdiction to do so, having already ruled that the complaint shall be
expunged.
After recognizing the jurisdiction of the trial court by seeking affirmative relief in
their motion to serve supplemental pleading upon private respondents, petitioners are
effectively barred by estoppel from challenging the trial courts jurisdiction. [38] If a party
invokes the jurisdiction of a court, he cannot thereafter challenge the courts jurisdiction
in the same case.[39] To rule otherwise would amount to speculating on the fortune of
litigation, which is against the policy of the Court. [40]
Nevertheless, there is a need to correct the erroneous impression of the trial court
as well as the private respondents that petitioners are barred from assailing the Order
dated March 22, 1999 which reinstated the case because it was not objected to within the
reglementary period or even thereafter via a motion for reconsideration despite receipt
thereof on March 26, 1999.
It must be clarified that the said order is but a resolution on an incidental matter
which does not touch on the merits of the case or put an end to the proceedings. [41] It is an
interlocutory order since there leaves something else to be done by the trial court with
respect to the merits of the case. [42] As such, it is not subject to a reglementary period.
Reglementary period refers to the period set by the rules for appeal or further review of a
final judgment or order, i.e., one that ends the litigation in the trial court.
Moreover, the remedy against an interlocutory order is generally not to resort
forthwith to certiorari, but to continue with the case in due course and, when an
unfavorable verdict is handed down, to take an appeal in the manner authorized by law.
[43]
 Only when the court issued such order without or in excess of jurisdiction or with
grave abuse of discretion and when the assailed interlocutory order is patently erroneous
and the remedy of appeal would not afford adequate and expeditious relief
will certiorari be considered an appropriate remedy to assail an interlocutory order.
[44]
 Such special circumstances are absolutely wanting in the present case.
Time and again, the Court has held that the Manchester rule has been modified
in Sun Insurance Office, Ltd. (SIOL) vs. Asuncion [45] which defined the following guidelines
involving the payment of docket fees:
1. It is not simply the filing of the complaint or appropriate initiatory pleading,
but the payment of the prescribed docket fee, that vests a trial court with
jurisdiction over the subject-matter or nature of the action. Where the
filing of the initiatory pleading is not accompanied by payment of the
docket fee, the court may allow payment of the fees within a reasonable
time but in no case beyond the applicable prescriptive or reglementary
period.
2. The same rule applies to permissive counterclaims, third-party claims and
similar pleadings, which shall not be considered filed until and unless the
filing fee prescribed therefor is paid. The court may also allow payment of
said fee within a reasonable time but also in no case beyond its applicable
prescriptive or reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the
appropriate pleading and payment of the prescribed filing fee but,
subsequently, the judgment awards a claim not specified in the pleading,
or if specified the same has been left for determination by the court, the
additional filing fee therefor shall constitute a lien on the judgment. It shall
be the responsibility of the Clerk of Court or his duly authorized deputy to
enforce said lien and assess and collect the additional fee.
 Plainly, while the payment of the prescribed docket fee is a jurisdictional
requirement, even its non-payment at the time of filing does not automatically cause the
dismissal of the case, as long as the fee is paid within the applicable prescriptive or
reglementary period, more so when the party involved demonstrates a willingness to
abide by the rules prescribing such payment. [46] Thus, when insufficient filing fees were
initially paid by the plaintiffs and there was no intention to defraud the government,
the Manchester rule does not apply.[47]
Under the peculiar circumstances of this case, the reinstatement of the complaint
was just and proper considering that the cause of action of private respondents, being a
real action, prescribes in thirty years, [48] and private respondents did not really intend to
evade the payment of the prescribed docket fee but simply contend that they could not be
faulted for inadequate assessment because the clerk of court made no notice of demand
or reassessment.[49] They were in good faith and simply relied on the assessment of the
clerk of court.
Furthermore, the fact that private respondents prayed for payment of damages in
amounts justified by the evidence  does not call for the dismissal of the complaint for
violation of SC Circular No. 7, dated March 24, 1988 which required that all complaints
must specify the amount of damages sought not only in the body of the pleadings but also
in the prayer in order to be accepted and admitted for filing. Sun Insurance effectively
modified SC Circular No. 7 by providing that filing fees for damages and awards that
cannot be estimated constitute liens on the awards finally granted by the trial court. [50]
Thus, while the docket fees were based only on the real property valuation, the trial
court acquired jurisdiction over the action, and judgment awards which were left for
determination by the court or as may be proven during trial would still be subject to
additional filing fees which shall constitute a lien on the judgment. It would then be the
responsibility of the Clerk of Court of the trial court or his duly authorized deputy to
enforce said lien and assess and collect the additional fees. [51] 
It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he did not
raise the issue of lack of jurisdiction for non-payment of correct docket fees. Instead, he
based his defense on a claim of ownership and participated in the proceedings before the
trial court. It was only in September 22, 1998 or more than seven years after filing the
answer, and under the auspices of a new counsel, that the issue of jurisdiction was raised
for the first time in the motion to expunge by Bertuldos heirs.
After Bertuldo vigorously participated in all stages of the case before the trial court
and even invoked the trial courts authority in order to ask for affirmative relief,
petitioners, considering that they merely stepped into the shoes of their predecessor, are
effectively barred by estoppel from challenging the trial courts jurisdiction. Although the
issue of jurisdiction may be raised at any stage of the proceedings as the same is
conferred by law, it is nonetheless settled that a party may be barred from raising it on
ground of laches or estoppel.[52]
Moreover, no formal substitution of the parties was effected within thirty days from
date of death of Bertuldo, as required by Section 16, Rule 3 [53] of the Rules of Court.
Needless to stress, the purpose behind the rule on substitution is the protection of the
right of every party to due process. It is to ensure that the deceased party would continue
to be properly represented in the suit through the duly appointed legal representative of
his estate.[54] Non-compliance with the rule on substitution would render the proceedings
and judgment of the trial court infirm because the court acquires no jurisdiction over the
persons of the legal representatives or of the heirs on whom the trial and the judgment
would be binding.[55] Thus, proper substitution of heirs must be effected for the trial court
to acquire jurisdiction over their persons and to obviate any future claim by any heir that
he was not apprised of the litigation against Bertuldo or that he did not authorize Atty.
Petalcorin to represent him.
The list of names and addresses of the heirs was submitted sixteen months after the
death of Bertuldo and only when the trial court directed Atty. Petalcorin to comply with
the provisions of Section 16, Rule 3 of the Rules of Court. Strictly speaking therefore,
before said compliance, Atty. Petalcorin had no standing in the court a quo when he filed
his pleadings. Be that as it may, the matter has been duly corrected by the Order of the
trial court dated October 15, 1999.
To be sure, certiorari under Rule 65[56] is a remedy narrow in scope and inflexible in
character. It is not a general utility tool in the legal workshop. [57] It offers only a limited
form of review. Its principal function is to keep an inferior tribunal within its jurisdiction.
[58]
 It can be invoked only for an error of jurisdiction, that is, one where the act
complained of was issued by the court, officer or a quasi-judicial body without or in
excess of jurisdiction, or with grave abuse of discretion which is tantamount to lack or in
excess of jurisdiction,[59] not to be used for any other purpose, [60] such as to cure errors in
proceedings or to correct erroneous conclusions of law or fact. [61] A contrary rule would
lead to confusion, and seriously hamper the administration of justice.
Petitioners utterly failed to show that the trial court gravely abused its discretion in
issuing the assailed resolutions. On the contrary, it acted prudently, in accordance with
law and jurisprudence.
WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit.
No costs.
SO ORDERED.

[G.R. No. 136325. July 29, 2005]
MANUEL M. SERRANO, petitioner, vs. EUGENIO C. DELICA, respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
At bar is a petition for review on certiorari[1] assailing the Decision[2] dated
September 30, 1998 and Resolution dated November 13, 1998 of the Court of Appeals in
CA-G.R. SP No. 46632, entitled Manuel M. Serrano, petitioner, vs. Hon. Alberto L. Lerma,
Presiding Judge, Regional Trial Court, Branch 256, Muntinlupa City, and Eugenio C. Delica,
respondents.
The petition stemmed from the following facts:
On June 30, 1997, Eugenio C. Delica, respondent, filed with the Regional Trial Court,
Branch 256, Muntinlupa City, presided by Judge Alberto L. Lerma, a complaint for
cancellation of Deeds of Sale, Transfer Certificates of Title, Joint Venture Agreement, and
damages, with prayer for the issuance of a writ of preliminary injunction and temporary
restraining order, docketed as Civil Case No. 97-120. Impleaded as defendants were
Manuel M. Serrano, now petitioner, Manuel P. Blanco, MBJ Land, Inc., and MARILAQUE
Land, Inc.
The complaint alleges inter alia  that respondent is the registered owner of ten
parcels of land situated in Bagbagan, Muntinlupa City, with a total area of 2,062,475
square meters, more or less, covered by ten Transfer Certificates of Title (TCT) Nos. S-
12619 to S-12628 of the Registry of Deeds, same city. On August 10, 1995, after having
been promised with financial bonanza by petitioner and Manuel Blanco, respondent
executed in favor of the latter a special power of attorney. Blanco then sold to MBJ Land,
Inc. respondents three parcels of land covered by TCT Nos. S-12625, S-12626 and S-
12628. Thus, these titles were cancelled and in lieu thereof, TCT Nos. 207282, 207283
and 207284 were issued in the name of MBJ Land, Inc.
On December 4, 1996, MBJ Land, Inc. entered into a Joint Venture Agreement with
MARILAQUE Land, Inc. involving the three parcels of land.
On December 23, 1996, petitioner Serrano again unduly influenced, coerced and
intimidated respondent into executing an affidavit wherein he confirmed that he sold his
remaining seven parcels of land, covered by TCT Nos. S-12619 to S-126124 and S-12627,
to petitioners. Later, respondent found that these seven titles were cancelled and new
titles (TCT Nos. 209636 to 209642) were issued in petitioners name based on a spurious
Deed of Absolute Sale.
Respondent thus prayed in his complaint that the special power of attorney,
affidavit, the new titles issued in the names of petitioner and MBJ Land, Inc., and contracts
of sale be cancelled; and that petitioner and his co-defendants be ordered to pay
respondent, jointly and severally, actual, moral and exemplary damages in the amount
of P200,000.00, as well as attorneys fee of P200,000.00 and costs of litigation.
Respondent likewise prayed that, pending trial on the merits, a temporary restraining
order and a writ of preliminary injunction be issued ordering the defendants to
immediately restore him to his possession of the parcels of land in question; and that
after trial, the writ of injunction be made permanent.
Petitioner then filed his answer with compulsory counterclaim, denying the
material allegations of the complaint.
Respondent later amended his complaint.
On August 5, 1997, the trial court issued a temporary restraining order and
on September 8, 1997, a preliminary injunction directing petitioner and his co-
defendants to immediately restore respondent to his possession.
Petitioner then filed consolidated motions for reconsideration praying that the
complaint be dismissed for respondents failure to pay the required docket fee; and that
Judge Lerma be directed to inhibit himself from hearing the case.
The trial court, in its Order dated January 7, 1998, denied petitioners consolidated
motions.
Petitioner seasonably filed with the Court of Appeals a petition for certiorari and
prohibition with application for a preliminary injunction and temporary restraining
order assailing the trial courts twin Orders dated September 8, 1997 ordering the
issuance of a writ of preliminary injunction; and denying his consolidated motions dated
January 7, 1998. Petitioner raised three issues: (a) whether respondent paid the correct
docket fee; (b) whether the trial courts issuance of the writ of preliminary injunction is in
order; and (c) whether Judge Lerma should inhibit himself from hearing the case.
On September 30, 1998, the Court of Appeals rendered a Decision partially
granting  the petition by: (1) affirming the trial courts ruling that the docket fee was
correctly paid; (2) setting aside the trial courts Order directing the issuance of a writ of
preliminary injunction; and (3) leaving the matter of inhibition to the discretion of
Judge Lerma.
Petitioner then filed a motion for partial reconsideration of the Court of Appeals
ruling that respondent correctly paid the docket fee and that the motion for inhibition
should be addressed to Judge Lermas sound discretion.
In a Resolution dated November 13, 1998, the Appellate Court denied the motion.
Hence the instant petition for review on certiorari.
The core issues for our resolution are:
1. Whether respondent paid the correct docket fee when he filed his complaint in Civil
Case No. 97-120; and
2. Whether the matter of inhibition should be addressed to Judge Lermas discretion.
On the first issue, we cannot overemphasized the importance of paying the correct
docket fees. Such fees are intended to take care of court expenses in the handling of cases
in terms of cost of supplies, use of equipment, salaries and fringe benefits of personnel,
etc., computed as to man-hours used in the handling of each case. The payment of said
fees, therefore, cannot be made dependent on the result of the action taken, without
entailing tremendous losses to the government and to the judiciary in particular. [3]
Thus, the rule is that upon the filing of the pleading or other application which
initiates an action or proceeding, the fees prescribed therefor shall be paid in full.
[4]
 However, a litigant who is a pauper is exempt from the payment of the docket fees. But
the fees shall be a lien on the judgment rendered in favor of said pauper litigant, unless
the court otherwise provides.[5]
It is not simply the filing of the complaint or appropriate initiatory pleading, but the
payment of the prescribed docket fees that vests a trial court with jurisdiction over the
subject matter or nature of the action.[6]
In the case at bar, petitioner impugns the Court of Appeals ruling that respondents
complaint in Civil Case No. 97-120 is not capable of pecuniary estimation and that,
therefore, the docket fee is fixed at P600.00 pursuant to Section 7(b)(1), Rule 141 of the
Revised Rules of Court.
We agree with petitioner that the Court of Appeals erred in issuing such ruling. It
should have considered the allegations of the complaint and the character of the reliefs
sought, the criteria in determining the nature of an action. [7]
A careful examination of respondents complaint is that it is a real action.
In Paderanga vs. Buissan,[8] we held that in a real action, the plaintiff seeks the recovery
of real property, or, as stated in Section 2(a), Rule 4 of the Revised Rules of Court, [9] a
real action is one affecting title to real property or for the recovery of possession of,
or for partition or condemnation of, or foreclosure of a mortgage on a real property.
Obviously, respondents complaint is a real action involving not only the recovery of
real properties, but likewise the cancellation of the titles thereto.
Considering that respondents complaint is a real action, the Rule requires that
the assessed value of the property, or if there is none, the estimated value thereof shall
be alleged by the claimant and shall be the basis in computing the fees.[10]
We note, however, that neither the assessed value nor the estimated value of the
questioned parcels of land were alleged by respondent in both his original and amended
complaint. What he stated in his amended complaint is that the disputed realties have a
BIR zonal valuation of P1,200.00 per square meter. However, the alleged BIR zonal
valuation is not the kind of valuation required by the Rule. It is the assessed value of the
realty.[11] Having utterly failed to comply with the requirement of the Rule that he shall
allege in his complaint the assessed value of his real properties in controversy, the
correct docket fee cannot be computed. As such, his complaint should not have been
accepted by the trial court. We thus rule that it has not acquired jurisdiction over the
present case for failure of herein respondent to pay the required docket fee. On this
ground alone, respondents complaint is vulnerable to dismissal.
Since the complaint is dismissible, the second issue on whether Judge Lerma
should inhibit himself from hearing the case has become moot and academic.
WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the
Court of Appeals in CA-G.R. SP No. 46632 are hereby REVERSED. The complaint in Civil
Case No. 97-120 is ordered DISMISSED without prejudice.
SO ORDERED.
 petitioners Philippine First Insurance Company, Inc. (Philippine First) and Paramount
General Insurance Corporation (Paramount) before the Regional Trial Court (RTC)
of Makati, docketed as Civil Case No. 01-1609, paid the correct docket fee; if in the
negative, whether the complaint should be dismissed or Pyramid can still be ordered to
pay the fee.
Pyramid sought to recover the proceeds of two insurance policies issued to it,
Policy No. IN-002904 issued by petitioner Paramount, and Policy No. MN-MCL-HO-00-
0000007-00 issued by petitioner Philippine First. Despite demands, petitioners allegedly
failed to settle them, hence, it filed the complaint subject of the present petition.
 
In its complaint, Pyramid alleged that on November 8, 2000, its delivery van
bearing license plate number PHL-545 which was loaded with goods belonging to
California Manufacturing Corporation (CMC) valued at PESOS NINE HUNDRED SEVEN
THOUSAND ONE HUNDRED FORTY NINE AND SEVEN/100 (P907,149.07) left the
CMC Bicutan Warehouse but the van, together with the goods, failed to reach its
destination and its driver and helper were nowhere to be found, to its damage and
prejudice; that it filed a criminal complaint against the driver and the helper for qualified
theft, and a claim with herein petitioners as co-insurers of the lost goods but, in violation
of petitioners undertaking under the insurance policies, they refused without just and
valid reasons to compensate it for the loss; and that as a direct consequence of petitioners
failure, despite repeated demands, to comply with their respective undertakings under
the Insurance Policies by compensating for the value of the lost goods, it suffered
damages and was constrained to engage the services of counsel to enforce and protect its
right to recover compensation under said policies, for which services it obligated itself to
pay the sum equivalent to twenty-five (25%) of any amount recovered as and for
attorneys fees and legal expenses.[2]
 
Pyramid thus prayed
PHILIPPINE FIRST INSURANCE CO., INC. and G.R. No. 165147  
PARAMOUNT GENERAL INSURANCE CORPORATION,   . . . that after due proceedings, judgment be rendered,
Petitioners, Present: ordering [herein petitioners] to comply with their obligation under
    their respective Insurance Policies by paying to [it] jointly and
  QUISUMBING, J., Chairperson, severally, the claims arising from the subject losses.
- versus - CARPIO MORALES, THAT, [herein petitioners] be adjudged jointly and severally
  TINGA, to pay to [it], in addition to the foregoing, the following:
  VELASCO, JR. and  
PYRAMID LOGISTICS AND TRUCKING CORPORATION BRION, JJ. 1.            The sum of PHP 50,000.00 plus PHP 1,500.00 for
(formerly PANACOR INTEGRATED WAREHOUSING   each Court session attended by counsel until the
AND TRUCKING CORPORATION), Promulgated: instant [case] is finally terminated, as and
Respondent. July 9, 2008 for attorneys fees;
     
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 2.            The costs of suit[;][3] (Underscoring supplied)
   
DECISION  
  and for other reliefs just and equitable in the premises.[4]
CARPIO MORALES, J.:  
The issue, in the main, in the present case is whether respondent, Pyramid Pyramid was assessed P610 docket fee, apparently on the basis of the amount
Logistics and Trucking Corporation (Pyramid), which filed on November 7, 2001 a of P50,000 specified in the prayer representing attorneys fees, which it duly paid. [5]
complaint,[1]denominated as one for specific performance and damages, against  
 Pyramid later filed a 1st Amended Complaint[6] containing minor changes in its
body  but bearing the same prayer. [8] Branch 148 of the Makati RTC to which the
[7]
complaint was raffled admitted the Amended Complaint. [9]
 
Petitioners filed a Motion to Dismiss on the ground of, inter  alia, lack of
jurisdiction, Pyramid not having paid the docket fees in full, arguing thus:
 
x x x x
 
In the body of the Amended Complaint, plaintiff alleged that
the goods belonging to California Manufacturing Co., Inc. (CMC) is [sic]
valued at Php907,149.07 and consequently, plaintiff incurred
expenses, suffered damages and was constrained to engage the
services of counsel to enforce and protect its right to recover
compensation under the said policies and for which services, it
obligated itself to pay the sum equivalent to twenty-five (25%) of any
recovery in the instant action, as and for attorneys fees and legal
expenses.
 
On the other hand, in the prayer in the Complaint, plaintiff
deliberately omitted to specify what these damages are. x x x
 
x x x x
Verily, this deliberate omission by the plaintiff is clearly
intended for no other purposes than to evade the payment of the
correct filing fee if not to mislead the docket clerk, in the assessment of
the filing fee. In fact, the docket clerk in the instant case charged the
plaintiff a total of Php610.00 only as a filing fee, which she must have
based on the amount of Php50,000.00 [attorneys fees] only.
[10]
 (Emphasis in the original; italics and underscoring supplied)
 
 
Petitioners cited[11] Manchester Development Corporation v. Court of Appeals [12] which held:
 
x x x [A]ll 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 or admitted, or shall otherwise be expunged from the
record.[13] (Emphasis and underscoring supplied)
 
They cited too Sun Insurance Office, Ltd. v. Asuncion[14] which held that [i]t is not simply
the filing of the complaint or appropriate 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.[15]
 
Petitioners thus concluded:
 
With the above cases as a backdrop, the Supreme Court, in
revising the rules of pleading and practice in the 1997 Rules of Civil
Procedure, added a tenth ground to a Motion to Dismiss to wit, [t]hat a
condition precedent for filing claim [sic] has not been complied with.[]
 
On the contrary, if plaintiff would insist that its claim against
the defendants is only Php50,000.00 plus  Php 1,500.00 as appearance
fee per court hearing, then it follows that it is the Metropolitan Trial
Court which has jurisdiction over this case, not this Honorable
Court. Such amount is way below the minimum jurisdictional amount
prescribed by the rules in order to confer jurisdiction to the Regional
Trial Court.[16] (Underscoring supplied)
 
 
To the Motion to Dismiss Pyramid filed its Opposition, [17] alleging that if there
was a mistake in the assessment of the docket fees, the trial court was not precluded from
acquiring jurisdiction over the complaint as it has the authority to direct the mistaken
party to complete the docket fees in the course of the proceedings . . .[18] The Opposition
merited a Reply[19] from petitioners.
 
By Order of June 3, 2002, the trial court [20] denied the Motion to Dismiss in this
wise:
 
x x x x
 
Indeed, a perusal of the Complaint reveals that while plaintiff
made mention of the value of the goods, which were lost, the prayer of
plaintiff did not indicate its exact claim from the defendants. The
Complaint merely prayed defendants to comply with their obligation
under their respective insurance policies by paying to plaintiff jointly
and severally, the claims arising from the subject losses and did not
mention the amount of PHP907,149.07, which is the value of the goods
and which is also the subject of insurance. This resulted to the
assessment and payment of docket fees in the amount of P610
only. The Court, even without the Motion to Dismiss filed by defendant,
actually noted such omission which is actually becoming a practice for
some lawyers. For whatever purpose it may be, the Court will not
dwell into it. In this instant case, this being for specific performance,
it is not dismissible on that ground but unless proper docket fees are
paid, the Court can only grant what was prayed for in the Complaint.
x x x x[21] (Emphasis and underscoring supplied)
 
 
Petitioners Motion for Reconsideration [22] of the denial of their Motion to Dismiss
having been denied[23] by Order of August 1, 2002, they filed their Answer with
Compulsory Counterclaim ad  Cautelam,[24] alleging that they intended to file a Petition for
Certiorari with the Court of Appeals.[25]
  
Petitioners did indeed eventually file before the Court of Appeals a Petition for
Certiorari (With Preliminary Injunction and Urgent Prayer for Restraining Order)
[26]
 posing the following two of three queries, viz:
 
First. Does [Pyramids] deliberate omission to pay the
required correct docket and filing fee vest the trial court [with]
jurisdiction to entertain the subject matter of the instant case?
 
Second. [Is] the instant case an action for specific
performance or simply one for damages or recovery of a sum of
money?
 
x x x x[27]
 
By Decision of June 3, 2004,[28] the Court of Appeals partially granted petitioners
petition for certiorari by setting aside the trial judges assailed orders and ordering
Pyramid to file the correct docket fees within a reasonable time, it holding that while the
complaint was denominated as one for specific performance, it sought to recover from
petitioners Pyramids claims arising from the subject losses. The appellate court
ratiocinated:
 
x x x x
 
Indeed, it has been held that it is not simply the filing of the
complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee that vests a trial court with jurisdiction over the
subject matter or nature of the action. To determine the docket fees, it
is necessary to determine the true nature of the action by
examining the allegations of the complaint. x x x
  decision. Pyramid filed its Comment and Opposition to the Motion for Reconsideration,
[33]
x x x x
While the captions of the complaint and 1 st amended
complaint denominated the case as one for Specific Performance and
Damages, the allegations and prayer therein show that the specific
performance sought by private respondent was for petitioners to
comply with their obligation under their respective Insurance Policies
by paying to plaintiff jointly and severally, the claims arising from
the subject losses as well as the attorneys fees and costs of
suit. Obviously, what constitutes specific performance is the payment
itself by petitioners of private respondents claims arising from the
losses it allegedly incurred. x x x[29]
 
x x x x
 
Public respondent should have ordered private
respondent to pay the correct docket fees on the basis of the
allegations of the complaint. x x x
 
x x x x
 
While it has been held in Manchester Development
Corporation vs. Court of Appeals x x x that any pleading that fails to
comply with this requirement of specifying the amount of damages
not only in the body of the pleading but also in the prayer shall not
be accepted nor admitted, or shall otherwise be expunged from the
record, this rule was relaxed in subsequent cases,
wherein payment of the correct docket fees was allowed
within a reasonable time. . .
x x x x[30] (Emphasis and underscoring supplied)
 
Thus the appellate court disposed:
 
WHEREFORE, the petition is partially granted. The Orders
dated June 3, 2002 and August 1, 2002 of public respondent are
partially set aside insofar as they dispensed with the payment of the
correct docket fees. Consequently, [Pyramid] is hereby directed to pay
the correct docket fees on the basis of the losses alleged in the
body of the complaint, plus the attorneys fees mentioned in the
prayer, within a reasonable time which should not go beyond the
applicable prescriptive or reglementary period. In all other respects,
the said Orders are affirmed.[31] (Underscoring supplied)
 
 
Petitioners filed a Motion for Reconsideration [32] of the appellate courts
arguing thus:
x x x x
 
In the present case, [Pyramid] thru its Complaint simply
sought from petitioners compliance with their contractual undertaking
as insurers of the goods insured which were lost in [its]
custody. Private respondent did not specify the extent of petitioners
obligation as it left the matter entirely in the judgment of the trial
court to consider. Thus, the Complaint was labeled Specific
Performance which [Pyramid] submitted to the Clerk of Court for
assessment of the docket fee, after which, it paid the same based on
the said assessment. There was no indication whatsoever that
[Pyramid] had refused to pay; rather, it merely argued against
petitioners submissions as it maintained the correctness of the
assessment made.[34] (Underscoring supplied)
  
By Resolution of August 23, 2004, the Court of Appeals denied petitioners Motion
for Reconsideration;[35] hence, the present Petition for Review on Certiorari, [36] raising the
issues of whether the appellate court erred:
 
. . . WHEN IT APPLIED IN THE INSTANT CASE THE LIBERAL
RULE ENUNCIATED IN SUN INSURANCE OFFICE, LTD. (SIOL)
VS.  ASUNCION, 170 SCRA 274 AND NATIONAL STEEL CORPORATION
VS. COURT OF APPEALS,  302 SCRA 523 (1999) IN RESPECT TO THE
PAYMENT OF THE PRESCRIBED FILING AND DOCKET FEES DESPITE
CLEAR SHOWING OF RESPONDENTS INTENTION TO EVADE THE
PAYMENT OF THE CORRECT DOCKET FEE  WHICH WARRANTS THE
APPLICATION OF THE DOCTRINE LAID DOWN IN MANCHESTER
DEVELOPMENT CORPORATION  VS. COURT OF APPEALS, 149 SCRA 562.
 
. . . WHEN IT DID NOT APPLY THE RULING  OF THIS HONORABLE
TRIBUNAL IN MARCOPPER MINING CORPORATION VS. GARCIA , 143
SCRA 178, TAN VS. DIRECTOR OF FORESTRY, 125 SCRA 302,
AND CHINA ROAD  AND BRIDGE CORPORATION VS. COURT OF
APPEALS, 348 SCRA 401.[37]  (Underscoring supplied)
 
 
Petitioners invoke the doctrine in Manchester Development Corporation v. Court
of Appeals[38]  that a pleading which does not specify in the prayer the amount sought shall
not be admitted or shall otherwise be expunged, and that the court acquires jurisdiction
only upon the payment of the prescribed docket fee. [39]
 
Pyramid, on the other hand, insists, in its Comment on the Petition, [40] on the
application of Sun Insurance Office, Ltd. (SIOL) v. Asuncion [41] and subsequent rulings
relaxing the Manchester ruling by allowing payment of the docket fee within a reasonable
time, in no case beyond the applicable prescriptive or reglementary period, where the
filing of the initiatory pleading is not accompanied by the payment of the prescribed
docket fee.[42]
In Tacay v. Regional Trial Court of  Tagum, Davao  del Norte,[43] the Court clarified
the effect of the Sun Insurance ruling on the Manchester ruling as follows:
 
As will be noted, the requirement in Circular No. 7 [of this
Court which was issued based on the Manchester ruling[44]] that
complaints, petitions, answers, and similar pleadings should specify
the amount of damages being prayed for not only in the body of the
pleading but also in the prayer, has not been altered. What has been
revised is the rule that subsequent amendment of the complaint or
similar pleading will not thereby vest jurisdiction in the Court, much
less the payment of the docket fee based on the amount sought in the
amended pleading, the trial court now being authorized to  allow
payment of the fee within a reasonable time  but in no case beyond
the applicable prescriptive period or reglementary period. Moreover, a
new rule has been added, governing the awards of claims not specified
in the pleading i.e., damages arising after the filing of the complaint or
similar pleading as to which the additional filing fee therefore shall
constitute a lien on the judgment.
 
Now, under the Rules of Court, docket or filing fees are
assessed on the basis of the sum claimed, on the one hand, or the value
of the property in litigation or the value of the estate, on the other. . .
 
Where the action is purely for the recovery of money or
damages, the docket fees are assessed on the basis of the aggregate
amount claimed, exclusive only of interests and costs. In this case, the
complaint or similar pleading should, according to Circular No. 7 of
this Court, specify the amount of damages being prayed for not only in
the body of the pleading but also in the prayer, and said damages shall
be considered in the assessment of filing fees in any case.
 
Two situations may arise. One is where the complaint or
similar pleading sets out a claim purely for money and damages and
there is no statement of the amounts being claimed. In this event the
rule is that the pleading will not be accepted nor admitted, or shall
otherwise be expunged from the record. In other words, the complaint
or pleading may be dismissed, or the claims as to which amounts are
unspecified may be expunged, although as aforestated the Court may,
on motion, permit amendment of the complaint and payment of the
fees provided the claim has not in the meantime become time-
barred. The other is where the pleading does specify the amount of
every claim, but the fees paid are insufficient; and here again, the rule
now is that the court may allow a reasonable time for the payment of
the prescribed fees, or the balance thereof, and upon such payment,
the defect is cured and the court may properly take cognizance of the
action, unless in the meantime prescription has set in and
consequently barred the right of action. [45] (Emphasis and
underscoring supplied)
 
Indeed, Pyramid captioned its complaint as one for specific performance and
damages even if it was, as the allegations in its body showed, seeking in the main the
collection of its claims-sums of money representing losses the amount of which it, by its
own admission, knew.[46] And, indeed, it failed to specify in its prayer in the complaint the
amount of its claims/damages.
 
When Pyramid amended its complaint, it still did not specify, in its prayer, the
amount of claims/damages it was seeking. In fact it has the audacity to inform this Court,
in its Comment on the present Petition, that
 
x x x In the natural order of things, when a litigant is given
the opportunity to spend less for a docket fee after submitting his
pleading for assessment by the Office of the Clerk of Court, he would
not decline it inasmuch as to request for a higher assessment under
 the circumstances [for such] is against his interest and would be
senseless. Placed under the same situation, petitioner[s] would
certainly do likewise. To say otherwise would certainly be dishonest,
[47]
 
which comment drew petitioners to conclude as follows:
 
[This] only shows respondents dishonesty and lack of regard
of the rules. Following this line of reasoning, respondent would do
everything if only for it to spend less for the filing fee, even to the
extent of circumventing and defying the rule on the payment of the
filing fee.
 
In spite of the fact that the respondent was already caught in
the quagmire of its own cobweb of deception, it further justified its
unethical act by ratiocinating that placed under the same situation,
petitioner would certainly do likewise, to say otherwise would certainly
be dishonest. This attitude of the respondent is very
alarming! Having been caught red-handed, the honorable thing that
respondent should have done is admit its own violation rather than
justify an act which it knows is a clear contravention of the rules and
jurisprudence.[48] (Italics and emphasis in the original)
 
 
Pyramids following justification for omitting to specify in the prayer of its
complaint the amount of its claims/damages, viz:
 
x x x x
x x x While respondent knew its losses and alleged them in
the body of the Complaint, it was not aware of the extent of
petitioners respective liability under the two insurance policies. The
allegation of respondents losses, albeit, without repeating them in its
prayer for relief was not motivated by an intention to mislead, cheat or
defraud the Court. It just left the matter of liability arising from two
separate and distinct Insurance Policies covering the same insurable
risk for the trial courts determination, hence, respondent came up
with an action for specific performance[,] [49] (Emphasis and
underscoring supplied)
 
 
fails to impress.
 
As the salient allegations of Pyramids complaint show and as priorly stated, they
constitute, in the main, an action for collection of its claims it admittedly knew.
Assuming arguendo that Pyramid has other claims the amounts of which are yet
to be determined by the trial court, the rule established in Manchester which was
embodied in this Courts Circular No. 7-88 issued on March 24, 1988, as modified by
the Sun Insurance ruling, still applies. Consider this Courts pronouncement bearing on the
matter in Ayala Corporation v. Madayag:[50]
x x x x
Apparently, the trial court misinterpreted paragraph 3 of the
[Sun Insurance] ruling of this Court wherein it stated that where the
judgment awards a claim not specified in the pleading, or if specified,
the same has been left for the determination of the court, the
additional filing fee therefor shall constitute a lien on the judgment  by
considering it to mean that where in the body and prayer of the
complaint there is a prayer xxx the amount of which is left to the
discretion of the Court, there is no need to specify the amount being
sought, and that any award thereafter shall constitute a lien on the
judgment.
 
x x x While it is true that the determination of certain
damages x x x 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. (Emphasis
and underscoring supplied)
 
If respondent Pyramids counsel had only been forthright in drafting the
complaint and taking the cudgels for his client and the trial judge assiduous in applying
Circular No. 7 vis  a  vis prevailing jurisprudence, the precious time of this Court, as well as
of that of the appellate court, would not have been unnecessarily sapped.
 
The Court at this juncture thus reminds Pyramids counsel to observe Canon 12
of the Code of Professional Ethics which enjoins a lawyer to exert every effort and
consider it his duty to assist in the speedy and efficient administration of justice, and Rule
12.04 of the same Canon which enjoins a lawyer not [to] unduly delay a case, impede the
execution of a judgment or misuse court processes. And the Court reminds too the trial
judge to bear in mind that the nature of an action is determined by the allegations of the
pleadings[51] and to keep abreast of all laws and prevailing jurisprudence, consistent with
the standard that magistrates must be the embodiments of competence, integrity and
independence.[52]
 
WHEREFORE, in light of the foregoing discussions, the petition is DENIED.
SO ORDERED.

METROPOLITAN BANK AND TRUST CO.
and SOLIDBANK CORPORATION,
Petitioners,
 
 
 
- versus
  LEONARDO-DE CASTRO,
  BERSAMIN, and
BERNARDITA H. PEREZ, represented by VILLARAMA, JR., JJ.
her Attorney-in-Fact PATRIA H. PEREZ,  
Respondent.  
Promulgated:
February 5, 2010
x-----------------------------------------------------------------------------------------x
DECISION
CARPIO MORALES, J.
On September 17, 1997, petitioner Solidbank Corporation (Solidbank) forged a lease
contract with Bernardita H. Perez (respondent), represented by her attorney-in-fact
Patria H. Perez[1], over two parcels of land located in Sta. Maria, Bulacan for a period of 15
years commencing on January 1, 1998. Solidbank was to, as it did, construct a one-storey
building specifically suited for bank premises.
Solidbank was later acquired by its co-petitioner Metropolitan Bank and Trust Company
(Metrobank), the latter as the surviving entity.
On September 24, 2002, Metrobank sent a notice of termination of the lease contract
effective September 30, 2002.[2] Respondent, objecting to the termination, filed a
complaint for breach of contract and damages against herein petitioners Solidbank and
Metrobank before the Regional Trial Court (RTC) of Malolos, Bulacan praying that, inter
alia, herein petitioners be ordered to pay her the would be unrealized income for the
ensuing idle months of the said building. [3]
Metrobank asserted in its Answer with Counterclaim, however, that the lease contract did
not prohibit pre-termination by the parties.
After respondent rested her case, Metrobank was, by Order of January 12, 2006, declared
to have waived its right to present evidence after its counsel incurred several unexcused
absences.
  By Decision of April 5, 2006, Branch 22 of the Malolos RTC ruled in favor of
G.R. No. 181842 respondent, disposing as follows:
   
Present: WHEREFORE, IN VIEW OF THE FOREGOING,
  judgment is hereby rendered in favor of the
PUNO, C.J., Chairperson, plaintiff and against the defendants ordering the
CARPIO MORALES, latter, jointly and severally:
  
 
1.      To pay the plaintiff the amount of P212,322.60
as unrealized income before the filing of the
case (Sept. 2002 to Feb. 2003);
2.      To pay the plaintiff the amount
of P2,013,753.03 as unrealized (income) after
the filing of the case up to present (March 2003
to March 2006);
3.      To pay the plaintiff the would be  unrealized
income for the ensuing idle months  of said
building amounting to P7,126,494.30
(covering April 2006 until expiration of the
contract of lease);
4.      To pay plaintiff the amount of P200,000.00 as
moral damages;
5.      To pay plaintiff the amount of P100,000.00 as
exemplary damages;
6.      To pay plaintiff the amount of P100,000.00 as
attorneys fees and
7.      To pay plaintiff as litigation expenses.
 
SO ORDERED.[4] (emphasis and underscoring
supplied)
On appeal, Metrobank challenged, in the main, the trial courts award of unrealized
income for the ensuing idle months despite respondents failure to pay docket fees
thereon to thus render the complaint dismissible for lack of jurisdiction.
By Decision[5] of November 23, 2007, the appellate court affirmed  that of the trial
court[6] and denied, by Resolution of February 21, 2008, a reconsideration thereof. Hence,
the present petition for review on certiorari.
In her Comment, respondent admitted that the filing fees she paid did not cover her
prayer for unrealized income for the ensuing idle months, for at the time of filing and
payment[,] the period that the building would be idle could not yet be determined.[7]
 
In sustaining respondents justification for nonpayment of additional docket fees, the
appellate court held:
For one, plaintiff-appellee Perez could not have been
certain at the time she filed the Complaint that defendant-appellant
Metrobank would no longer return  to the Leased Property. It would
have been speculative therefore on the part of plaintiff-appellee Perez
to allege in her Complaint any unrealized income for the remaining
period of the Lease Contract considering that the possibility of
defendant-appellant Metrobank reconsidering its decision to
terminate the said Lease Contract and returning to the Leased
Property at some future time was not definitively foreclosed when the
Complaint was filed. In light of her predicament,
plaintiff-appellee Perez was thus justified in just making a general
prayer for the court a quo to award unrealized income for the ensuing
idle months of the Leased Property.[8] (italics in the original;
underscoring supplied)
 
 
The petition is partly meritorious.
 
In Manchester Development Corporation v. Court of Appeals,[9] the Court held that a
pleading which does not specify in the prayer the amount sought shall not be admitted or
shall be expunged, and that a court acquires jurisdiction only upon payment of the
prescribed docket fee. This rule was relaxed in Sun Insurance Office, Ltd. v.
Asuncion[10]which was echoed in the 2005 case of Heirs of Bertuldo Hinog v. Melico, the
pertinent portion of the decision in the latter case reads:
 
Plainly, while the payment of 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.[11] (emphasis and underscoring supplied)
Metrobank takes exception to the application of Sun Insurance Office to the present case
because, by its claim, respondent deliberately concealed the insufficient payment of
docket fees.
Metrobanks position fails. The ensuing months in which the leased premises would be
rendered vacant could not be determined at the time of the filing of the complaint.  It
bears recalling that the building constructed on respondents leased premises was
specifically constructed to house a bank, hence, the idle period before another occupant
with like business may opt to lease would be difficult to project.
On Metrobanks raising the issue of lack of jurisdiction over the complaint for respondents
failure to pay the correct docket fees, apropos is the ruling in National Steel Corporation v.
Court of Appeals:  [12]
 
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 before the expiration
of the applicable prescriptive 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 the appropriate
docket fees and the amount actually paid by the plaintiff will be
considered a lien on any award he may obtain in his favor.
[13]
 (emphasis and underscoring supplied)
   
   
  there is no showing that she submitted any documentary evidence in support thereof.
Metrobank raised the issue of jurisdiction only before the appellate court after it and its WHEREFORE, the petition is in part GRANTED. The November 23, 2007 Decision of the
co-petitioner participated in the proceedings before the trial court. While lack of Court of Appeals is MODIFIED. The Clerk of Court of the Regional Trial Court of Malolos,
jurisdiction may be raised at any time, a party may be held in estoppel if, as in the present Bulacan is ordered to reassess, determine and collect additional fees that should be paid
case, it has actively taken part in the proceedings being questioned. by respondent within fifteen (15) days, in accordance with the foregoing discussion of the
  Court, provided the applicable prescriptive or reglementary period has not 
The foregoing disposition notwithstanding, respondent is liable for the balance between
the actual fees paid and the correct payable filing fees to include an assessment on the yet expired, which additional fees shall constitute a lien on the judgment in satisfaction of
award of unrealized income, following Section 2 of Rule 141 which provides: said lien. The award of moral and exemplary damages and attorneys fees is DELETED.
   
SEC. 2. Fees in lien. Where the court in its final In all other respects, the appellate courts Decision is AFFIRMED.
judgment awards a claim not alleged, or a relief different  
from, or more than that claimed in the pleading, the party SO ORDERED.
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 fee
(underscoring supplied),
 
and jurisprudence, viz:
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.[14] (emphasis and underscoring
supplied)
 
 
 
A word on the grant of moral and exemplary damages and attorneys fees.
 
The Court notes that respondents witness-attorney-in-fact testified only on the existence
of the lease agreement and unrealized income due to pre-termination.  Since an award of
moral damages is predicated on a categorical showing from the claimant that emotional
and mental sufferings were actually experienced, absent any evidence thereon in the
present case,[15] the award must be disallowed. And so too must the award of attorneys
fees, absent an indication in the trial courts Decision of the factual basis thereof, the
award having been merely stated in the dispositive portion. [16] Parenthetically, while
respondent prayed in her complaint for the award of attorneys fees and testified during
the trial that:
 
Q: Now, in connection with the filing of this case and hiring your
lawyer, do you have agreement with your counsel with
respect to attorneys fees?
A: P100,000.00 acceptance fees.
 
Q: What about appearance fees?
A: I forgot already, sir.,[17]
   CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
   
E.B. VILLAROSA & PARTNERS CO., LTD., Promulgated:
Respondent.  
July 27, 2007
x---------------------------------------------------x
 
DECISION
 

QUISUMBING,  J.:

For review on certiorari are the Decision [1] dated October 24, 2002 and the
Resolution[2] dated August 25, 2003 of the Court of Appeals in CA-G.R. SP No. 52897,
which had affirmed the November 19, 1998[3] and March 24, 1999[4] Orders of the
Regional Trial Court of Makati City, Branch 58, in Civil Case No. 98-1342.

The pertinent facts, borne by the records, are as follows.

Petitioner Fluor Daniel, Inc.-Philippines is a domestic corporation providing

construction and program management services. Sometime in 1996, petitioner entered
into an agreement with Fil-Estate Properties, Inc. (Fil-Estate) for the construction of the
Fairways & Bluewater, Newcoast Island Resort in Boracay Island. Respondent E.B.
Villarosa & Partners Co., Ltd. was one of the contractors engaged by petitioner to provide
services for the said project.

On May 6, 1997, petitioner and respondent executed a separate contract for civil
structure and architecture, for plumbing and fire protection, and for millworks.  However,
Fil-Estate failed to satisfy petitioners monthly progress billing. Hence, petitioner did not
pay respondent.

Petitioner apprised Fil-Estate that the project would have to be

suspended. Petitioner likewise issued a notice of suspension of work to all its contractors,
including respondent. In response, respondent informed petitioner that it deemed the
contracts between them good as terminated. Thus, respondent demanded payment for
FLUOR DANIEL, INC.-PHILIPPINES, G.R. No. 159648 suspension cost and for work so far performed.
Petitioner,
  Present:
Believing that petitioner was in bad faith, respondent also filed with the
   
Regional Trial Court of Makati City, Branch 58, a complaint [5] for a sum of money and
  QUISUMBING, J., Chairperson,
damages, docketed as Civil Case No. 98-1342.
- versus - CARPIO,
 Petitioner filed a motion to dismiss [6] on the ground that the complaint failed to
state a cause of action. The trial court denied the motion in its first assailed Order, to wit:
WHEREFORE, foregoing considered, defendants motion to
dismiss is hereby DENIED.
Pursuant to Section 4 of Rule 16, 1997 Rules of Civil
Procedure, defendant-movant shall file its answer within the balance
of the period prescribed by Rule 11, same Rules, to which defendant
was entitled at the time of serving its motion, but not less than five (5)
days in any event, computed from receipt of this order.
SO ORDERED.[7]
Petitioners motion for reconsideration was likewise denied in the trial courts
second impugned Order, thus:
WHEREFORE, foregoing considered, defendants Motion for
Reconsideration is hereby DENIED.
The filing of the last pleading and the consequent joinder of
issues has ripened this case for pre-trial which is hereby set
Let notices of pre-trial be sent to the parties and their
counsel.
SO ORDERED.[8]
Respondent subsequently filed a motion to amend its complaint followed by its
amended complaint. Petitioner, on the other hand, filed a motion to suspend
proceedings. The trial court granted respondents, but denied petitioners motion, to wit:
WHEREFORE, in view of the foregoing:
1)              Plaintiffs Urgent Motion to Amend Complaint With Leave of
Court is hereby GRANTED. Accordingly, plaintiffs Amended
Complaint filed on May 07, 1999 is hereby admitted in lieu of
the original complaint which is hereby deemed withdrawn for
all intents and purposes. Consequently, defendant is given
fifteen (15) days after receipt of this Order within which to file
its Amended Answer to plaintiffs Amended Complaint.
2)              Defendants Motion to Suspend Proceedings is hereby
DENIED.
SO ORDERED.[9]
Petitioner filed with the Court of Appeals a special civil action for certiorari
assailing the November 19, 1998 and March 24, 1999 Orders of the court a quo and
praying for a temporary restraining order and/or writ of preliminary injunction. The
appellate court decreed:
WHEREFORE, the Order dated 19 November 1998 issued by
the Regional Trial Court of Makati, Branch 58 in Civil Case No. 98-1342
entitled E.B. Villarosa & Partners Co., Inc. vs. Fluor Daniel,
Inc. Philippines denying petitioners Motion To Dismiss as well as its
order of 24 March 1999 denying reconsideration thereof, are
both affirmed.
Accordingly, the temporary restraining order issued by the
Ninth Division of this Court as contained in Resolution dated 25 May
2000 is hereby lifted.
Costs against petitioner.
SO ORDERED.[10]
Hence, the instant petition, raising the following issues:
I.
WHETHER OR NOT THE COMPLAINT SUFFICIENTLY STATES A CAUSE
OF ACTION AGAINST FDIP [PETITIONER] IN LIGHT OF THE
JURISPRUDENTIAL TESTS AND GUIDELINES LAID DOWN BY THIS
HONORABLE COURT.
II.
WHETHER OR NOT THE ANNEXES ATTACHED TO THE COMPLAINT
SHOULD BE CONSIDERED IN DETERMINING WHETHER OR NOT
VILLAROSAS [RESPONDENTS] COMPLAINT SUFFICIENTLY STATED A
CAUSE OF ACTION AGAINST FDIP IN LIGHT OF JURISPRUDENTIAL
TESTS AND GUIDELINES LAID DOWN BY THIS HONORABLE COURT.
III.
WHETHER OR NOT THE COURT OF APPEALS, IN REFUSING TO
CONSIDER THE ANNEXES TO THE COMPLAINT, ERRED IN FAILING TO
APPRECIATE THE CLEAR ADMISSION OF VILLAROSA [RESPONDENT]
THAT PAYMENT OF ITS BILLINGS WAS SUBJECT TO THE CONDITION
OF TIMELY RECEIPT OF SIMILAR PAYMENTS FROM FIL-ESTATE.
 IV.
WHETHER OR NOT THE COURT OF APPEALS, IN REFUSING TO
CONSIDER THE ANNEXES TO THE COMPLAINT, FAILED TO
APPRECIATE THE SIGNIFICANCE OF VILLAROSAS [RESPONDENTS]
FAILURE TO SATISFY THE REQUIRED CRITERIA TO JUSTIFY
PAYMENT UNDER ITS MONTHLY PROGRESS BILLINGS.[11]
Petitioner contends that the complaint utterly and miserably failed to state the
operative facts which would give rise to a cause of action against it. Petitioner insists that
the annexes attached to respondents complaint and other pleadings should be considered
in determining respondents cause of action, or lack of it, against petitioner. Petitioner
maintains that the Court of Appeals committed manifest error when it refused to consider
the annexes to the complaint, showing respondents admission that payment of its billings
was subject to the condition of timely receipt of similar payments from petitioner.
Respondent, however, counters that its complaint sufficiently stated a cause of
action against petitioner and that the annexes attached to the complaint bear no
relevance, not having been admitted by stipulation. Respondent asserts that the three
elements of a cause of action are all present in this case, namely: (i) legal right of
respondent to demand payment from petitioner; (ii) obligation of petitioner to pay
respondent; and (iii) failure of petitioner to pay respondent. Respondent stresses that
petitioner cannot evade its liability to pay by claiming that payments to respondent are
subject to timely receipt of similar payments from Fil-Estate.
The petition is impressed with merit.
Section 2, Rule 2 of the Rules of Civil Procedure provides:
SEC. 2. Cause of action, defined. A cause of action is the act or
omission by which a party violates a right of another.
The essential elements of a cause of action are as follows: 1) A right in favor of
the plaintiff by whatever means and under whatever law it arises or is created; 2) An
obligation on the part of the defendant not to violate such right; and 3) An act or omission
on the part of the defendant in violation of the right of the plaintiff or constituting a
breach of the obligation of the defendant to the plaintiff for which the latter may maintain
an action for recovery of damages or other relief. [12]
It is, thus, only upon the occurrence of the last element that a cause of action
arises, giving the plaintiff a right to file an action in court for recovery of damages or
other relief.[13] The test of sufficiency of facts alleged in the complaint as constituting a
cause of action is whether or not admitting the facts alleged, the court could render a
valid verdict in accordance with the prayer of the complaint. [14] That in determining
sufficiency of cause of action, the court takes into account only the material allegations of
the complaint and no other, is not a hard and fast rule. In some cases, the court considers
the documents attached to the complaint to truly determine sufficiency of cause of action.
[15]
We have ruled that a complaint should not be dismissed for insufficiency of
cause of action if it appears clearly from the complaint and its attachments that the
plaintiff is entitled to relief. [16] The converse is also true. The complaint may be dismissed
for lack of cause of action if it is obvious from the complaint and its annexes that the
plaintiff is not entitled to any relief.
In this case, we note that annexed to the subject complaint are the three
contracts governing the rights and obligations between petitioner and respondent,
namely the contract for civil structure and architecture, the contract for plumbing and
fire protection, and the contract for millworks. Records show that recurring in each of the
said contracts is the provision that payment by petitioner shall be subject to its timely
receipt of similar payments from Fil-Estate. The said provision, found in each of the
aforesaid contracts, is quoted below:
2.0 PRICING BASIS
The Contract Price set forth herein is firm for the duration of the Work
and includes all Contractors costs, expenses, overhead and profit for
complete performance of the Work.
xxxx
Payment of the billings shall be subject to the timely receipt of
similar payments from the client by Fluor Daniel. Any prolonged
delay in payment by Fluor Daniel is subject to a suspension of
activities by EBV within five (5) work days after proper written notice
is provided by contractor to Fluor Daniel. [17] (Emphasis supplied.)
On their face, the said attached contracts, which define and delimit the rights
and obligations of the parties, clearly require a specific condition before petitioner may
be held liable for payment. The complaint, however, failed to state that the said condition
had been fulfilled. Without the said condition having taken place, petitioner cannot be
said to have breached its obligation to pay.
We thus hold that respondents complaint, taken with the contracts annexed to
it, failed to pass the test of sufficiency of cause of action.  Thus, the said complaint should
have been dismissed on the ground of failure to state a cause of action.
 WHEREFORE, the petition is GRANTED. The assailed Decision dated October
24, 2002 and the Resolution dated August 25, 2003 of the Court of Appeals in CA-G.R. SP
No. 52897, which affirmed the November 19, 1998 and March 24, 1999 Orders of
the Regional Trial Court of Makati City, Branch 58 in Civil Case No. 98-1342,
are REVERSED AND SET ASIDE.

Costs against respondent.

SO ORDERED.