Section 3.

Commencement of Civil actions; Payment of docket fees: The areas covered by the agreement were Baguio, Dagupan, Angeles, Bulacan,
Pampanga, Urdaneta, La Union, Tarlac and Olongapo. At the end of 1989, the
G.R. No. 150780 May 5, 2006 agreement expired and the parties executed a renewal agreement on January 22,
1990. A supplemental agreement was executed on June 27, 1990, to take effect on
NESTLE PHILIPPINES, INC., Petitioner, July 1, 1990.
vs.
FY SONS, INCORPORATED, Respondent. On July 2, 1990, petitioner fined respondent P20,000 for allegedly selling 50 cases
of Krem-Top liquid coffee creamer to Lu Hing Market, a retail outlet in Tarlac. This
DECISION was purportedly proscribed by the agreement. Respondent paid the fine. In
September 1990, Krem-Top liquid coffee creamer was sold to Augustus Bakery and
Grocery, an act again allegedly in violation of the agreement. Petitioner imposed
CORONA, J.:
a P40,000 fine which respondent refused to pay.
This is a petition for review on certiorari under Rule 45 of the Rules of Court
On October 19, 1990, respondent, through counsel, wrote petitioner to complain
assailing the decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 57299 dated
about the latter’s breaches of their agreement and the various acts of bad faith
January 11, 2001 which in turn affirmed with modification the decision of Branch 57
committed by petitioner against respondent. Respondent demanded the payment
of the Regional Trial Court (RTC) of Makati City in Civil Case No. 90-3169,2 as well as
of damages. In turn, on November 5, 1990, petitioner sent respondent a demand
the CA’s resolution3 dated November 14, 2001 which denied petitioner’s motion
letter and notice of termination, alleging that the latter had outstanding accounts
for reconsideration.
of P995,319.81. When the alleged accounts were not settled, petitioner applied
the P500,000 time deposit as partial payment.
The antecedent facts follow.
Respondent filed a complaint for damages against petitioner, alleging bad
Petitioner is a corporation engaged in the manufacture and distribution of all Nestle
faith.4 According to respondent:
products nationwide. Respondent, on the other hand, is a corporation engaged in
trading, marketing, selling and distributing food items to restaurants and food
… [petitioner] made representations and promises of rendering support, including
service outlets. On December 23, 1998, petitioner and respondent entered into a
marketing support, assignment of representatives by way of assistance in its
distributorship agreement (agreement) whereby petitioner would supply its
development efforts, and assurances of income in a marketing area not previously
products for respondent to distribute to its food service outlets. A deed of
developed. Thus, [respondent] was lured into executing a distributorship agreement
assignment was also executed by respondent in favor of petitioner on December 13,
with the [petitioner]…. [Respondent] thereby invested huge sums of money, time
1988, assigning the time deposit of a certain Calixto Laureano in the amount
and efforts to abide by such distributorship agreement, and to develop market
of P500,000 to secure respondent’s credit purchases from petitioner. A special
areas for [petitioner’s] products. Thereafter, the [petitioner] breached the
power of attorney was likewise executed by Laureano authorizing the respondent
distributorship agreement by committing various acts of bad faith such as: failing to
to use the time deposit as collateral.
provide promotional support; deliberately failing to promptly supply the
[respondent] with the stocks for its orders; intentionally diminishing the The plaintiff however, is hereby ordered to pay the defendant the amount
[respondent’s] sales by supporting a non-distributor; and concocting falsified of P53,214,26 (sic) which amount has been established as the amount the
charges to cause the termination of the distributorship agreement without just defendant is entitled from the plaintiff.
cause. By such termination, [petitioner] would be able to obtain the market gains
made by [respondent] at the latter’s own efforts and expenses. When [respondent] Three-fourths costs against the defendant.
complained to [petitioner] about the latter’s acts of bad faith, the latter terminated
the agreement on the allegation that [respondent] did not pay its accounts. .
[Petitioner] also seized [respondent’s] time deposit collateral without basis;
penalized [respondent] with monetary penalty for the concocted charge; and
SO ORDERED.6
unilaterally suspended the supply of stocks to [respondent].5
Petitioner appealed the decision to the CA. On January 11, 2001, the CA rendered a
Respondent sought actual damages of P1,000,000, moral damages of P200,000,
decision affirming the RTC’s decision with modification:
exemplary damages of P100,000, attorney’s fees of P100,000, plus the return of
the P500,000 time deposit and costs of suit. In its answer, petitioner interposed a
WHEREFORE, the judgment appealed from is AFFIRMED with the following
counterclaim for P495,319.81 representing the balance of respondent’s overdue
MODIFICATIONS: (1) the actual damages is INCREASED from P1,000,000.00
accounts, with interest of 2% per month from the date of default until fully paid,
to P1,500,000.00;7 and (2) the amount of P53,214.26 payable by the appellee to the
moral damages of P100,000, exemplary damages of P200,000, attorney’s fees
appellant is DELETED.
of P120,000 and costs of suit.

SO ORDERED.8
In a decision dated November 10, 1997, the Makati City RTC ruled in favor of the
respondent:
Both the CA and the RTC found, among others, that petitioner indeed failed to
provide support to respondent, its distributor; that petitioner unjustifiably refused
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
to deliver stocks to respondent; that the imposition of the P20,000 fine was void for
plaintiff and against the defendant ordering the defendant to pay plaintiff the
having no basis; that petitioner failed to prove respondent’s alleged outstanding
following:
obligation; that petitioner terminated the agreement without sufficient basis in law
or equity and in bad faith; and that petitioner should be held liable for damages.
1. The amount of P1,000,000.00 as actual damages sustained by the plaintiff by
reason of the unwarranted and illegal acts of the defendant in terminating the
Hence this petition raising the following grounds:
distributorship agreement;

2. The amount of P100,000.00 as exemplary damages; (1)

3. The amount of P100,000.00 as attorney’s fees;

THE [CA] COMMITTED A GRAVE ERROR IN LAW WHEN IT RULED
THAT: "THE RATIOCINATIONS OF THE APPELLANT AS TO THE
APPELLEE’S ALLEGED VIOLATION OF THE CONTRACT ARE THUS
WEAK AND UNCONVINCING" AND "THE APPELLEE’S ALLEGED
NON-PAYMENT AND OUTSTANDING BALANCE OF P995,319.81
WAS NOT SUFFICIENTLY PROVEN" DESPITE THE FACT THAT
FLORENTINO YUE, JR., THE MANAGER OF THE RESPONDENT
ADMITTED IN OPEN COURT IN ANSWER TO THE QUESTION OF
THEN PRESIDING JUDGE PHINNY C. ARAQUIL THAT THE
DISTRIBUTORSHIP AGREEMENT WAS TERMINATED BY YOUR
PETITIONER BECAUSE OF THE UNPAID BALANCE OF THE
RESPONDENT OF AROUND P900,000.00.
(2)
THE [CA] COMMITTED A GRAVE ERROR IN LAW IN DISREGARDING
THE TESTIMONY OF THE WITNESS FOR THE PETITIONER, CRISTINA
RAYOS WHO PREPARED THE STATEMENT OF ACCOUNT (EXHIBIT
11) ON THE GROUNDS THAT SHE WAS NOT INVOLVED IN THE
DELIVERY AS SHE WAS ONLY IN CHARGE OF THE RECORDS AND
DOCUMENTS OF ALL ACCOUNTS RECEIVABLES AS PART OF HER
DUTIES AS CREDIT AND COLLECTION MANAGER CONSIDERING
THAT THE EVIDENCE PRESENTED WAS AN EXCEPTION TO THE
HEARSAY RULE UNDER SECTION 45 (SIC), RULE 130, OF THE
REVISED RULES ON EVIDENCE.
(3)
THE [CA] COMMITTED A GRAVE ERROR IN LAW IN AWARDING TO
THE RESPONDENT ACTUAL DAMAGES IN THE AMOUNT
OF P1,000,000.00 AND ORDERING THE REFUND OF THE AMOUNT
OF P500,000.00 REPRESENTING THE TIME DEPOSIT OF THE
RESPONDENT WHICH WAS ASSIGNED AS SECURITY FOR THE
RESPONDENT’S CREDIT LINE BECAUSE THE PETITIONER HAD THE
RIGHT TO TERMINATE THE DISTRIBUTORSHIP AGREEMENT
UNDER ART. 1191 OF THE CIVIL CODE AND PARAGRAPHS 5 AND
22 OF THE DISTRIBUTORSHIP AGREEMENT BECAUSE OF THE
FAILURE OF THE RESPONDENT TO SETTLE ITS ACCOUNT IN THE
AMOUNT OF P995,319.81 AND THAT THE EVIDENCE SUBMITTED
BY THE RESPONDENT ON THE ALLEGED ACTUAL DAMAGES IT
SUSTAINED AS A RESULT OF THE TERMINATION OF THE
DISTRIBUTORSHIP AGREEMENT (EXHIBIT 5) AND COMPANION
EXHIBITS WERE MERELY SPECULATIVE AND DID NOT HAVE
PROBATIVE VALUE.
(4)
THE [CA] COMMITTED A GRAVE ERROR IN LAW FOR NOT
AWARDING TO THE PETITIONER ITS COUNTERCLAIM.9
On the first issue, petitioner asserts that respondent’s witness, Florentino Yue, Jr., a
director and officer of respondent corporation, admitted in open court that the
respondent had an unpaid obligation to petitioner in the amount of
"around P900,000."10
Respondent counters that this statement was merely in answer to the question of
the presiding judge on what ground petitioner supposedly terminated the
agreement. The witness was not being asked, nor was he addressing, the truth of
such ground. In fact, this witness later testified that "(petitioner) wrote us back
saying that they (had) terminated my contract and that I owe(d) them something
like P900,000."11
Petitioner’s argument is palpably without merit and deserves scant consideration. It
quoted Mr. Yue’s statement in isolation from the rest of his testimony and took it
out of context. Obviously, Yue’s statement cannot be considered a judicial
admission that respondent had an unpaid obligation of P900,000 and that the
agreement had been terminated for this reason.
On the second issue, petitioner argues that the CA should not have disregarded the
testimony of petitioner’s witness, Cristina Rayos, who prepared the statement of
account on the basis of the invoices and delivery orders corresponding to the
alleged overdue accounts of respondent.12 The CA ruled that petitioner was not
able to prove that respondent indeed had unpaid accounts, saying, among others,
that the testimony of Rayos constituted incompetent evidence:
xxx the appellee’s alleged non-payment and outstanding balance of P995,319.81
was not sufficiently proven.
xxx xxx xxx
Anyway, the appellant’s Statement of Account showing such alleged unpaid balance
is undated, and it does not show receipt thereof by the appellee, and when, if such
indeed was received. Moreover, there are no supporting documents to sustain such
unpaid accounts. The witness for the appellant who prepared the Statement,
Cristina Rayos, in fact admitted that the Invoices corresponding to the alleged
overdue accounts are not signed. Her explanation was that there were DO’s or
Delivery Orders covering the transactions. However, she did not identify the
signatures appearing on the Delivery Orders marked as Exhibits "13-A", "14-A",
"15-A" and "16-A" as the persons who received the goods for the appellant. In any
case, she could not have identified the same, for she was not involved in the
delivery, as she is only in charge of the records and documents on all accounts
receivables as part of her duties as Credit and Collection Manager.13
Petitioner contends that the testimony of Rayos was an exception to the hearsay
rule under Section 43, Rule 130 of the Rules of Court:14
Entries in the course of business. — Entries made at, or near the time of the
transactions to which they refer, by a person deceased, or unable to testify, who
was in a position to know the facts therein stated, may be received as prima
facie evidence, if such person made the entries in his professional capacity or in the
performance of duty and in the ordinary or regular course of business or
duty.1avvphil.net
Petitioner’s contention has no merit.
The provision does not apply to this case because it does not involve entries made
in the course of business. Rayos testified on a statement of account she prepared
on the basis of invoices and delivery orders which she, however, knew nothing
about. She had no personal knowledge of the facts on which the accounts were
based since, admittedly, she was not involved in the delivery of goods and was
merely in charge of the records and documents of all accounts receivable as part of
her duties as credit and collection manager.15 She thus knew nothing of the truth or
falsity of the facts stated in the invoices and delivery orders, i.e., whether such
deliveries were in fact made in the amounts and on the dates stated, or whether
they were actually received by respondent. She was not even the credit and
collection manager during the period the agreement was in effect.16 This can only
mean that she merely obtained these documents from another without any
personal knowledge of their contents.
The foregoing shows that Rayos was incompetent to testify on whether or not the
invoices and delivery orders turned over to her correctly reflected the details of the
deliveries made. Thus, the CA correctly disregarded her testimony.
Furthermore, the invoices and delivery orders presented by petitioner were
self-serving. Having generated these documents, petitioner could have easily
fabricated them. Petitioner’s failure to present any competent witness to identify
the signatures and other information in those invoices and delivery orders cast
doubt on their veracity.
Petitioner next argues that respondent did not deny during the trial that it received
the goods covered by the invoices and was therefore deemed to have admitted the
same.17 This argument cannot be taken seriously. From the very beginning,
respondent’s position was that petitioner concocted falsified charges of
non-payment to justify the termination of their agreement. 18 In no way could
respondent be deemed to have admitted those deliveries.
On the third issue, petitioner questions the award of actual damages in the amount
of P1,000,000 and the refund of the P500,000 time deposit, contending that it
validly terminated the agreement because of respondent’s failure to pay its
overdue accounts.
As discussed above, the CA declared that petitioner was not able to prove that
respondent had unpaid accounts, thus debunking the claim of a valid termination.
The CA also held petitioner guilty of various acts which violated the provisions of the
agreement.19 Consequently, for petitioner’s breach of the agreement, the CA
awarded actual damages to respondent in the amount of P1,000,000. Petitioner,
other than claiming that it validly terminated the agreement, did not challenge the
findings of the CA that it committed various violations of the agreement. Hence,
there was legal basis for the grant of actual damages.
Petitioner asserts that the documentary evidence presented by respondent to
prove actual damages in the amount of P4,246,015.60 should not have been
considered because respondent’s complaint only prayed for an award
of P1,000,000. It further contends that the court acquires jurisdiction over the claim
only upon payment of the prescribed docket fee.20
Indeed, a court acquires jurisdiction over the claim of damages upon payment of
the correct docket fees.21 In this case, it is not disputed that respondent paid docket
fees based on the amounts prayed for in its complaint. Respondent adduced
evidence to prove its losses. It was proper for the CA and the RTC to consider this
evidence and award the sum of P1,000,000. Had the courts below awarded a sum
more than P1,000,000, which was the amount prayed for, an additional filing fee
would have been assessed and imposed as a lien on the judgment.22However, the
courts limited their award to the amount prayed for.
Both the RTC and CA found that respondent had satisfactorily proven the factual
bases for the damages adjudged against the petitioner. This is a factual matter
binding and conclusive upon this Court.23 It is well-settled that –
. . . findings of fact of the trial court, when affirmed by the Court of Appeals, are
binding upon the Supreme Court. This rule may be disregarded only when the
findings of fact of the Court of Appeals are contrary to the findings and conclusions
of the trial court, or are not supported by the evidence on record. But there is no
ground to apply this exception to the instant case. This Court will not assess all over
again the evidence adduced by the parties particularly where as in this case the
findings of both the trial court and the Court of Appeals completely coincide.24
Likewise, the determination of the amount of damages commensurate with the
factual findings upon which it is based is primarily the task of the trial
court.25 Considering that the amount adjudged is not excessive, we affirm its
correctness.
Moreover, given that petitioner was not able to prove that respondent had unpaid
accounts in the amount of P995,319.81, the seizure of the P500,000 time deposit
was improper. As a result, the refund of this amount with interest is also called for.
Finally, petitioner’s counterclaims are necessarily without merit. It failed to prove
the alleged outstanding accounts of respondent. Accordingly, it is not entitled to the
supposed unpaid balance of P495,319.81 with interest.
Petitioner, being at fault and in bad faith, and there being no proof that respondent
was guilty of any wrongdoing, cannot claim moral and exemplary damages and
attorney’s fees from respondent.
In fine, we find no error in the assailed decision and resolution of the CA. We
therefore affirm them.
WHEREFORE, the petition is hereby DENIED for lack of merit. The decision of the
Court of Appeals dated January 11, 2001 and resolution dated November 14, 2001
in CA-G.R. CV No. 57299 are hereby AFFIRMED.
Costs against petitioner.
SO ORDERED.
FIRST DIVISION
[G.R. No. 131127. June 8, 2000]
ALFONSO T. YUCHENGCO, petitioner, vs. REPUBLIC OF THE PHILIPPINES,
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, ESTATE OF FERDINAND E.
MARCOS, PRIME HOLDINGS, INC. ESTATE OF RAMON U. COJUANGCO AND IMELDA O.
COJUANGCO, respondents. batas
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review to set aside the Resolution of the Sandiganbayan dated
October 9, 1996[1] dismissing petitioners Amended-complaint-in-intervention and
the subsequent Resolution dated October 6, 1997[2] denying petitioners motion for
reconsideration.
The issue in this petition is whether or not, under the undisputed circumstances at
bar, the Sandiganbayan may dismiss the complaint-in-intervention for alleged
failure to pay the correct amount of docket fees on time.
On July 16, 1987, the Republic of the Philippines (hereinafter, the Republic) filed
with the Sandiganbayan a complaint for Rescission, Reconveyance, Restitution,
Accounting and Damages against Ferdinand E. Marcos, Imelda Marcos and Prime
Holdings, Inc. (hereinafter, PHI), docketed as Civil Case No. 0002. Alleging
ownership of the properties of the Marcoses sought to be forfeited by the Republic,
petitioner Yuchengco filed a motion for intervention and complaint-in-intervention
on August 11, 1988, impleading the Republic, the Presidential Commission on Good
Government (PCGG), Ferdinand E. Marcos, Imelda Marcos and PHI as
defendants-in-intervention.[3] Petitioner paid a docket fee of P400.00.
On February 17, 1989, the Sandiganbayan issued a Resolution granting the motion
for intervention and admitting the complaint-in-intervention.[4] The Republic filed a
motion for reconsideration on March 14, 1989, which petitioner opposed.
On February 9, 1990, the Sandiganbayan denied the Republics motion for
reconsideration.[5] Hence, the Republic and the PCGG, on behalf of PHI, filed an
answer to the complaint-in-intervention dated June 19, 1990 and November 2,
1990, respectively.
Meanwhile, PHI filed a Manifestation and Motion, stating that Imelda Cojuangco
and the Estate of Ramon U. Cojuangco claim ownership of PHI. Thus, on May 31,
1993, petitioner moved for leave to admit amended complaint-in-intervention to
implead the said claimants.[6] hustisya
On June 11, 1993, the Sandiganbayan, in open court, admitted the amended
complaint-in-intervention.[7] Consequently, amended answers-in-intervention were
filed by the Republic and the PHI on July 2, 1993.
On the other hand, the Estate of Ramon Cojuangco and Imelda O. Cojuangco 3.....P40,000.00 or more but less than
(hereinafter, the Cojuangcos) filed a motion to dismiss[8] the amended P60,000.00 ------------------- 200.00
complaint-in-intervention, dated August 25, 1993, on the ground of failure to state
a cause of action and lack of jurisdiction of the Sandiganbayan over the case, 4.....P60,000.00 or more but less than
inasmuch as petitioner did not pay the correct docket fees. They argued that the P80,000.00 ------------------- 250.00
amended-complaint-in-intervention failed to state the amount of the claim or the
value of the property subject of the complaint, in violation of the doctrine laid down 5.....P80,000.00 or more but less than
in Manchester Development Corporation, et al. v. Court of Appeals.[9] P100,000.00 ------------------- 400.00 Esmmis

On September 6, 1993, petitioner filed a second amended 6.....P100,000.00 or more but less than
complaint-in-intervention with motion for leave. Later, on September 28, 1993, he P150,000.00 ----------------- 600.00
also opposed the motion to dismiss filed by PHI and the Cojuangcos on September
28, 1993.[10]
7.....For each P1,000.00 in excess of
P150,000.00 --------------------- 5.00
PHI and the Cojuangcos filed a reply[11] alleging that since the amended
complaint-in-intervention is substantially an action for the recovery of ownership
Further, respondents PHI and the Cojuangcos contend that as the action seeks to
and possession of shareholdings in the Philippine Telecommunications Investment
litigate the ownership and disposition of properties consisting of subject shares, the
Corporation (PTIC), Section 7 (a) of Rule 141 of the Rules of Court applies, to wit:
amount of docket fees must be based on the total value of the same.

Sec. 7..... Clerks of Regional Trial Courts. ---

(a)....For filing an action or a permissive counter-claim or money
claim against an estate not based on judgment, or for filing with
leave of court a third-party, fourth-party, etc. complaint, or a
complaint in intervention xxx if xxx the stated value of the
property in litigation is:
Petitioner filed a rejoinder[12] dated November 29, 1993, maintaining that no docket
fees are payable to the Sandiganbayan, pursuant to Section 11 of Presidential
Decree No. 1606, as amended, which provides:
Proceedings free of charge. --- All proceedings in the
Sandiganbayan shall be conducted at no cost to the complainant
and/or his witnesses.

1.....Not more than P20,000.00

----------------------------------------- P120.00
2.....More than P20,000.00 but less than
P40,000.00 ---------------- 150.00
In their sur-rejoinder filed on January 28, 1994,[13] respondents PHI and the
Cojuangcos countered that the reason for the above-quoted Section 11 of P.D. 1606
is that the jurisdiction of the Sandiganbayan at the time of its enactment was
limited to criminal actions. With the expansion of the Sandiganbayans jurisdiction to
include civil cases, the payment of docket fees has become a jurisdictional
requirement.
On February 8, 1994[14], petitioner replied that the Sandiganbayan has no power or
discretion to ignore or amend the provision in Section 11 of P.D. 1606 simply on the
basis of public policy. Petitioner points out that Executive Order No. 14 issued by
President Corazon C. Aquino did not amend the said provision, hence, payment of
docket fees in the Sandiganbayan is legally without basis.
On September 21, 1994, petitioner re-filed his second amended
complaint-in-intervention[15] with motion to admit, wherein he sought to include Y
Realty Corporation as co-plaintiff-in-intervention and to join Imelda R. Marcos as
the representative of the Estate of Ferdinand Marcos.
On October 11, 1994, PHI and the Cojuangcos opposed the motion to admit second
amended complaint-in-intervention,[16] contending that jurisdictional issues should
first be resolved before the most recent motion is considered.Percuriam
A motion for early resolution[17] was filed by petitioner on October 27, 1994. He
averred that since the main issues in the motion to dismiss filed by PHI and the
Cojuangcos dwell on payment of docket fees and the amount thereof, which may
possibly involve the jurisdiction of the Sandiganbayan, and it is unclear whether the
filing of the complaint-in-intervention tolled the running of the 10-year prescriptive
period, there is a need for the Sandiganbayan to resolve the motion to dismiss as
soon as possible.
On March 31, 1995, petitioner moved that he be allowed to post a bond,[18] to
answer for whatever docket fees he may be held to pay, with the prayer that the
running of the prescriptive period be deemed tolled pending the resolution by the
Sandiganbayan of the motion to dismiss.
In a Resolution dated April 17, 1995,[19] the Sandiganbayan deferred the resolution
of the motion to dismiss until trial, as the grounds raised therein do not appear to
be indubitable.
Meanwhile, PHI and the Cojuangcos opposed petitioners motion to post bond on
the ground that the same should not be construed as a substitute for the actual
payment of the proper docket fees, because payment of docket fees should not be
subject to any contingency.[20]
On the other hand, petitioner moved for the partial reconsideration of the
Resolution dated April 17, 1995 insofar as the deferment of the issue on payment of
docket fees and the amount thereof. In the alternative, petitioner prayed that his
motion to post bond be granted.[21] PHI and the Cojuangcos also moved for the
reconsideration of the April 17, 1995 Resolution.[22]
Meanwhile, petitioner prayed for the denial of the motion to dismiss in view of the
passage of Republic Act No. 7975[23] which, like Executive Order 14, did not amend
Section 11 of P.D. 1606.[24]
In the meantime, petitioner filed a petition for certiorari before this Court, docketed
as G.R. No. 123264,[25] assailing public respondents decision to defer adjudication
on the issues raised in PHIs and the Cojuangcos motion to dismiss. The petition
for certiorari was dismissed by this Court for being premature.[26]
On March 29, 1996, the Sandiganbayan issued a Resolution denying petitioners
motion to post bond and ordering petitioner (plaintiff-in-intervention therein) to
pay the balance of the docket fee in the amount of P14,425.00.[27]Petitioner paid
with reservation.[28] Esmsc
PHI and the Cojuangcos filed a motion for reconsideration,[29] arguing that the
Sandiganbayan erred in the computation of the docket fees and in allowing
petitioner to pay additional docket fees beyond the prescriptive period. They again
invoked Rule 141, Section 7 (a) of the Rules of Court and averred that the PTIC,
registered in the name of PHI, has a stated value of P1.6 billion. Accordingly, as
petitioner claims to own 31% of PTIC, which has a more recent value of
P1,078,260,896.56, he should be made to pay at least the sum of P5,391,154.35.
On May 7, 1996,[30] the Sandiganbayan denied PHI's and the Cojuancos' motion for
reconsideration of its April 17, 1995 Resolution.
Thereafter, respondents PHI and the Cojuangcos filed their answer to the amended
complaint-in-intervention.[31]
On June 11, 1996, petitioner moved that the amount of P14,425.00 be refunded to
him,[32] insisting that proceedings in the Sandiganbayan should be free of charge.
The Sandiganbayan, on October 9, 1996, issued the assailed resolution granting the
motion to dismiss and denying petitioners motion to admit second amended
complaint-in-intervention.[33]
Petitioner filed a motion for reconsideration[34] dated October 30, 1996, and PHI
and the Cojuangcos filed their opposition.[35] The Republic filed a
manifestation[36] dated December 24, 1996 adopting the arguments raised by PHI
and the Cojuangcos.
On October 6, 1997, the Sandiganbayan denied petitioners motion for
reconsideration.[37] Hence this petition.
As earlier stated, the main issue to be resolved in the case at bar is whether or not
petitioner is barred from asserting his alleged causes of action against respondents
by reason of non-payment of the proper docket fees.
The Sandiganbayan cited several cases spanning from 1932 to 1987 to the effect
that it is not simply the filing of the complaint or appropriate initiatory pleading, but
the payment of the prescribed docket fee, that vests the trial court with jurisdiction
over the subject matter or nature of the action.[38] Kylex
The ruling that the timely filing of correct docket fees is jurisdictional is all too
familiar. It should be noted, however, that the pronouncements of this Court on the
matter have always been influenced by the peculiar legal and equitable
circumstances surrounding each case. For instance, the Lazaro v. Eudencia[39] ruling
was in accordance with the then applicable law, i.e., Section 76 of Act No. 190 as
amended by Act No. 3615. In Malimit v. Degamo[40], this Court ruled that the date
of payment of docket fees and not the date of mailing is considered the date of
filing of a petition for quo warranto. In Garcia v. Vasquez[41], this Court initially
stated that a docket fee must be paid for a second will executed by the same
decedent. Subsequently, on a motion for reconsideration, this Court reversed itself
and held that the initial payment for the first will presented for probate was
sufficient compliance. This Court was even more liberal in Magaspi v.
Ramolete,[42] where the docket fee was paid upon the filing of the complaint. It
turned out later, after the complaint was amended, that the payment was
insufficient. This Court ruled that under the circumstances, the case was docketed
upon the first payment and the trial court already acquired jurisdiction. However,
the correct fee based on the amended complaint was required to be paid.
In the instant case, the Sandiganbayan adhered strictly to the rule enunciated
in Manchester Development Corporation v. Court of Appeals,[43] to wit:
The Court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee. Any 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, insofar as it is inconsistent with this
pronouncement is overturned and reversed.
In Manchester, this Court stated that the allegation in the body of the complaint of
damages suffered in the amount of P78,000,000.00, and the omission of a specific
prayer for that amount, was intended for no other purpose than to evade the
payment of correct filing fees if not to mislead the docket clerk in the assessment of
the correct fee. The ruling was intended to put a stop to such an irregularity. In the
case at bar, however, we note that there is no such irregularity or attempt to
mislead in the instant petition before us.
We also note that the Manchester ruling did not become the final statement on the
matter. In Sun Insurance Office Ltd. v. Asuncion,[44] the Court ruled:
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.
In the said case, the payment of the correct fee within "a reasonable time" but in no
case beyond its applicable prescriptive or reglementary period was allowed. In
another case[45] decided after Manchester, this Court made some more
distinctions: Mesm
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 in the meantime. But
where x x x 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
imply to expunge those claims for damages as to which no
amounts are stated, which is what the respondent Court did, or
allow, on motion, a reasonable time for the amendment of the
complaint 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. Exsm
The rule is not as simple and uncomplicated as Manchester makes it appear. There
are other determining circumstances, equally important. The timely filing of correct
docket fees is jurisdictional, but as shown by our decisions, considerations of law
and equity come into the picture. This situation likewise obtains in the case at bar.
The Sandiganbayan Law itself, Presidential Decree No. 1606, provides:
Sec. 11. Proceedings free of charge. - All proceedings in the
Sandiganbayan shall be conducted at no cost to the complainant
and/or his witnesses.
Petitioner points out that when former President Corazon C. Aquino issued
Executive Order No. 14 in 1986 which expanded the Sandiganbayans jurisdiction to
include civil cases, she did not repeal or amend Section 11 of P.D. 1606 on filing
fees.
Similarly, when Congress in 1994 enacted Republic Act No. 7975 further
strengthening the functional and structural organization of the Sandiganbayan, it
did not amend the provision on non-payment of fees even as it amended or
repealed several sections of the original law. When Congress in 1997 passed
Republic Act No. 8429 further amending P.D. 1606, it did not touch the section on
non-payment of court fees. If Congress in repealing various parts of P.D. 1606 did
not touch Section 11, what is the basis of the Sandiganbayans ruling on repeal or
amendment?
In the resolution submitted to us for review, the Sandiganbayan emphasized that
when P.D. No. 1606 was issued, the jurisdiction of the anti-graft court was limited to
criminal actions. The Sandiganbayan now tries civil cases. While we are inclined to
sustain the ruling that correct filing fees in civil cases must be paid in all courts,
including the Sandiganbayan, this does not preclude a ruling that, in this case, the
petitioner acted in justifiable good faith. There was ample reason for uncertainty
and doubt on the intervenors part not merely as to the correctness of the amount
to be paid but whether or not docket fees should be paid at all. Esm
Equitable considerations are equally significant. Unlike the basis of
the Manchester ruling, there is no evidence in the present case that the petitioner
tried to evade the payment of correct fees or in any way tried to mislead that court
and its employees. On the contrary, petitioner paid dues and asked the
Sandiganbayan what are the correct docket fees, if the dues paid are not accurate.
When Sandiganbayan came out with its own computation, petitioner paid the
corrected amount.
Correctly, petitioner asserted that the Sandiganbayans resolution, assuming it was
correct, was not something that could have been reasonably anticipated by the
ordinary litigant.
Indeed, the actions of the Sandiganbayan clearly call for the application of equitable
considerations. On February 17, 1989, it admitted the complaint-in-intervention.
Answers thereto were filed by PHI and the Cojuangcos. On June 11, 1993, the
Sandiganbayan admitted the amended complaint-in-intervention. More important,
the lower court denied the motions to dismiss filed by respondents questioning the
incorrect payment of docket fees in its resolutions dated April 17, 1995, March 29,
1996 and May 7, 1996. Petitioner was thus led into believing, long before the ten
year prescriptive period expired, that its complaint-in-intervention would stay
admitted.
However, the Sandiganbayan on October 9, 1996 and October 6, 1997 issued the
Resolutions now before us in this petition for review. Petitioners complaint was
dismissed for non-payment of the prescribed docket fees, without obvious regard
to the implications of the reversal of its earlier rulings.
Moreover, on October 27, 1994, petitioner filed a motion for the resolution of the
issue on correct docket fees. When no decision was forthcoming, petitioner on
March 31, 1995 filed a motion to post bond to answer for whatever additional fees
that may be assessed later. On April 17, 1995, the Sandiganbayan decided to defer
the resolution of respondents motions to dismiss until trial. Petitioner even elevated
the inaction of the Sandiganbayan to the Supreme Court on a petition
for certiorari but this was dismissed for being premature. It can thus be seen that,
far from committing the irregularity illustrated in Manchester, petitioner did the
opposite in this case. Msesm
More specifically, petitioners alleged causes of action before the Sandiganbayan
constitute the following:
1.....Claims on the 6% stockholdings in PTIC which he alleged to
have bought from Gregorio Romulo and Leonides Virata but were
purportedly transferred to the Ramon U. Cojuangco group by
coercion, duress and force majeure (Martial Law);
2.....Claims on the 25% shares of General Telephone & Electronics
Corporation (GTE) in Philippine Telecommunications Investment
Corporation (PTIC) which petitioner was prevented from acquiring
by virtue of a "put and call" agreement with GTE;
3.....(Alternative Third Cause of Action) Claims on the 4.6% shares
in PTIC.
Considering that petitioner seeks to recover properties, the ownership and
possession of which he was allegedly deprived through fraud, duress and/or
coercion, we hold that, assuming hypothetically these averments to be true, the
legal relationship of constructive trust was present among the parties concerned in
the said transactions. Constructive trust is that created by reason of equity to
answer the demands of justice and prevent unjust enrichment. It arises against one,
who, by fraud, duress or abuse of confidence, obtains or holds the legal right to
property which he ought not, in equity and good conscience, hold.[46]
Correspondingly, actions thereon prescribe after ten (10) years as provided by
Article 1144 of the Civil Code:
The following actions must be brought within ten (10) years from
the time the right of action accrues:
1.....Upon a written contract;
2.....Upon an obligation created by law;
3.....Upon a judgment.
(Emphasis provided).
Under normal circumstances, petitioners cause of action should have prescribed on
February 26, 1996, a month before petitioner was ordered by the Sandiganbayan to
pay docket fees or two months before the docket fees were actually paid in the
corrected amount of P14,825.00. However, we hold that said payment could not be
construed as belatedly made such as to foreclose the prosecution of his
claims. Esmso
It should be noted that when the issue on docket fees was raised, petitioner
submitted the determination of the same to the sound discretion of the
Sandiganbayan. As earlier stated, he sought for the immediate resolution of this
issue as early as October 27, 1994. In the alternative, petitioner proposed to post a
bond to answer for the docket fees, if such are payable. He even filed a petition
for certiorari, docketed as G.R. No. 123264, to seek an early resolution of this issue.
Clearly, petitioner did not sleep on his rights, and prescription has not set in to bar
his right to seek judicial relief. The essence of the statute of limitations is to prevent
fraudulent claims arising from unwarranted length of time and not to defeat actions
asserted on the honest belief that they were sufficiently submitted for judicial
determination.
To punish petitioner for public respondents failure to timely decide an issue pivotal
to the success of his case would be setting a bad precedent. It would give trial
courts unbridled power and an unfair weapon to frustrate the filing of actions. We
hold that public respondents belated action after prolonged inaction on the issue of
petitioners payment of docket fees is a supervening event beyond the independent
will and control of petitioner that tolled the running of the prescriptive period.
Article 1154 of the Civil Code is applicable by parallelism, to wit:
The period during which the obligee was prevented by fortuitous
event from enforcing his right is not reckoned against him.
As earlier stated, equity and the extraordinary circumstances surrounding the
present case necessitate this ruling. For among the parties in the case at bar, the
Sandiganbayan is the most equipped to afford petitioner the opportunity to present
his claims. Not only that, but going back to the pronouncements of this Court in Sun
Insurance Office, Ltd. (SIOL) v. Asuncion,[47] where we recognized that the sufficiency
of the docket fees is a matter for the determination of the clerk of court and/or his
duly authorized docket clerk or clerk in-charge, the Sandiganbayan could have
immediately drawn petitioners attention if its clerk of court found difficulty in
determining the amount of chargeable docket fees from a reading of the complaint.
Even in the celebrated case of Manchester Development Corporation v. Court of
Appeals,[48] the trial court directed the plaintiff therein to rectify the flaws in its
amended complaint. That way, not only could the Sandiganbayan have seasonably
resolved the issues on docket fees but it could very well have timely settled
petitioners dilemma on what to do and what was required to preserve his
rights. Chiefx
Courts are mandated to promptly administer justice. Having the inherent power to
amend and control the processes and orders, to make them conformable to law
and justice[49] we have the avowed duty to uphold the right of all persons to a
speedy disposition of their cases and avert the precipitate loss of rights.
While it may be argued that petitioner could have very well amended his complaint
and alleged the monetary values of the properties he seeks to recover to comply
with Rule 141, Section 7(a) of the Rules of Court, we find, pro hac vice, that
petitioner acted in good faith when he contended that proceedings before the
Sandiganbayan are free of charge. The present rule must, however, be stressed:
parties filing civil actions before the Sandiganbayan are liable to pay the required
docket fees. The situation only differs in the case at bar because of petitioners
honest conviction manifested in his filing of a reservation for the payments he made,
after having been ordered by the Sandiganbayan on March 29, 1996 to pay the
balance of P14,425.00 and after the court denied his motion to post bond pending
final resolution of the motion to dismiss.
Be that as it may, petitioners position that subsequent amendments[50] to PD 1606
did not expressly repeal Section 11 thereof is untenable. Petitioner failed to
appreciate that the expansion of the Sandiganbayans jurisdiction to include civil
cases impliedly amended the same and Section 1, Rule IV, Part I of the Revised Rules
of the Sandiganbayan. Moreover, the Supreme Court enjoys exclusive power to
promulgate the rules on pleading, practice, and procedure.
In addition, Republic Act No. 7975[51] amended Section 9 of P.D. 1606 to read as
follows:
Rules of Procedure. - The Rules of Court promulgated by the
Supreme Court shall apply to all cases and proceedings filed with
the Sandiganbayan. x x x
Hence, Rule 141 Section 7(a) of the Rules of Court applies to petitioners complaint
and/or amended complaints-in-intervention.
Petitioner argues that R.A. 7975, having been promulgated on March 30, 1995
should not be retroactively applied. This is not so, as statutes regulating the
procedure of the courts are applicable to actions pending and undetermined at the
time of their passage, thus, retrospective in such sense and to that COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, STEPHEN ROXAS,
extent.[52] haideem ANDREW LUISON, GRACE LUISON and JOSE DE MAISIP, respondents.

As a final note, petitioners manifestation that he is withdrawing some of the causes Tanjuatco, Oreta and Tanjuatco for petitioners.
of action alleged in his complaints-in-intervention and the subsequent amendments
thereto should be addressed to the Sandiganbayan for proper determination and Pecabar Law Offices for private respondents.
action. This should be taken into consideration by the Sandiganbayan in
determining anew the docket fees payable by petitioner. RESOLUTION

WHEREFORE, premises considered, the petition is partially GRANTED. The

questioned Resolutions are SET ASIDE. Petitioner is ordered to submit to public
respondent Sandiganbayan the value of the properties he seeks to recover and to
GANCAYCO, J.:
pay the proper docket fees therefor within thirty (30) days upon determination
thereof either by the Sandiganbayan or its clerk of court, which in turn is directed to
Acting on the motion for reconsideration of the resolution of the Second Division of
act with dispatch on the matter.
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
SO ORDERED.
the Court en banc is granted but the motion to set the case for oral argument is
denied.
Puno, Kapunan, and Pardo, JJ., concur.yacats
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
Republic of the Philippines considering the amount of damages sought in the original complaint.
SUPREME COURT
Manila The environmental facts of said case differ from the present in that —

EN BANC 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
G.R. No. 75919 May 7, 1987 damages and specific performance with prayer for temporary restraining order,
etc.3
MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners,
vs.
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.
As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed
only upon payment of the docket fee regardless of the actual date of filing in
court . 12 Thus, in the present case the trial court did not acquire jurisdiction over
the case by the payment of only P410.00 as docket fee. Neither can the amendment
of the complaint thereby vest jurisdiction upon the Court. 13 For an legal purposes
there is no such original complaint that was duly filed which could be amended.
Consequently, the order admitting the amended complaint and all subsequent
proceedings and actions taken by the trial court are null and void.
The Court of Appeals therefore, aptly ruled in the present case that the basis of
assessment of the docket fee should be the amount of damages sought in the
original complaint and not in the amended complaint.
The Court cannot close this case without making the observation that it frowns at
the practice of counsel who filed the original complaint in this case of omitting any
specification of the amount of damages in the prayer although the amount of over
P78 million is alleged in the body of the complaint. This is clearly intended for no
other purpose than to evade the payment of the correct filing fees if not to mislead
the docket clerk in the assessment of the filing fee. This fraudulent practice was
compounded when, even as this Court had taken cognizance of the anomaly and
ordered an investigation, petitioner through another counsel filed an amended
complaint, deleting all mention of the amount of damages being asked for in the
body of the complaint. It was only when in obedience to the order of this Court of
October 18, 1985, the trial court directed that the amount of damages be specified
in the amended complaint, that petitioners' counsel wrote the damages sought in
the much reduced amount of P10,000,000.00 in the body of the complaint but not
in the prayer thereof. The design to avoid payment of the required docket fee is
obvious.
The Court serves warning that it will take drastic action upon a repetition of this
unethical practice.
To put a stop to this irregularity, henceforth all complaints, petitions, answers and
other similar pleadings should specify the amount of damages being prayed for not
only in the body of the pleading but also in the prayer, and said damages shall be
considered in the assessment of the filing fees in any case. Any pleading that fails to
comply with this requirement shall not bib accepted nor admitted, or shall
otherwise be expunged from the record.
The Court acquires jurisdiction over any case only upon the payment of the
prescribed docket fee. An amendment of the complaint or similar pleading will not
thereby vest jurisdiction in the Court, much less the payment of the docket fee
based on the amounts sought in the amended pleading. The ruling in the Magaspi
case 14 in so far as it is inconsistent with this pronouncement is overturned and
reversed.
WHEREFORE, the motion for reconsideration is denied for lack of merit.
SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Bidin, Sarmiento and Cortes, JJ., concur.
Paras, J., took no part.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. Nos. 79937-38 February 13, 1989
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners,
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court,
Quezon City and MANUEL CHUA UY PO TIONG, respondents.
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners.
Tanjuatco, Oreta, Tanjuatco, Berenguer & Sanvicente Law Offices for private
respondent.
GANCAYCO, J.:
Again the Court is asked to resolve the issue of whether or not a court acquires
jurisdiction over a case when the correct and proper docket fee has not been paid.
On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a
complaint with the Regional Trial Court of Makati, Metro Manila for the
consignation of a premium refund on a fire insurance policy with a prayer for the
judicial declaration of its nullity against private respondent Manuel Uy Po Tiong.
Private respondent as declared in default for failure to file the required answer
within the reglementary period.
On the other hand, on March 28, 1984, private respondent filed a complaint in the
Regional Trial Court of Quezon City for the refund of premiums and the issuance of
a writ of preliminary attachment which was docketed as Civil Case No. Q-41177,
initially against petitioner SIOL, and thereafter including E.B. Philipps and D.J. Warby
as additional defendants. The complaint sought, among others, the payment of
actual, compensatory, moral, exemplary and liquidated damages, attorney's fees,
expenses of litigation and costs of the suit. Although the prayer in the complaint did
not quantify the amount of damages sought said amount may be inferred from the
body of the complaint to be about Fifty Million Pesos (P50,000,000.00).
Only the amount of P210.00 was paid by private respondent as docket fee which
prompted petitioners' counsel to raise his objection. Said objection was disregarded
by respondent Judge Jose P. Castro who was then presiding over said case. Upon
the order of this Court, the records of said case together with twenty-two other
cases assigned to different branches of the Regional Trial Court of Quezon City
which were under investigation for under-assessment of docket fees were
transmitted to this Court. The Court thereafter returned the said records to the trial
court with the directive that they be re-raffled to the other judges in Quezon City,
to the exclusion of Judge Castro. Civil Case No. Q-41177 was re-raffled to Branch
104, a sala which was then vacant.
On October 15, 1985, the Court en banc issued a Resolution in Administrative Case
No. 85-10-8752-RTC directing the judges in said cases to reassess the docket fees
and that in case of deficiency, to order its payment. The Resolution also requires all
clerks of court to issue certificates of re-assessment of docket fees. All litigants were
likewise required to specify in their pleadings the amount sought to be recovered in
their complaints.
On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No.
Q-41177 was temporarily assigned, issuedan order to the Clerk of Court instructing
him to issue a certificate of assessment of the docket fee paid by private
respondent and, in case of deficiency, to include the same in said certificate.
On January 7, 1984, to forestall a default, a cautionary answer was filed by On August 13, 1987, the Court of Appeals rendered a decision ruling, among others,
petitioners. On August 30,1984, an amended complaint was filed by private as follows:
respondent including the two additional defendants aforestated.
WHEREFORE, judgment is hereby rendered:
Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter
assigned, after his assumption into office on January 16, 1986, issued a 1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks
Supplemental Order requiring the parties in the case to comment on the Clerk of annulment of the order
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 (a) denying petitioners' motion to dismiss the complaint, as amended, and
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
(b) granting the writ of preliminary attachment, but giving due course to the portion
claim of "not less than Pl0,000,000. 00 as actual compensatory damages" in the
thereof questioning the reassessment of the docketing fee, and requiring the
prayer. In the body of the said second amended complaint however, private
Honorable respondent Court to reassess the docketing fee to be paid by private
respondent alleges actual and compensatory damages and attorney's fees in the
respondent on the basis of the amount of P25,401,707.00. 2
total amount of about P44,601,623.70.
Hence, the instant petition.
On January 24, 1986, Judge Asuncion issued another Order admitting the second
amended complaint and stating therein that the same constituted proper
During the pendency of this petition and in conformity with the said judgment of
compliance with the Resolution of this Court and that a copy thereof should be
respondent court, private respondent paid the additional docket fee of P62,432.90
furnished the Clerk of Court for the reassessment of the docket fees. The
on April 28, 1988. 3
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. 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
Petitioners then filed a petition for certiorari with the Court of Appeals questioning
while it may be true that private respondent had paid the amount of P182,824.90
the said order of Judie Asuncion dated January 24, 1986.
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
On April 24, 1986, private respondent filed a supplemental complaint alleging an
docket fee that should be paid by private respondent is P257,810.49, more or less.
additional claim of P20,000,000.00 as d.qmages so the total claim amounts to about
Not having paid the same, petitioners contend that the complaint should be
P64,601,623.70. On October 16, 1986, or some seven months after filing the
dismissed and all incidents arising therefrom should be annulled. In support of their
supplemental complaint, the private respondent paid the additional docket fee of
theory, petitioners cite the latest ruling of the Court in Manchester Development
P80,396.00.1
Corporation vs. CA, 4 as follows:
The Court acquires jurisdiction over any case only upon the payment of the
prescribed docket fee. An amendment of the complaint or similar pleading will not
thereby vest jurisdiction in the Court, much less the payment of the docket fee
based on the amounts sought in the amended pleading. The ruling in the Magaspi
Case in so far as it is inconsistent with this pronouncement is overturned and
reversed.
On the other hand, private respondent claims that the ruling in Manchester cannot
apply retroactively to Civil Case No. Q41177 for at the time said civil case was filed
in court there was no such Manchester ruling as yet. Further, private respondent
avers that what is applicable is the ruling of this Court in Magaspi v.
Ramolete, 5 wherein this Court held that the trial court acquired jurisdiction over
the case even if the docket fee paid was insufficient.
The contention that Manchester cannot apply retroactively to this case is untenable.
Statutes regulating the procedure of the courts will be construed as applicable to
actions pending and undetermined at the time of their passage. Procedural laws are
retrospective in that sense and to that extent. 6
In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the full
amount of the docket fee is an indispensable step for the perfection of an appeal. In
a forcible entry and detainer case before the justice of the peace court of Manaoag,
Pangasinan, after notice of a judgment dismissing the case, the plaintiff filed a
notice of appeal with said court but he deposited only P8.00 for the docket fee,
instead of P16.00 as required, within the reglementary period of appeal of five (5)
days after receiving notice of judgment. Plaintiff deposited the additional P8.00 to
complete the amount of the docket fee only fourteen (14) days later. On the basis
of these facts, this court held that the Court of First Instance did notacquire
jurisdiction to hear and determine the appeal as the appeal was not thereby
perfected.
In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to
become a Filipino citizen by sending it through registered mail to the Office of the
Solicitor General in 1953 but the required filing fee was paid only in 1956, barely
5V2 months prior to the filing of the petition for citizenship. This Court ruled that
the declaration was not filed in accordance with the legal requirement that such
declaration should be filed at least one year before the filing of the petition for
citizenship. Citing Lazaro, this Court concluded that the filing of petitioner's
declaration of intention on October 23, 1953 produced no legal effect until the
required filing fee was paid on May 23, 1956.
In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee were
applied. It was an original petition for quo warranto contesting the right to office of
proclaimed candidates which was mailed, addressed to the clerk of the Court of
First Instance, within the one-week period after the proclamation as provided
therefor by law.10However, the required docket fees were paid only after the
expiration of said period. Consequently, this Court held that the date of such
payment must be deemed to be the real date of filing of aforesaid petition and not
the date when it was mailed.
Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket fee
must be paid before a court will act on a petition or complaint. However, we also
held that said rule is not applicable when petitioner seeks the probate of several
wills of the same decedent as he is not required to file a separate action for each
will but instead he may have other wills probated in the same special proceeding
then pending before the same court.
Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a case is
deemed filed only upon payment of the docket fee regardless of the actual date of
its filing in court. Said case involved a complaint for recovery of ownership and
possession of a parcel of land with damages filed in the Court of First Instance of
Cebu. Upon the payment of P60.00 for the docket fee and P10.00 for the sheriffs
fee, the complaint was docketed as Civil Case No. R-11882. The prayer of the
complaint sought that the Transfer Certificate of Title issued in the name of the
defendant be declared as null and void. It was also prayed that plaintiff be declared
as owner thereof to whom the proper title should be issued, and that defendant be
made to pay monthly rentals of P3,500.00 from June 2, 1948 up to the time the
property is delivered to plaintiff, P500,000.00 as moral damages, attorney's fees in
the amount of P250,000.00, the costs of the action and exemplary damages in the
amount of P500,000.00.
The defendant then filed a motion to compel the plaintiff to pay the correct amount
of the docket fee to which an opposition was filed by the plaintiff alleging that the
action was for the recovery of a parcel of land so the docket fee must be based on
its assessed value and that the amount of P60.00 was the correct docketing fee. The
trial court ordered the plaintiff to pay P3,104.00 as filing fee.
The plaintiff then filed a motion to admit the amended complaint to include the
Republic as the defendant. In the prayer of the amended complaint the exemplary
damages earlier sought was eliminated. The amended prayer merely sought moral
damages as the court may determine, attorney's fees of P100,000.00 and the costs
of the action. The defendant filed an opposition to the amended complaint. The
opposition notwithstanding, the amended complaint was admitted by the trial court.
The trial court reiterated its order for the payment of the additional docket fee
which plaintiff assailed and then challenged before this Court. Plaintiff alleged that
he paid the total docket fee in the amount of P60.00 and that if he has to pay the
additional fee it must be based on the amended complaint.
The question posed, therefore, was whether or not the plaintiff may be considered
to have filed the case even if the docketing fee paid was not sufficient.
In Magaspi, We reiterated the rule that the case was deemed filed only upon the
payment of the correct amount for the docket fee regardless of the actual date of
the filing of the complaint; that there was an honest difference of opinion as to the
correct amount to be paid as docket fee in that as the action appears to be one for
the recovery of property the docket fee of P60.00 was correct; and that as the
action is also one, for damages, We upheld the assessment of the additional docket
fee based on the damages alleged in the amended complaint as against the
assessment of the trial court which was based on the damages alleged in the
original complaint.
However, as aforecited, this Court
overturned Magaspi in Manchester. Manchester involves an action for torts and
damages and specific performance with a prayer for the issuance of a temporary
restraining order, etc. The prayer in said case is for the issuance of a writ of
preliminary prohibitory injunction during the pendency of the action against the
defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for
the property in question, the attachment of such property of defendants that may
be sufficient to satisfy any judgment that may be rendered, and, after hearing, the
issuance of an order requiring defendants to execute a contract of purchase and
sale of the subject property and annul defendants' illegal forfeiture of the money of
plaintiff. It was also prayed that the defendants be made to pay the plaintiff jointly
and severally, actual, compensatory and exemplary damages as well as 25% of said
amounts as may be proved during the trial for attorney's fees. The plaintiff also
asked the trial court to declare the tender of payment of the purchase price of
plaintiff valid and sufficient for purposes of payment, and to make the injunction
permanent. The amount of damages sought is not specified in the prayer although
the body of the complaint alleges the total amount of over P78 Millon allegedly
suffered by plaintiff.
Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for
the docket fee based on the nature of the action for specific performance where
the amount involved is not capable of pecuniary estimation. However, it was
obvious from the allegations of the complaint as well as its designation that the
action was one for damages and specific performance. Thus, this court held the
plaintiff must be assessed the correct docket fee computed against the amount of
damages of about P78 Million, although the same was not spelled out in the prayer
of the complaint.
Meanwhile, plaintiff through another counsel, with leave of court, filed an amended
complaint on September 12, 1985 by the inclusion of another co-plaintiff and
eliminating any mention of the amount of damages in the body of the complaint.
The prayer in the original complaint was maintained.
On October 15, 1985, this Court ordered the re-assessment of the docket fee in the
said case and other cases that were investigated. On November 12, 1985, the trial
court directed the plaintiff to rectify the amended complaint by stating the amounts
which they were asking for. This plaintiff did as instructed. In the body of the
complaint the amount of damages alleged was reduced to P10,000,000.00 but still
no amount of damages was specified in the prayer. Said amended complaint was
admitted.
Applying the principle in Magaspi that "the case is deemed filed only upon payment
of the docket fee regardless of the actual date of filing in court," this Court held that
the trial court did not acquire jurisdiction over the case by payment of only P410.00
for the docket fee. Neither can the amendment of the complaint thereby vest
jurisdiction upon the Court. For all legal purposes there was no such original
complaint duly filed which could be amended. Consequently, the order admitting
the amended complaint and all subsequent proceedings and actions taken by the
trial court were declared null and void.13
The present case, as above discussed, is among the several cases of
under-assessment of docket fee which were investigated by this Court together
with Manchester. The facts and circumstances of this case are similar
to Manchester. In the body of the original complaint, the total amount of damages
sought amounted to about P50 Million. In the prayer, the amount of damages asked
for was not stated. The action was for the refund of the premium and the issuance
of the writ of preliminary attachment with damages. The amount of only P210.00
was paid for the docket fee. On January 23, 1986, private respondent filed an
amended complaint wherein in the prayer it is asked that he be awarded no less
than P10,000,000.00 as actual and exemplary damages but in the body of the
complaint the amount of his pecuniary claim is approximately P44,601,623.70. Said
amended complaint was admitted and the private respondent was reassessed the
additional docket fee of P39,786.00 based on his prayer of not less than
P10,000,000.00 in damages, which he paid.
On April 24, 1986, private respondent filed a supplemental complaint alleging an
additional claim of P20,000,000.00 in damages so that his total claim is
approximately P64,601,620.70. On October 16, 1986, private respondent paid an
additional docket fee of P80,396.00. After the promulgation of the decision of the
respondent court on August 31, 1987 wherein private respondent was ordered to
be reassessed for additional docket fee, and during the pendency of this petition,
and after the promulgation of Manchester, on April 28, 1988, private respondent
paid an additional docket fee of P62,132.92. Although private respondent appears
to have paid a total amount of P182,824.90 for the docket fee considering the total
amount of his claim in the amended and supplemental complaint amounting to
about P64,601,620.70, petitioner insists that private respondent must pay a docket
fee of P257,810.49.
The principle in Manchester could very well be applied in the present case. The
pattern and the intent to defraud the government of the docket fee due it is
obvious not only in the filing of the original complaint but also in the filing of the
second amended complaint.
However, in Manchester, petitioner did not pay any additional docket fee until] the
case was decided by this Court on May 7, 1987. Thus, in Manchester, due to the
fraud committed on the government, this Court held that the court a quo did not
acquire jurisdiction over the case and that the amended complaint could not have
been admitted inasmuch as the original complaint was null and void.
In the present case, a more liberal interpretation of the rules is called for
considering that, unlike Manchester, private respondent demonstrated his
willingness to abide by the rules by paying the additional docket fees as required.
The promulgation of the decision in Manchester must have had that sobering
influence on private respondent who thus paid the additional docket fee as ordered
by the respondent court. It triggered his change of stance by manifesting his
willingness to pay such additional docket fee as may be ordered.
Nevertheless, petitioners contend that the docket fee that was paid is still
insufficient considering the total amount of the claim. This is a matter which the
clerk of court of the lower court and/or his duly authorized docket clerk or clerk
in-charge should determine and, thereafter, if any amount is found due, he must
require the private respondent to pay the same.
Thus, the Court rules as follows:
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.
Fernan (C.J), Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla,
Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.

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 Footnotes
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 THIRD DIVISION
prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third party claims and similar PROTON PILIPINAS CORPORATION, AUTOMOTIVE G. R. No. 151242
pleadings, which shall not be considered filed until and unless the filing fee PHILIPPINES, ASEA ONE CORPORATION and
prescribed therefor is paid. The court may also allow payment of said fee within a AUTOCORP, Present:
reasonable time but also in no case beyond its applicable prescriptive or Petitioners,
reglementary period. PANGANIBAN, J., Chairman,
SANDOVAL-GUTIERREZ,
3. Where the trial court acquires jurisdiction over a claim by the filing of the - versus - CORONA,
appropriate pleading and payment of the prescribed filing fee but, subsequently, CARPIO MORALES, and
the judgment awards a claim not specified in the pleading, or if specified the same GARCIA, JJ.
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 BANQUE NATIONALE DE PARIS,[1]
or his duly authorized deputy to enforce said lien and assess and collect the Respondent.
additional fee.
Promulgated:
WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the
June 15, 2005
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 x------------------------------------------------x
sought in the original complaint and the supplemental complaint as may be gleaned
 The Makati RTC Clerk of Court assessed the docket fees which BNP paid
DECISION at P352,116.30[7] which was computed as follows:[8]

First Cause of Action $ 844,674.07

CARPIO MORALES, J.: Second Cause of Action 171,120.53
Third Cause of Action 529,189.80
$1,544,984.40
It appears that sometime in 1995, petitioner Proton Pilipinas Corporation (Proton)
5% as Attorney's Fees $ 77,249.22
availed of the credit facilities of herein respondent, Banque Nationale de Paris (BNP).
TOTAL .. $1,622,233.62
To guarantee the payment of its obligation, its co-petitioners Automotive
Conversion rate to peso x 43_
Corporation Philippines (Automotive), Asea One Corporation (Asea) and Autocorp
Group (Autocorp) executed a corporate guarantee[2] to the extent of TOTAL .. P69,756,000.00 (roundoff)
US$2,000,000.00. BNP and Proton subsequently entered into three trust receipt
Computation based on Rule 141:
agreements dated June 4, 1996,[3] January 14, 1997,[4] and April 24, 1997.[5]
COURT JDF
Under the terms of the trust receipt agreements, Proton would receive imported
passenger motor vehicles and hold them in trust for BNP. Proton would be free to
P 69,756,000.00 P 69.606.000.00
sell the vehicles subject to the condition that it would deliver the proceeds of the
- 150,000.00 x .003
sale to BNP, to be applied to its obligations to it. In case the vehicles are not sold,
Proton would return them to BNP, together with all the accompanying documents 69,606,000.00 208,818.00
of title. x .002 + 450.00
139,212.00 P 209,268.00
Allegedly, Proton failed to deliver the proceeds of the sale and return the unsold + 150.00
motor vehicles. P 139,362.00

Pursuant to the corporate guarantee, BNP demanded from Automotive, Asea and LEGAL : P139,362.00
Autocorp the payment of the amount of US$1,544,984.40[6] representing Protons + 209,268.00
total outstanding obligations. These guarantors refused to pay, however. Hence, P348,630.00 x 1% = P3,486.30
BNP filed on September 7, 1998 before the Makati Regional Trial Court (RTC) a
complaint against petitioners praying that they be ordered to pay (1) P 139,362.00
US$1,544,984.40 plus accrued interest and other related charges thereon + 209,268.00
subsequent to August 15, 1998 until fully paid and (2) an amount equivalent to 5% 3,486.00
of all sums due from petitioners as attorneys fees. P 352,116.30 Total fees paid by the plaintiff

To the complaint, the defendants-herein petitioners filed on October 12, 1998 a
Motion to Dismiss[9] on the ground that BNP failed to pay the correct docket fees to
thus prevent the trial court from acquiring jurisdiction over the case.[10] As
additional ground, petitioners raised prematurity of the complaint, BNP not having
priorly sent any demand letter.[11]
By Order[12] of August 3, 1999, Branch 148 of the Makati RTC denied petitioners
Motion to Dismiss, viz:
Resolving the first ground relied upon by the defendant,
this court believes and so hold that the docket fees were properly
paid. It is the Office of the Clerk of Court of this station that
computes the correct docket fees, and it is their duty to assess
the docket fees correctly, which they did.
Even granting arguendo that the docket fees were not
properly paid, the court cannot just dismiss the case. The Court
has not yet ordered (and it will not in this case) to pay the correct
docket fees, thus the Motion to dismiss is premature, aside from
being without any legal basis.
As held in the case of National Steel Corporation vs. CA,
G.R. No. 123215, February 2, 1999, the Supreme Court said:
xxx
Although the payment of the proper
docket fees is a jurisdictional requirement, the
trial court may allow the plaintiff in an action to
pay the same within a reasonable time within
the expiration of applicable prescription or
reglementary period. If the plaintiff fails to
comply with this requirement, the defendant
should timely raise the issue of jurisdiction or
else he would be considered in estoppel. In the
latter case, the balance between appropriate
docket fees and the amount actually paid by the
plaintiff will be considered a lien or (sic) any
award he may obtain in his favor.
As to the second ground relied upon by the defendants,
in that a review of all annexes to the complaint of the plaintiff
reveals that there is not a single formal demand letter for
defendants to fulfill the terms and conditions of the three (3) trust
agreements.
In this regard, the court cannot sustain the submission of
defendant. As correctly pointed out by the plaintiff, failure to
make a formal demand for the debtor to pay the plaintiff is not
among the legal grounds for the dismissal of the case. Anyway, in
the appreciation of the court, this is simply evidentiary.
xxx
WHEREFORE, for lack of merit, the Motion to Dismiss
interposed by the defendants is hereby DENIED.[13] (Underscoring
supplied)
Petitioners filed a motion for reconsideration[14] of the denial of their Motion to
Dismiss, but it was denied by the trial court by Order[15] of October 3, 2000.
Petitioners thereupon brought the case on certiorari and mandamus[16] to the Court
of Appeals which, by Decision[17] of July 25, 2001, denied it in this wise:
Section 7(a) of Rule 141 of the Rules of Court excludes interest
accruing from the principal amount being claimed in the pleading
in the computation of the prescribed filing fees. The complaint
was submitted for the computation of the filing fee to the Office
of the Clerk of Court of
the Regional Trial Court of Makati City which made an assessment
that respondent paid accordingly. What the Office of the Clerk of
Court did and the ruling of the respondent Judge find support in
the decisions of the Supreme Court in Ng Soon vs. Alday and
Tacay vs. RTC of Tagum, Davao del Norte. In the latter case, the
Supreme Court explicitly ruled that where the action is purely for
recovery of money or damages, the docket fees are assessed on
the basis of the aggregate amount claimed, exclusive only of
interests and costs.
Assuming arguendo that the correct filing fees was not made, the
rule is that the court may allow a reasonable time for the
payment of the prescribed fees, or the balance thereof, and upon
such payment, the defect is cured and the court may properly
take cognizance of the action unless in the meantime prescription
has set in and consequently barred the right of action. Here
respondent Judge did not make any finding, and rightly so, that
the filing fee paid by private respondent was insufficient.
On the issue of the correct dollar-peso rate of exchange, the
Office of the Clerk of Court of the RTC of Makati pegged it
at P 43.21 to US$1. In the absence of any office guide of the rate
of exchange which said court functionary was duty bound to
follow, the rate he applied is presumptively correct.
Respondent Judge correctly ruled that the matter of demand
letter is evidentiary and does not form part of the required
allegations in a complaint. Section 1, Rule 8 of the 1997 Rules of
Civil Procedure pertinently provides:
Every pleading shall contain in a
methodical and logical form, a plain, concise
and direct statement of the ultimate facts on
which the party pleading relies for his claim or
defense, as the case may be, omitted the
statement of mere evidentiary facts.
Judging from the allegations of the complaint particularly
paragraphs 6, 12, 18, and 23 where allegations of imputed
demands were made upon the defendants to fulfill their
respective obligations, annexing the demand letters for the
purpose of putting up a sufficient cause of action is not required.
In fine, respondent Judge committed no grave abuse of
discretion amounting to lack or excess of jurisdiction to warrant
certiorari and mandamus.[18] (Underscoring supplied)
Their Motion for Reconsideration[19] having been denied by the Court of
Appeals, petitioners filed the present petition for review on certiorari[21] and pray
[20]
for the following reliefs:
WHEREFORE, in view of all the foregoing, it is most respectfully
prayed of this Honorable Court to grant the instant petition by
REVERSING and SETTING ASIDE the questioned Decision of July 25,
2001 and the Resolution of December 18, 2001 for being contrary
to law, to Administrative Circular No. 11-94 and Circular No. 7 and
instead direct the court a quo to require Private Respondent
Banque to pay the correct docket fee pursuant to the correct
exchange rate of the dollar to the peso on September 7, 1998 and
to quantify its claims for interests on the principal obligations in
the first, second and third causes of actions in its Complaint in
Civil Case No. 98-2180.[22] (Underscoring supplied)
 Citing Administrative Circular No. 11-94,[23] petitioners argue that BNP
failed to pay the correct docket fees as the said circular provides that in the
assessment thereof, interest claimed should be included. There being an
underpayment of the docket fees, petitioners conclude, the trial court did not
acquire jurisdiction over the case.
Additionally, petitioners point out that the clerk of court, in converting BNPs claims
from US dollars to Philippine pesos, applied the wrong exchange rate of US $1
= P43.00, the exchange rate on September 7, 1998 when the complaint was filed
having been pegged at US $1 = P43.21. Thus, by petitioners computation, BNPs
claim as of August 15, 1998 was actually P70,096,714.72,[24] not P69,756,045.66.
Furthermore, petitioners submit that pursuant to Supreme Court Circular No.
7,[25] the complaint should have been dismissed for failure to specify the amount of
interest in the prayer.
Circular No. 7 reads:
TO: JUDGES AND CLERKS OF COURT OF THE COURT OF TAX
APPEALS, REGIONAL TRIAL COURTS, METROPOLITAN
TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS,
MUNICIPAL CIRCUIT TRIAL COURTS, SHARIA DISTRICT
COURTS;AND THE INTEGRATED BAR OF THE PHILIPPINES
SUBJECT: ALL COMPLAINTS MUST SPECIFY AMOUNT OF
DAMAGES SOUGHT NOT ONLY IN THE BODY OF THE
PLEADING, BUT ALSO IN THE PRAYER IN ORDER TO BE
ACCEPTED AND ADMITTED FOR FILING. THE AMOUNT OF
DAMAGES SO SPECIFIED IN THE COMPLAINT SHALL BE
THE BASIS FOR ASSESSING THE AMOUNT OF THE FILING
FEES.
In Manchester Development Corporation vs. Court of Appeals, No.
L-75919, May 7, 1987, 149 SCRA 562, this Court condemned the
practice of counsel who in filing the original complaint omitted
from the prayer any specification of the amount of damages
although the amount of over P78 million is alleged in the body of
the complaint. This Court observed that (T)his is clearly intended
for no other purpose than to evade the payment of the correct
filing fees if not to mislead the docket clerk, in the assessment of
the filing fee. This fraudulent practice was compounded when,
even as this Court had taken cognizance of the anomaly and
ordered an investigation, petitioner through another counsel filed
an amended complaint, deleting all mention of the amount of
damages being asked for in the body of the complaint. xxx
For the guidance of all concerned, the WARNING given by the
court in the afore-cited case is reproduced hereunder:
The Court serves warning that it will take drastic action
upon a repetition of this unethical practice.
To put a stop to this irregularity, henceforth all
complaints, petitions, answers and other similar
pleadings should specify the amount of damages
being prayed for not only in the body of the
pleading but also in the prayer, and said
damages shall be considered in the assessment
of the filing fees in any case. Any pleading
that fails to comply with this requirement shall
not be accepted nor admitted, or shall otherwise
be expunged from the record.
The Court acquires jurisdiction over any case only upon
the payment of the prescribed docket fee. An
amendment of the complaint or similar pleading
will not thereby vest jurisdiction in the Court,
much less the payment of the docket fee based
 on the amount sought in the amended pleading.
The ruling in the Magaspi case (115 SCRA 193)
in so far as it is inconsistent with this
pronouncement is overturned and reversed.
Strict compliance with this Circular is hereby enjoined.
Let this be circularized to all the courts hereinabove named and to
the President and Board of Governors of the Integrated Bar of
the Philippines, which is hereby directed to disseminate this
Circular to all its members.
March 24, 1988.
(Sgd). CLAUDIO TEEHANKEE
Chief Justice
(Emphasis and underscoring supplied)
On the other hand, respondent maintains that it had paid the filing fee which was
assessed by the clerk of court, and that there was no violation of Supreme Court
Circular No. 7 because the amount of damages was clearly specified in the prayer,
to wit:
2. On the FIRST CAUSE OF ACTION
(c) Defendant PROTON be ordered to pay the sum of (i) US
DOLLARS EIGHT HUNDRED FORTY FOUR THOUSAND SIX
HUNDRED SEVENTY FOUR AND SEVEN CENTS (US$ 844,674.07),
plus accrued interests and other related charges thereon
subsequent to August 15, 1998, until fully paid; and (ii) an amount
equivalent to 5% of all sums due from said Defendant, as and for
attorneys fees;
3. On the SECOND CAUSE OF ACTION
(d) Defendant PROTON be ordered to pay the sum of (i) US DOLLARS ONE
HUNDRED TWENTY AND FIFTY THREE CENTS (US$171,120.53), plus
accrued interests and other related charges thereon subsequent to August
15, 1998 until fully paid; and (ii) an amount equivalent to 5% of all sums
due from said Defendant, as and for attorneys fees;
4. On the THIRD CAUSE OF ACTION
(e) Defendant PROTON be ordered to pay the sum of (i) US
DOLLARS FIVE HUNDRED TWENTY NINE THOUSAND ONE
HUNDRED EIGHTY NINE AND EIGHTY CENTS (US$529,189.80), plus
accrued interests and other related charges thereon subsequent
to August 15, 1998 until fully paid; and (ii) an amount equivalent
to 5% or all sums due from said Defendant, as and for attorneys
fees;
5. On ALL THE CAUSES OF ACTION
Defendants AUTOMOTIVE CORPORATION PHILIPPINES, ASEA ONE
CORPORATION and AUTOCORP GROUP to be ordered to pay
Plaintiff BNP the aggregate sum of (i) US DOLLARS ONE MILLION
FIVE HUNDRED FORTY FOUR THOUSAND NINE HUNDRED EIGHTY
FOUR AND FORTY CENTS (US$1,544,984.40) (First through Third
Causes of Action), plus accrued interest and other related charges
thereon subsequent to August 15, 1998 until fully paid; and (ii) an
amount equivalent to 5% of all sums due from said Defendants, as
and for attorneys fees.[26]
Moreover, respondent posits that the amount of US$1,544,984.40
represents not only the principal but also interest and other related
charges which had accrued as of August 15, 1998. Respondent goes even
further by suggesting that in light of Tacay v. Regional Trial Court of
Tagum, Davao del Norte[27] where the Supreme Court held,
 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.[28] (Emphasis and
underscoring supplied),
it made an overpayment.
When Tacay was decided in 1989, the pertinent rule applicable was Section 5 (a) of
Rule 141 which provided for the following:
SEC. 5. Clerks of Regional Trial Courts. (a) For filing an
action or proceeding, or a permissive counter-claim or cross-claim
not arising out of the same transaction subject of the complaint, a
third-party complaint and a complaint in intervention and for all
services in the same, if the sum claimed, exclusive of interest, of
the value of the property in litigation, or the value of the estate, is:
1. Less than P 5,000.00 . P 32.00
2. P 5,000.00 or more but less than P 10,000.00 48.00
3. P 10,000.00 or more but less than P 20,000.00 .. 64.00
4. P 20,000.00 or more but less than P 40,000.00 .. 80.00
5. P 40,000.00 or more but less than P 60,000.00 .. 120.00
6. P 60,000.00 or more but less than P 80,000.00 . 160.00
7. P 80,000.00 or more but less than P 150,000.00 200.00
8. And for each P 1,000.00 in excess of P 150,000.00 ..... 4.00
9. When the value of the case cannot be estimated 400.00
10. When the case does not concern property
(naturalization, adoption, legal separation, etc.) ..... 64.00
11. In forcible entry and illegal detainer cases appealed
from inferior courts . 40.00
If the case concerns real estate, the assessed value
thereof shall be considered in computing the fees.
In case the value of the property or estate or the sum
claim is less or more in accordance with the appraisal of the court,
the difference of fees shall be refunded or paid as the case may
be.
When the complaint in this case was filed in 1998, however, as correctly pointed
out by petitioners, Rule 141 had been amended by Administrative Circular No.
11-94[29] which provides:
BY RESOLUTION OF THE COURT, DATED JUNE 28, 1994,
PURSUANT TO SECTION 5 (5) OF ARTICLE VIII OF THE
CONSTITUTION, RULE 141, SECTION 7 (a) AND (d), and SECTION 8
(a) and (b) OF THE RULES OF COURT ARE HEREBY AMENDED TO
READ AS FOLLOWS:
RULE 141
LEGAL FEES
xxx
Sec. 7. Clerks of Regional Trial Courts
(a) For filing an action or a permissive counterclaim or money
claim against an estate not based on judgment, or for filing with
leave of court a third-party, fourth-party, etc. complaint, or a
complaint in intervention, and for all clerical services in the same,
if the total sum claimed, inclusive of interest, damages of whatever
kind, attorneys fees, litigation expenses, and costs, or the stated
value of the property in litigation, is:
1. Not more than P 100,000.00 P 400.00
 2. P 100,000.00, or more but not more than P 150,000.00 600.00
3. For each P 1,000.00 in excess of P 150,000.00 . 5.00
xxx
Sec. 8. Clerks of Metropolitan and Municipal Trial Courts
(a) For each civil action or proceeding, where the value of the
subject matter involved, or the amount of the demand, inclusive of
interest, damages or whatever kind, attorneys fees, litigation
expenses, and costs, is:
1. Not more than P 20,000.00 ...P 120.00
2. More than P 20,000.00 but not more than P 100,000.00 .
400.00
3. More than P 100,000.00 but not more than P 200,000.00
850.00
(Emphasis and underscoring supplied)
The clerk of court should thus have assessed the filing fee by taking into
consideration the total sum claimed, inclusive of interest, damages of whatever
kind, attorneys fees, litigation expenses, and costs, or the stated value of the
property in litigation. Respondents and the Court of Appeals reliance then
on Tacay was not in order.
Neither was, for the same reason, the Court of Appeals reliance on the 1989 case
of Ng Soon v. Alday,[30] where this Court held:
The failure to state the rate of interest demanded was not fatal not
only because it is the Courts which ultimately fix the same, but
also because Rule 141, Section 5(a) of the Rules of Court, itemizing
the filing fees, speaks of the sum claimed, exclusive of interest. This
clearly implies that the specification of the interest rate is not that
indispensable.
Factually, therefore, not everything was left to
guesswork as respondent Judge has opined. The sums claimed
were ascertainable, sufficient enough to allow a computation
pursuant to Rule 141, section 5(a).
Furthermore, contrary to the position taken by
respondent Judge, the amounts claimed need not be initially
stated with mathematical precision. The same Rule 141, section
5(a) (3rd paragraph), allows an appraisal more or less.[31] Thus:
In case the value of the property or estate or the sum
claimed is less or more in accordance with the appraisal of the
court, the difference of fee shall be refunded or paid as the case
may be.
In other words, a final determination is still to be made
by the Court, and the fees ultimately found to be payable will
either be additionally paid by the party concerned or refunded to
him, as the case may be. The above provision clearly allows an
initial payment of the filing fees corresponding to the estimated
amount of the claim subject to adjustment as to what later may
be proved.
. . . there is merit in petitioner's claim that the third
paragraph of Rule 141, Section 5(a) clearly contemplates a
situation where an amount is alleged or claimed in the complaint
but is less or more than what is later proved. If what is proved is
less than what was claimed, then a refund will be made; if more,
additional fees will be exacted. Otherwise stated, what is subject
to adjustment is the difference in the fee and not the whole
amount (Pilipinas Shell Petroleum Corp., et als., vs. Court of
Appeals, et als., G.R. No. 76119, April 10, 1989).[32] (Emphasis and
underscoring supplied)

Respecting the Court of Appeals conclusion that the clerk of court did not err when
he applied the exchange rate of US $1 = P43.00 [i]n the absence of any office guide
of the rate of exchange which said court functionary was duty bound to
follow,[hence,] the rate he applied is presumptively correct, the same does not lie.
The presumption of regularity of the clerk of courts application of the exchange rate
is not conclusive.[33]It is disputable.[34] As such, the presumption may be overturned
by the requisite rebutting evidence.[35] In the case at bar, petitioners have
adequately proven with documentary evidence[36] that the exchange rate when the
complaint was filed on September 7, 1998 was US $1 = P43.21.
In fine, the docket fees paid by respondent were insufficient.
With respect to petitioners argument that the trial court did not acquire jurisdiction
over the case in light of the insufficient docket fees, the same does not lie.
True, in Manchester Development Corporation v. Court of Appeals,[37] this Court held
that the court acquires jurisdiction over any case only upon the payment of the
prescribed docket fees,[38] hence, it concluded that the trial court did not acquire
jurisdiction over the case.
It bears emphasis, however, that the ruling in Manchester was clarified in Sun
Insurance Office, Ltd. (SIOL) v. Asuncion[39] when this Court held that in the former
there was clearly an effort to defraud the government in avoiding to pay the correct
docket fees, whereas in the latter the plaintiff demonstrated his willingness to abide
by paying the additional fees as required.
The principle in Manchester could very well be applied in the
present case. The pattern and the intent to defraud the
government of the docket fee due it is obvious not only in the
filing of the original complaint but also in the filing of the second
amended complaint.
However, in Manchester, petitioner did not pay any additional
docket fee until the case was decided by this Court on May 7,
1987. Thus, in Manchester, due to the fraud committed on the
government, this Court held that the court a quo did not acquire
jurisdiction over the case and that the amended complaint could
not have been admitted inasmuch as the original complaint was
null and void.
In the present case, a more liberal interpretation of the rules is
called for considering that, unlike Manchester, private respondent
demonstrated his willingness to abide by the rules by paying the
additional docket fees as required. The promulgation of the
decision in Manchester must have had that sobering influence on
private respondent who thus paid the additional docket fee as
ordered by the respondent court. It triggered his change of stance
by manifesting his willingness to pay such additional docket fee as
may be ordered.
Nevertheless, petitioners contend that the docket fee that was
paid is still insufficient considering the total amount of the claim.
This is a matter which the clerk of court of the lower court and/or
his duly authorized docket clerk or clerk in charge should
determine and, thereafter, if any amount is found due, he must
require the private respondent to pay the same.
Thus, the Court rules as follows:
1. It is not simply the filing of the complaint or appropriate
initiatory pleading, but the payment of the prescribed docket fee,
that vests a trial court with jurisdiction over the subject-matter or
nature of the action. Where the filing of the initiatory pleading is
not accompanied by payment of the docket fee, the court may
allow payment of the fee within a reasonable time but in no case
beyond the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party
claims and similar pleadings, which shall not be considered filed
until and unless the filing fee prescribed therefor is paid. The
court may also allow payment of said fee within a reasonable time
but also in no case beyond its applicable prescriptive or
reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the
filing of the appropriate pleading and payment of the prescribed
filing fee but, subsequently, the judgment awards a claim not
specified in the pleading, or if specified the same has been left for
determination by the court, the additional filing fee therefor shall
constitute a lien on the judgment. It shall be the responsibility of
the Clerk of Court or his duly authorized deputy to enforce said
lien and assess and collect the additional fee.[40] (Emphasis and
underscoring supplied)
The ruling in Sun Insurance Office was echoed in the 2005 case of Heirs of Bertuldo
Hinog v. Hon. Achilles Melicor:[41]
Plainly, while the payment of the prescribed docket fee is a
jurisdictional requirement, even its non-payment at the time of
filing does not automatically cause the dismissal of the case, as
long as the fee is paid within the applicable prescriptive or
reglementary period, more so when the party involved
demonstrates a willingness to abide by the rules prescribing such
payment. Thus, when insufficient filing fees were initially paid by
the plaintiffs and there was no intention to defraud the
government, the Manchester rule does not apply. (Emphasis and
underscoring supplied; citations omitted)
In the case at bar, respondent merely relied on the assessment made by the clerk of
court which turned out to be incorrect. Under the circumstances, the clerk of court
has the responsibility of reassessing what respondent must pay within the
prescriptive period, failing which the complaint merits dismissal.
Parenthetically, in the complaint, respondent prayed for accrued interest
subsequent to August 15, 1998 until fully paid. The complaint having been filed
on September 7, 1998, respondents claim includes the interest from August 16,
1998 until such date of filing.
Respondent did not, however, pay the filing fee corresponding to its claim for
interest from August 16, 1998 until the filing of the complaint on September 7,
1998. As priorly discussed, this is required under Rule 141, as amended by
Administrative Circular No. 11-94, which was the rule applicable at the time. Thus,
as the complaint currently stands, respondent cannot claim the interest
from August 16, 1998 until September 7, 1998, unless respondent is allowed by
motion to amend its complaint within a reasonable time and specify the precise
amount of interest petitioners owe from August 16, 1998 to September 7,
1998[42] and pay the corresponding docket fee therefor.
With respect to the interest accruing after the filing of the complaint, the same can
only be determined after a final judgment has been handed down. Respondent
cannot thus be made to pay the corresponding docket fee therefor. Pursuant,
however, to Section 2, Rule 141, as amended by Administrative Circular No. 11-94,
respondent should be made to pay additional fees which shall constitute a lien in
the event the trial court adjudges that it is entitled to interest accruing after the
filing of the complaint.
Sec. 2. Fees as lien. Where the court in its final judgment awards a
claim not alleged, or a relief different or more than that claimed
in the pleading, the party concerned shall pay the additional fees
which shall constitute a lien on the judgment in satisfaction of
said lien. The clerk of court shall assess and collect the
corresponding fees.
In Ayala Corporation v. Madayag,[43] in interpreting the third rule laid down in Sun
Insurance regarding awards of claims not specified in the pleading, this Court held
that the same refers only to damages arising after the filing of the complaint or
similar pleading as to which the additional filing fee therefor shall constitute a lien on
the judgment.

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

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

WHEREFORE, the petition is GRANTED in part. The July 25, 2001 Decision and the
December 18, 2001 Resolution of the Court Appeals are hereby MODIFIED. The
Clerk of Court of the Regional Trial Court of Makati City is ordered to reassess and
determine the docket fees that should be paid by respondent, BNP, in accordance
with the Decision of this Court, and direct respondent to pay the same within
fifteen (15) days, provided the applicable prescriptive or reglementary period has
not yet expired. Thereafter, the trial court is ordered to proceed with the case with
utmost dispatch.

SO ORDERED.