G.R. No.

149227               December 11, 2003

LA SALETTE COLLEGE vs. VICTOR C. PILOTIN

FACTS:

Respondent Pilotin is a bona fide student of petitioner La Salette College, taking up the
degree of Bachelor of Science in Commerce. In the enrollment period, respondent was denied re-
enrollment. On November 16, 1993, he filed his complaint and asked for the issuance of a writ of
preliminary mandatory injunction to compel petitioner to re-admit him. On December 28, 1993,
an order was issued directing petitioner to admit respondent. Because of the adamant refusal of
petitioner in re-admitting him and the period of the second semester was already about to close,
respondent amended his complaint and concentrated on damages.

On November 17, 1998, the trial court rendered judgment in favor of respondent Pilotin.
Petitioner received the Decision on November 26, 1998. On the same date, they filed a Notice of
Appeal, which the RTC approved on December 2, 1998. Respondent moved for a
reconsideration thereof on the ground of petitioner’s failure to pay the docket fees within the
reglementary period. The trial court, however, denied the Motion in its April 23, 1999 Order.

Ruling of the Court of Appeals

CA dismissed the appeal filed by petitioners, because “the docket fees were only paid
after one (1) year and eleven (11) months from the filing of the notice of appeal.” Thus, in the
June 22, 2001 Resolution, it denied their Motion for Reconsideration.

ISSUE:
Whether or not the docket fees has been timely paid by the petitioner

RULING:

No. Docket fees are necessary to defray court expenses in the handling of cases. For this
reason, and to secure a just and speedy disposition of every action and proceeding, the Rules on
Civil Procedure mandates the payment of docket and other lawful fees within the prescribed
period. Otherwise, the jurisdiction of the proper court to handle a case is adversely affected.

In order to perfect an appeal from a decision rendered by the RTC in the exercise of its
original jurisdiction, the following requirements must be complied with:

FIRST, within 15 days, a notice of appeal must be filed with the court that rendered the
judgment or final order sought to be appealed; 

SECOND, such notice must be served on the adverse party; and 

THIRD, within the same 15-day period, the full amount of appellate court docket and
other legal fees must be paid to the clerk of the court that rendered the judgment or final order.
 Full payment of the appellate docket fees within the prescribed period is mandatory, even
jurisdictional, for the perfection of the appeal. Otherwise, the appellate court would not be able
to act on the subject matter of the action, and the decision or final order sought to be appealed
from would become final and executory.

To recapitulate, on November 26, 1998, petitioners received the November 17, 1998 RTC
Decision. Consequently, they had 15 days to file their Notice of Appeal. They did so on
November 26, 1998, but failed to pay the docket fees. A review of the records shows that they
paid these only on July 8, 1999, or after almost seven (7) months from the mandated last day for
payment, which was December 11, 1998. Clearly, the November 17, 1998 RTC Decision, which
petitioners sought to appeal, had long become final and executory.

Notwithstanding the mandatory nature of the requirement of payment of appellate docket

fees, its strict application is qualified by the following:

FIRST, failure to pay those fees within the reglementary period allows only
discretionary, not automatic, dismissal;

SECOND, such power should be used by the court in conjunction with its exercise of
sound discretion in accordance with the tenets of justice and fair play, as well as with a great deal
of circumspection in consideration of all attendant circumstances.

In Yambao v. Court of Appeals, it was declared that “the appellate court may extend the
time for the payment of the docket fees if appellant is able to show that there is a justifiable
reason for the failure to pay the correct amount of docket fees within the prescribed period, like
fraud, accident, mistake, excusable negligence, or a similar supervening casualty, without fault
on the part of the appellant.”

In the present case, petitioners have not shown any satisfactory reason to warrant the
relaxation of the Rules.

The payment of docket fees is not a mere technicality of law or procedure, but an
essential requirement for the perfection of an appeal. Perfection of an appeal within the statutory
or reglementary period is not only mandatory but also jurisdictional and failure to do so renders
the questioned decision final and executory, and deprives the appellate court of jurisdiction to
alter the final judgment much less to entertain the appeal.
2.
G.R. No. 171590, February 12, 2014
BIGNAY EX-IM PHILIPPINES, INC. vs. UNION BANK OF THE PIDLIPPINES

Facts:

In 1984, Alfonso de Leon mortgaged in favor of Union Bank of the Philippines real property
situated at Esteban Abada, Loyola Heights, Quezon City, which was registered in his and his
wife Rosario’s name. The property was foreclosed and sold at auction to Union Bank. After the
redemption period expired, the bank consolidated its ownership.

In 1988, Rosario filed against Alfonso and Union Bank, Civil Case No. Q-52702 for annulment
of the 1984 mortgage, claiming that Alfonso mortgaged the property without her consent, and for
reconveyance.

On December 20, 1989, a Deed of Absolute Sale was executed by and between Union Bank and
Bignay Ex-Im Philippines, Inc. whereby the property was conveyed to Bignay for ₱4 million.

On December 27, 1989, Bignay mortgaged the property to Union Bank, presumably to secure a
loan obtained from the Union Bank.

On December 12, 1991, a Decision was rendered in Civil Case No. Q-52702, finding that
Alfonso de Leon, Jr. had alone executed the mortgage on their conjugal property upon a forged
signature of his wife Rosario T. de Leon, the Court declared NULL and VOID the Mortgage
Contract executed by and between defendants Alfonso de Leon, Jr. alone and Union Bank of the
Philippines; and Sale and mortgage by and between Union Bank and Bignay Ex-Im Phil. Inc.

Meanwhile, as a result of the Decision in Civil Case No. Q-52702, Bignay was evicted from the
property; by then, it had demolished the existing structure on the lot and begun construction of a
new building.

On March 21, 1994, Bignay filed Civil Case No. 94-1129 for breach of warranty against
eviction under Articles 1547 and 1548 of the Civil Code, with damages, against Union Bank
and Robles. Bignay alleged in its Complaint that at the time of the sale, Union Bank represented
that there were no liens or encumbrances over the property other than those annotated on the
title, and that a reconstitution of the lost title would be made; that on these assurances, Bignay
began and completed construction of a building on the property; that it turned out that the
property was the subject of a case by Rosario, and that despite such demands to Union Bank for
the latter to make good on its warranties, it appeared that Bignay was in jeopardy of losing the
property as a result of Union Bank’s lack of candor and bad faith in not disclosing the pending
case.

Union Bank interposed a Motion to Dismiss grounded on lack of or failure to state a cause of
action, claiming that it made no warranties in favor of Bignay when it sold the property to
the latter on December 20, 1989. The trial court deferred the resolution of the motion on finding
that the ground relied upon did not appear to be indubitable. Union Bank thus filed its Answer
Ad Cautelam, where it alleged that Bignay was not an innocent purchaser for value, knowing
the condition of the property.

Union Bank interposed a counterclaim as well, grounded on two promissory notes in favor of
the bank – 1) Promissory Note No. 90-1446 dated December 20, 1990 for the amount of ₱1.5
million payable on demand with annual interest of 33%, and 2) Promissory Note No. 91-0286
dated February 26, 1991 for the amount of ₱2 million payable on demand with annual interest of
30% – which resulted in outstanding liabilities, inclusive of interest and penalties, in the total
amount of more than ₱10.4 million as of December 20, 1996. Evidence on Union Bank’s
counterclaim was likewise received by the trial court.

Ruling of the Regional Trial Court

The trial court held that Bignay was entitled to the return of the value of the property (₱4
million), as well as the cost of the building erected thereon (₱20 million), since Union Bank
acted in bad faith. At the same time, the trial court held that the bank’s counterclaim was not at
all connected with Bignay’s Complaint , which makes it a permissive counterclaim for
which the docket fees should accordingly be paid . Since the bank did not pay the docket
fees, the trial court held that it did not acquire jurisdiction over its counterclaim; thus, it
dismissed the same.

Ruling of the Court of Appeals

Regarding the bank’s counterclaim, the CA held that Union Bank timely paid the docket
fees therefor – amounting to ₱32,940.00 – at the time it filed its Answer Ad Cautelam on
November 4, 1994, as shown by Official Receipt Nos. 4272579 and 4271965 to such effect
and the rubberstamped mark on the face of the answer itself. It added that since the trial
court received the bank’s evidence on the counterclaim during trial, it should have made a
ruling thereon.

Thus, the Court of Appeals rendered judgment ordering Bignay to pay Union Bank the principal
amount of ₱1,500,000.00 under Promissory Note No. 90-1446 dated December 18, 1990, plus
the stipulated interests and stipulated penalty charges from date of maturity of the loan or from
June 6, 1991 until its full payment and also to pay the principal amount of ₱2,000,000.00 under
Promissory Note No. 90-0286 dated February 25, 1991, plus the stipulated interests and
stipulated penalty charges from date of maturity of the loan or from August 26, 1991 until full
payment thereof.

Bignay filed its Motion for Partial Reconsideration questioning the appellate court’s ruling on
Union Bank’s counterclaim. The CA denied the motion. Thus, the present petition.

The Parties’ Respective Arguments

Bignay registers its doubts as to whether Union Bank indeed paid the docket fees on its
permissive counterclaim, arguing that if the bank indeed paid the docket fees, the trial court
would have so held in its March 21, 2000 Decision; instead, it specifically declared therein that
the docket fees on the counterclaim remained unpaid at that point in time. In other words, Bignay
appears to insinuate that there was an irregularity surrounding the bank’s alleged payment of the
docket fees on its counterclaim.

In its Comment, Union Bank insists that it timely paid the docket fees on its counterclaim,
arguing that the official receipts proving payment as well as the rubber stamp-mark on the
face of its answer may not be overturned by Bignay’s baseless suspicions, claims and
insinuations not supported by controverting evidence or proof. It adds that, contrary to
Bignay’s assertion, a separate case for the prosecution of its counterclaim is unnecessary since
the same may sufficiently be tried in Civil Case No. 94-1129 precisely as a permissive
counterclaim; and by allowing its permissive counterclaim, multiplicity of suits is avoided.

In a Reply to the bank’s Comment, Bignay among others vehemently insists that at the time of
the rendition of the trial court’s judgment in Civil Case No. 94-1129, Union Bank had not yet
paid the docket fees on its counterclaim; the bank’s claim that it paid the docket fees when
it filed its Answer Ad Cautelam is absolutely questionable. If indeed the bank paid the docket
fees, then it should have questioned the trial court’s dismissal of its counterclaim in a motion for
reconsideration and attached the receipts showing its payment of the fees; yet it did not. Besides,
if indeed the fact of payment of docket fees was stamped on the face of the bank’s Answer Ad
Cautelam when it filed the same, the trial court should have noticed it, or at least its attention
would have been directed to the fact; but it was not. And if indeed the docket fees were paid as
early as 1994, it is incredible how Union Bank never informed the trial court of its payment,
even after the adverse Decision in the case was rendered.
Issue:
In the event of non-payment of docket fees for permissive counterclaims, can the court dismiss
the said counterclaims? Yes.

Ruling:

The Court finds for Bignay. The Court resolves that the Decision and Resolution of the Court of
Appeals are modified, in that Union Bank of the Philippines's counterclaim is ordered
DISMISSED.

The Court disagrees with the CA on the issue of Union Bank’s counterclaim. Bignay
correctly observes that if the bank indeed paid the docket fees therefor, the trial court would have
so held in its March 21, 2000 Decision; yet in its judgment, the trial court specifically declared
that the docket fees remained unpaid at the time of its writing, thus –

Anent the counterclaims interposed by defendant for the collection of certain sum of
money adverted earlier hereof [sic], this Court could not exercise jurisdiction over the
same as defendant did not pay the docket fees therefor. Although the counterclaims
were denominated as compulsory in the answer, the matters therein alleged were
not connected with the plaintiff’s complaint. The counterclaims could stand
independently from the plaintiff’s complaint hence they are a [sic] permissive
counterclaims. During the pre-trial, this Court had already ruled that the counterclaims
 were permissive yet the records showed that defendant had not paid the docket fees. This
Court therefore has not acquired jurisdiction over said case.
And if it is true that the bank paid the docket fees on its counterclaim as early as in 1994, it
would have vigorously insisted on such fact after being apprised of the trial court’s March
21, 2000 Decision. It is indeed surprising that the supposed payment was never raised by the
bank in a timely motion for reconsideration, considering that the trial court dismissed its
counterclaim; if there is any opportune time to direct the court’s attention to such payment and
cause the counterclaim to be reinstated, it was at that point and no other. All it had to do was
prove payment by presenting to the court the official receipts or any other acceptable
documentary evidence, and thus secure the proper reversal of the ruling on its counterclaim. Still,
nothing was heard from the bank on the issue, until it filed its brief with the CA on appeal.
Indeed, "whatever is repugnant to the standards of human knowledge, observation and
experience becomes incredible and must lie outside judicial cognizance."

More than the above, this Court finds true and credible the trial court's express
declaration that no docket fees have been paid on the bank's counterclaim; the trial court's
pronouncement enjoys the presumption of regularity. Indeed, the sudden appearance of the
receipts supposedly evidencing payment of the "docket fees is highly questionable and irregular,
and deserves to be thoroughly investigated; the actuations of the bank relative thereto go against
the common experience of mankind, if they are not entirely anomalous.

3.

Manchester Development Corp., ET, Al., vs. CA

G.R. No. 75919, May 7, 1987

Facts:
The petitioners filed a motion for reconsideration against the resolution of SC’s 2 nd Division and
another motion for the case to be heard for oral argument by the Court en banc.
Petitioners contend that filing fee must be assessed on the basis of the amended complaint and
not the original complaint. They cited the case of Magaspi vs Ramolete which the Court
differentiated it to the present case.
In general, Magaspi case was an action for recovery of ownership and possession of a parcel of
land with damages while Manchester case is an action for torts and damages and specific
performance with prayer of TRO.
In Magaspi Case, the complaint prays for: 1) annulment of title of the defendant to the property,
2) declaration of ownership, and 3) delivery of possession to the plaintiff with prayers of 4)
actual, moral, exemplary, and attorney’s fees. In Manchester, the prayer is for: 1) issuance of a
writ of preliminary injunction against the defendant for announcing forfeiture of 1.3M paid by
the plaintiff, 2) to attach property of defendant in order to satisfy any judgment that may be
rendered, and 3) to execute a contract of purchase and sale of the subject property including 4)
actual, compensatory and exemplary damages. The amount in Manchester is not provided in the
prayer but the body of the complaint alleges 78M as damages.
In Magaspi Case, (There is an honest difference of opinion), the complaint was considered
primarily as an action for recovery of ownership and possession of a parcel of land. The damages
were treated as merely to the main cause of action and consequently, the docket fee was only P60
and P10 for sheriff’s fee. In Manchester (there is no honest difference of opinion), the
allegations of the complaint and its designation considered the complaint as both an action for
damages and specific performance. Further in Manchester, the docket fee paid upon filing of
complaint amounts only to P410 by considering the action as only for specific performance. The
SC held that although the total amount of damages is not stated in the prayer, the body shows a
total of 78M as damages. Thus, it was erroneous to assess docket fee based only on the prayer of
specific performance.
In Magaspi Case, the trial court in assessment of fees did not consider the damages to be merely
an or incidental to the action for recovery of ownership and possession of real property. In
Manchester, the Trial court directed plaintiffs to rectify the complaint by fixing the amount they
are asking. Still no amount was specified in the prayer after they fixed the amount in the body
from 78M to 10M.
Issue:
Should the docket fees be based in the original or amended complaint?
Ruling:
[The decision discussed its ruling with the facts.] However, it can be gleaned from the
differentiation of Manchester and Magaspi Case that the docket fees must be based on the
original complaint and not the amended complaint. In Magaspi Case, the docket fee was
based on the amended complaint only because of the honest difference of opinion. In Manchester
case, there is no honest difference of opinion which is why the docket fee was based on the
original complaint.
5.
GO vs. TONG G.R. No. 151942. November 27, 2003

FACTS:

"Petitioner Juana Tan Go (petitioner Juana) purchased a cashier’s check dated September 13,
1996 from the Far East Bank and Trust Company (FEBTC) Lavezares, Binondo Branch in the
amount of P500,000.00, payable to Johnson Y. Tong (private respondent).

"On petitioner Juana’s instruction, the cashier’s check bore the words ‘Final Payment/Quitclaim’
after the name of payee private respondent allegedly to insure that private respondent would
honor his commitment that he would no longer ask for further payments for his interest in the
‘informal business partnership’ which he and she had earlier dissolved.

"After the check was delivered to private respondent, he deposited it with the words ‘Final
Payment/Quitclaim’ already erased, hence, it was not honored.

"Private respondent’s counsel subsequently wrote the manager of FEBTC Lavezares Branch
informing that the words ‘Final Payment/Quitclaim’ on the check had been ‘inadvertently erased
without being initialed by your bank or the purchaser thereof’ and thus requesting that the check
be replaced with another payable to ‘Johnson Tong-Final Settlement/Quitclaim’ with the same
amount, the bank charges therefor to be paid by his client-private Respondent.

"FEBTC did not grant the request of private respondent’s counsel, hence, private respondent
filed a complaint against FEBTC and petitioner Juana and her husband Gregorio Go at the
Manila RTC, for sum of money, damages, and attorney’s fees, subject of the case at bar.

"Answering the Complaint, therein defendants-herein petitioners Juana and her husband and
FEBTC alleged that the erasure of the words ‘Final Payment/Quitclaim’ was intentional on
private respondent’s part, reflective of his intention to collect more from petitioner Juana, hence,
the non-issuance of a replacement check was justified, unless private respondent was sincere in
abiding with the ‘terms agreed upon.’

"During the pendency of the case, petitioner’s son, George Tan Go, filed a criminal complaint
against private respondent for falsification of the check. The criminal complaint was dismissed,
however, by the Manila Prosecutor’s Office.

"On July 17, 1998, private respondent requested public respondent for leave to file Supplemental
Complaint. Acting on the request, public respondent suggested to him ‘to file a Motion to admit’
within fifteen (15) days, copy furnished petitioners who were given the same number of days
from receipt to file their Comment.

"On August 25, 1998, private respondent filed a ‘Motion for Leave to File a Supplemental
Complaint and to Admit the Attached Supplemental Complaint’ which Supplemental Complaint
alleged that petitioners ‘used’ their son to file the criminal complaint for falsification against him
which caused damages, hence, the prayer for an increase in the amount of moral and exemplary
damages sought to be recovered from P2.5 million to P55 million and praying for the award of
actual damages of P58,075.00. The motion was set for hearing on September 4, 1998. Copy of
the motion to petitioners was sent by registered mail.

"Public respondent, by Order of September 4, 1998, noting that petitioners had been furnished
copy of the ‘Motion for Leave’ . . . but that there had been no comment thereon, granted the
motion and admitted the Supplemental Complaint.

"Petitioners and FEBTC’s Comment-Opposition were subsequently filed.

"Petitioners and FEBTC filed their respective Motions for Reconsideration of the September 4,
1998 Order.

"On November 18, 1998, petitioners filed a Manifestation of Deposit and deposited to the RTC
Clerk of Court the amount of P500,000.00 representing the amount of the check, ‘subject to the
condition that it shall remain deposited until the disposition of the case.’

"Petitioners’ and FEBTC’s separate Motions for Reconsideration of the September 4, 1998 Order
were later denied by Order of December 4, 1998, hence, petitioners filed their Answer dated
December 18, 1998 to the Supplemental Complaint with Counterclaim, alleging as Special
Affirmative defenses the following:chanrob1es virtual 1aw library

‘5. As already intimated, the defendants are not a party to the aforementioned criminal
complaint, but only their son George who took it upon himself to file it in his own right, without
their involvement in any way, hence, said incident cannot be pleaded as supplement to the
original complaint, much less as a new cause of action without impleading George Go as party
defendant.

‘6. Plaintiff cannot prosecute his Supplemental Complaint, and the same should be dismissed,
unless the corresponding docket fee and legal fees for the monetary claims in the amount of
P55,057,075.00 are paid for. . . .’

"On February 5, 1999, public respondent, acting on the verbal manifestation/motion of private
respondent’s counsel, allowed the release of petitioners’ P500,000.00 deposit to
private Respondent.

"By order of November 17, 1999, public respondent, ‘in the interest of justice and because of the
huge amount of outlay involved (the Court considers the business climate and the peso crunch
prevailing),’ allowed private respondent to first deposit P25,000.00 on or before December 15,
1999 and P20,000.00 every month thereafter until the full amount of docket fees is paid, and
‘only then shall the deposits be considered as payment of docket fees.’

"Petitioners filed a Motion for Reconsideration of the November 17, 1999 Order which was, by
Order of April 11, 2000, denied.

"Thus arose the present petition filed on May 30, 2000 which ascribes to public respondent the
commission of grave abuse of discretion in issuing the Orders of February 5, 1999 (allowing the
release of the P500,000.00 deposit to private respondent), November 17, 1999 (allowing the
payment, on staggered basis, of the docket fees for the Supplemental Complaint) and April 11,
2000 (denying the Motion for Reconsideration of the November 17, 1999 Order)."

CA:
Petitioners alleged that respondent judge committed grave abuse of discretion when he issued the
Orders dated February 5, 1999, 5 November 17, 1999 6 and April 11, 2000

According to the CA, petitioners failed to assail, within the prescribed period, respondent judge’s
February 5, 1999 Order allowing the release of the money deposited by them. It was only in their
May 30, 2000 Petition before the CA that they questioned the Order. Moreover, the appellate
court held that, anyway, private respondent was entitled to the deposit, which represented the
amount indicated on the check that belonged to him.

As to the November 17, 1999 Order allowing private respondent to pay the docket fee on a
staggered basis and the April 11, 2000 Order denying the Motion for Reconsideration thereof,
the CA held that "Sun Insurance Office Ltd. . . . permits the payment of the prescribed docket fee
within a reasonable period but in no case beyond the applicable prescriptive or regular period." 8
In that case, the court a quo opined that the docket fee payment scheme imposed by the
respondent judge "cannot be said to have been issued with grave abuse of discretion."

ISSUES:

1. Was the mode of appeal proper?

RULING:
A petition for certiorari under Rule 65 of the Revised Rules of Court may be filed under the
following condition:jgc:chanrobles.com.ph

"When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted
without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack
or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in
the ordinary course of law . . . ."

On the other hand, Rule 45 prevails under this circumstance:jgc:chanrobles.com.ph

"A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court
of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by
law, may file with the Supreme Court a verified petition for review on certiorari. . . . ."

Rule 45 of the Rules of Court specifically states that in all cases, the CA’s decisions, final orders
or resolutions — regardless of the nature of the action or proceedings involved — may be
appealed to this Court through a petition for review, which is just a continuation of the appellate
process involving the original case. 15 On the other hand, a special civil action under Rule 65 is
an independent suit based on the specific grounds provided therein. As a general rule, certiorari
cannot be availed of as a substitute for the lost remedy of an ordinary appeal, including that
under Rule 45.

Very recently, in Fortune Guarantee and Insurance Corporation v. CA, 17 this Court had the
occasion to discuss this matter. In that case, the petitioner alleged grave abuse of discretion on
the part of the respondent trial court judge when the latter issued the assailed Order granting a
Motion for Execution Pending Appeal. Said the Court in that case:

" [I]t must be pointed out that petitioner adopted the wrong mode of appeal in bringing this case
before us. The proper remedy of a party aggrieved by a decision of the Court of Appeals is a
petition for review under Rule 45 which is not similar to a petition for certiorari under Rule 65 of
the Rules of Court. . . ."

In the present case, petitioners are appealing a final decision of the CA by resorting to Rule 65,
when their remedy should be based on Rule 45. When an error of judgment of the CA is brought
up to this Court for review, the action is properly designated as a petition for review and not a
special civil action. 20 Thus, while the instant Petition is one for certiorari under Rule 65 of the
Rules of Court, the assigned errors are more properly addressed in a petition for review under
Rule 45.

Accordingly, when parties adopt an improper remedy, as in this case, their petitions may be
dismissed outright. 21 However, in the interest of substantial justice, we deem it wise to overlook
procedural technicalities in order to rule speedily on this case 22 and demonstrate that even
without the procedural infirmity, the Petition should be rejected due to its lack of merits.
2. Did respondent judge commit grave abuse of discretion when he issued the February 5, 1999
Order allowing the release of their P500,000 bank deposit?

RULING:
It is undeniable that petitioners actively prosecuted their case during the period when they were
allegedly still ignorant of the existence of the Order dated February 5, 1999. Whether such
ignorance was due to negligence or mere oversight will not release them from its effects.

More important, the CA was correct in holding that, ultimately, private respondent was entitled
to the deposit, because it represented the amount indicated on the check that undeniably
belonged to him. In all the pleadings they filed, petitioners never denied that the amount of
P500,000 properly belonged to him.

3. Did respondent judge and the CA err in allowing private respondent to pay the docket fee on
a staggered basis?

RULING:
Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement, even its
nonpayment 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; 36 more so when the
party involved demonstrates a willingness to abide by the rules prescribing such payment. 37

While the cause of action of private respondent was supposed to prescribe in four (4) years, 38
he was allowed to pay; and he in fact paid the docket fee in a year’s time. 39 We do not see how
this period can be deemed unreasonable. Moreover, on his part there is no showing of any pattern
or intent to defraud the government of the required docket fee. We sustain the CA’s findings
absolving respondent judge of any capricious or whimsical exercise of judgment equivalent to
lack of jurisdiction. Ruled the appellate court:jgc:chanrobles.com.ph

"The Sun Insurance Office Ltd. case permits the payment of the prescribed docket fee ‘within a
reasonable period but in no case beyond the applicable prescriptive or regular period.’ Since the
prescriptive period to file the complaint subject of the present petition which is an action upon an
injury to the right of private respondent, is four years and the scheme of payment of the docket
fees in the amount of P252,503.50 given by public respondent called for an implementation
thereof within one year, as in fact private respondent manifested in his Rejoinder that he had
fully paid the said amount on December 12, 2000, then the assailed Orders of November 17,
1999 and April 11, 2000 cannot be said to have been issued with grave abuse of discretion." 40
(Citations omitted)

To be sure, for certiorari to lie against respondent judge, the abuse of discretion committed must
be grave, as when power is exercised arbitrarily or despotically by reason of passion or personal
hostility; and such exercise must be so patent and gross as to amount to an evasion of positive
duty, or to a virtual refusal to perform it or to act in contemplation of law. 41 These conditions
are absolutely wanting in the present case.

4. Did respondent judge commit grave abuse of discretion for not inhibiting himself from this
case and for not suspending the proceedings in the RTC pending the resolution fo the Petition
for Certiorari before the appellate court.

RULING:

The court enunciated that these questions need not be taken into account of since they were never
raised before the CA. It is well-settled that parties are not permitted to raise before this Court
issues that were not taken up below.

WHEREFORE, the Petition is hereby DENIED, and the assailed Decision and Resolution
AFFIRMED. Costs against petitioners.chanrob1es virt
6. Korea Technologies Co. Ltd. v. Lerma,
G.R. No. 143581,
January 7, 2008
P.S. this is a long case full of different concepts
FACTS:
March 5, 1997: PGSMC and KOGIES executed a Contract whereby KOGIES would set up an
LPG Cylinder Manufacturing Plant in Carmona, Cavite. The contract was executed in the
Philippines.
 April 7, 1997: the parties executed, in Korea, an Amendment for Contract amending the terms
of payment.
The contract and its amendment stipulated that KOGIES will ship the machinery and facilities
necessary for manufacturing LPG cylinders.  KOGIES would install and initiate the operation of
the plant. In total, PGSMC would pay  USD 1,530,000.
PGSMC entered into a contract of lease with Worth Properties Inc. for the use of a property to
house the LPG manufacturing plant. Subsequently, the machineries, equipment, and facilities for
the manufacture of LPG cylinders were shipped, delivered, and installed in the Carmona plant.
PGSMC paid KOGIES USD 1,224,000.
January 2, 1998: after the installation of the plant, the initial operation could not be conducted
as PGSMC encountered financial difficulties affecting the supply of materials, thus forcing the
parties to agree that KOGIES would be deemed to have completely complied with the terms and
conditions of the March 5, 1997 contract.
For the payment of the balance, PGSMC issued two postdated checks. When KOGIES deposited
the checks, these were dishonored for the reason "PAYMENT STOPPED." Demand for payment
were made. PGSMC faxed a letter to KOGIES stating that they delivered a different brand of
hydraulic press and there were non-delivered equipment.
May 14, 1998: PGSMC replied to KOGIES about the checks that it was fully funded. However
payments were stopped again.
June 1, 1998: PGSMC informed KOGIES that PGSMC was canceling their Contract dated
March 5, 1997 on the ground that KOGIES had altered the quantity and lowered the quality of
the machineries and equipment it delivered to PGSMC, and that PGSMC would dismantle and
transfer the machineries, equipment, and facilities installed in the Carmona plant. 5 days later,
PGSMC filed a case for ESTAFA against KOGIES.
June 15, 1998: KOGIES wrote PGSMC informing the latter that PGSMC could not unilaterally
rescind their contract nor dismantle and transfer the machineries and equipment on mere
imagined violations by KOGIES. It also insisted that their disputes should be settled by
arbitration as agreed upon in Article 15, the arbitration clause of their contract.
KOGIES wrote PGSMC informing the latter that PGSMC could not unilaterally rescind their
contract nor dismantle and transfer the machineries and equipment on mere imagined violations
by KOGIES. 
July 1, 1998: KOGIES instituted an Application for Arbitration before the Korean Commercial
Arbitration Board pursuant to Art. 15 of the contract.
July 3, 1998: KOGIES also filed an action for Specific Performance against PGSMC. KOGIES
alleged that PGSMC had initially admitted that the checks that were stopped were not funded but
later on claimed that it stopped payment of the checks for the reason that "their value was not
received" as the former allegedly breached their contract by "altering the quantity and lowering
the quality of the machinery and equipment" installed in the plant and failed to make the plant
operational although it earlier certified to the contrary. KOGIES also averred that PGSMC
violated Art. 15 of the contract entered into between them. A writ of preliminary injunction was
prayed for in order to prevent PGSMC from dismantling the machinery
PGSMC CONTENTION: PGSMC contended that Art. 15 of the contract is null and void for
being against public policy as it ousts the courts of jurisdiction over the instant controversy. It
argued that it can remove the equipment in the property because it had the right so as it had
already been paid in full as stipulated in the contract. KOGIES is not also entitled to the two
checks for failing to completely install and make the plant operational. KOGIES should also be
liable for altering the quality and quantity of the machinery and equipment.
RTC RULING ON THE WRIT OF PRELIMINARY INJUNCTION:
RTC denied the application for the writ of preliminary injunction stating that PGSMC had full
rights over the equipment and machinery since it was already fully paid.
KOGIES CONTENTION: JULY 29, 1998: KOGIES filed its Reply to Answer and Answer to
Counterclaim denying the allegation of PGSMC. It had performed all the undertakings under the
contract . whatever was unfinished was PGSMC’s fault as it was not able to act due to lack of
funds. Also that Art. 15 or ARBITRATION CLAUSE was valid.
AUGUST 4, 19998: PGSMC counterclaims against KOGIES
KOGIES filed a motion to dismiss on the counterclaims against them by PGSMC and a TRO in
order to prevent PGSMC from dismantling the plant.
PGSMC filed for a Motion for inspection of things to determine the quality and quantity of the
equipment which KOGIES opposed to as it was under the coverage of the arbitration clause.
RTC DECISION:
RTC denied the motion to dismiss on the counterclaims against KOGIES as it fell within the
requisites of compulsory counterclaim. The Motion for Inspection was also granted. The motion
for reconsideration filed by KOGIES was denied. Art. 15 of the Contract between the parties was
deemed invalid as it is intended to oust the trial court or any other court jurisdiction over any
dispute that may arise between the parties. 
KOGIES filed a petition for certiorari, prohibition and preliminary injunction before the Court of
Appeals.

CA DECISION:
CA affirmed the decision of the RTC stating that Art. 15 of the contract was indeed invalid for
being violative of public policy. It affirmed also the finding of the lower court that PGSMC did
fully pay the whole amount of the obligation to be paid to KOGIES. The CA agreed with the
lower court that an arbitration clause which provided for a final determination of the legal rights
of the parties to the contract by arbitration was against public policy.
On the issue of nonpayment of docket fees and non-attachment of a certificate of non-forum
shopping by PGSMC, the CA held that the counterclaims of PGSMC were compulsory ones and
payment of docket fees was not required since the Answer with counterclaim was not an
initiatory pleading. For the same reason, the CA said a certificate of non-forum shopping was
also not required.
CA also noted that the petition was premature as KOGIES failed to wait for the resolution of the
MR filed before the RTC.

ISSUE:
Whether or not the non payment of docket fees and absence of non forum shopping is required in
a counterclaim.
Whether or not Art. 15 is invalid.

HELD:
PAYMENT OF DOCKET FEES AND FILING OF NON FORUM SHOPPING
July 17, 1998, at the time PGSMC filed its Answer incorporating its counterclaims against
KOGIES, it was not liable to pay filing fees for said counterclaims being compulsory in nature.
However, August 16, 2004, on the amendment of Sec. 7 Rule 141, docket fees now are require to
be paid in compulsory counterclaims or cross claims.
As to the failure to submit a certificate of forum shopping, PGSMC’s Answer is not an initiatory
pleading which requires a certification against forum shopping.  It is a responsive pleading,
hence, the courts a quo did not commit reversible error in denying KOGIES’ motion to dismiss
PGSMC’s compulsory counterclaims.

ARTICLE 15/ ARBITRATION CLAUSE OF THE CONTRACT

Established in this jurisdiction is the rule that the law of the place where the contract is made
governs. Lex loci contractus. The contract in this case was perfected here in the Philippines.
Therefore, our laws ought to govern. Nonetheless, Art. 2044 of the Civil Code sanctions the
validity of mutually agreed arbitral clause or the finality and binding effect of an arbitral award.
"Any stipulation that the arbitrators’ award or decision shall be final, is valid, without
prejudice to Articles 2038, 2039 and 2040."
The arbitration clause was mutually and voluntarily agreed upon by the parties. It has not been
shown to be contrary to any law, or against morals, good customs, public order, or public policy.
There has been no showing that the parties have not dealt with each other on equal footing. We
find no reason why the arbitration clause should not be respected and complied with by both
parties.

ART. 15 NOT CONTRARY TO PUBLIC POLICY

In a catena of cases, the SC stated that the arbitration clause is not contrary to public policy. As
to quote: Arbitration clause to resolve differences and breaches of mutually agreed contractual
terms is valid; "[i]n this jurisdiction, arbitration has been held valid and constitutional.
Even before approval of RA 876, the Supreme Court countenanced the settlement of disputes
through arbitration. It unclogs judicial dockets, hastens resolution of disputes.
Since it is not against public policy, arbitral panels will be constituted in a foreign country and
the rules would govern and awards shall be final and binding.

RTC MUST REFER ARBITRATION IN PROPER CASES

Since RTC does not have jurisdiction over disputes that are subject of arbitration, law mandates
that the court refer the matter to arbitration.

FOREIGN ARBITRAL AWARDS NEED TO BE CONFIRMED BY THE RTC

Even if mutually stipulated by the parties in the arbitration clause and final and binding, it cannot
be implemented immediately. It must be proven by the party who will present it before the
judicial court.
Foreign arbitral awards when confirmed by the RTC are deemed not as a judgment of a foreign
court but as a foreign arbitral award, and when confirmed, are enforced as final and executory
decisions of our courts of law.
PROCEDURE ON ASSAILING VALIDITY OF ARBITRAL AWARDS
Sec. 34 of RA 9285 vests power on the RTC with specific authority and jurisdiction to set aside,
reject or vacate a foreign arbitral awards on grounds provided for by Art. 34 of the UNCITRAL
MODEL LAW.
It is not the SC who will initially entertain the validity of an arbitral award but the RTC.
The matter, after being decided upon by the RTC, can be appealed before CA and eventually
before the Supreme Court.
UNILATERAL RESCISSION IMPROPER AND ILLEGAL
Having ruled that the arbitration clause of the subject contract is valid and binding on the parties,
and not contrary to public policy; consequently, being bound to the contract of arbitration, a
party may not unilaterally rescind or terminate the contract for whatever cause without first
resorting to arbitration.
 Where an arbitration clause in a contract is availing, neither of the parties can unilaterally treat
the contract as rescinded since whatever infractions or breaches by a party or differences arising
from the contract must be brought first and resolved by arbitration, and not through an
extrajudicial rescission or judicial action.
RTC then erred in granting the MOTION for inspection as it was under the primary jurisdiction
of KCAB in Korea, the arbitral body.

OWNERSHIP ON THE PLANT

It was improper for KOGIES to assail the ownership of the plant before CA and SC as the
petition for certiorari (rule 65) and the appellate courts do not deliberate on factual issues.
However, the SC stated that there error on the part of RTC in determining ownership of the plant
as it was supposed to be KCAB who will determine such.

RTC INTERIM JURISDICTION

Even if the SC stated that the matter should have been referred to arbitration, it does not mean
that RTC does not have interim jurisdiction over the matter.
RTC has jurisdiction to hear and grant interim measures to protect vested rights of the parties. It
is in order:

(i) to prevent irreparable loss or injury;

(ii) to provide security for the performance of any obligation;

(iii) to produce or preserve any evidence; or

(iv) to compel any other appropriate act or omission.

Even if ownership was not yet determined, the possession was under PGSMC. It had all the right
to dismantle all of the equipment and machineries either for their protection and preservation or
for the better way to make good use of them which is ineluctably within the management
discretion of PGSMC. It will be thus mandatory that PGSMC preserve it until final resolution of
the arbitral proceedings.
7.
JUANA COMPLEX I HOMEOWNERS’ ASSOCIATION, INC. et al v. FIL-ESTATE
LAND, INC. et al
G.R. No. 152272, March 5, 2012

FACTS:
On January 20, 1999, Juana Complex I Homeowners Association, Inc. (JCHA), together with
individual residents of Juana Complex I and other neighboring subdivisions instituted a complaint for
damages, in its own behalf and as a class suit representing the regular commuters and motorists of
Juana Complex I and neighboring subdivisions who were deprived of the use of La Paz Road.

The complaint alleged that Fil-estate excavated, broke and deliberately ruined La Paz Road
and that La Paz Road was restored by the residents to make it passable but Fil-estate excavated the
road again. The act of Fil-estate in excavating La Paz Road caused damage, prejudice,
inconvenience, annoyance, and loss of precious hours to them, to the commuters and motorists
because traffic was re-routed to narrow streets that caused terrible traffic congestion and hazard;
and that its permanent closure would not only prejudice their right to free and unhampered use of the
property but would also cause great damage and irreparable injury.

Petitioners prayed for the immediate issuance of a Temporary Restraining Order (TRO) or a

writ of preliminary injunction (WPI) to enjoin Fil-Estate, et al. from stopping and intimidating them in
their use of La Paz Road. Fil-Estate, et al. filed a motion to dismiss arguing that the complaint failed
to state a cause of action and that it was improperly filed as a class suit. The RTC issued an
Order granting the WPI and required JCHA, et al. to post a bond. On the other hand, Fil-Estate, et al.
filed a motion for reconsideration arguing, among others, that JCHA, et al. failed to satisfy the
requirements for the issuance of a WPI, which was denied by the RTC.

Not satisfied, Fil-Estate, et al. filed a petition for certiorari and prohibition before the CA to
annul the order of the RTC. They contended that the complaint failed to state a cause of action and
that it was improperly filed as a class suit. With regard to the issuance of the WPI, the defendants
averred that JCHA, et al. failed to show that they had a clear and unmistakable right to the use of La
Paz Road; and further claimed that La Paz Road was a torrens registered private road and there
was neither a voluntary nor legal easement constituted over it. the CA rendered the decision partially
granting the petition.

ISSUE:
(1) whether or not the complaint states a cause of action.
(2) whether the complaint has been properly filed as a class suit.
(3) whether or not a WPI is warranted.

RULING:
(1) Yes. The Court finds the allegations in the complaint sufficient to establish a cause of action.

Section 2, Rule 2 of the Rules of Court defines a cause of action as an act or omission by
which a party violates the right of another. A complaint states a cause of action when it contains
three (3) essential elements of a cause of action, namely:

(1) the legal right of the plaintiff,

(2) the correlative obligation of the defendant, and
(3) the act or omission of the defendant in violation of said legal right.
 The question of whether the complaint states a cause of action is determined by its
averments regarding the acts committed by the defendant. Thus, it must contain a concise statement
of the ultimate or essential facts constituting the plaintiff’s cause of action. To be taken into account
are only the material allegations in the complaint; extraneous facts and circumstances or other
matters aliunde are not considered.

The test of sufficiency of facts alleged in the complaint as constituting a cause of action is
whether or not admitting the facts alleged, the court could render a valid verdict in accordance with
the prayer of said complaint. Stated differently, if the allegations in the complaint furnish sufficient
 

basis by which the complaint can be maintained, the same should not be dismissed regardless of
the defense that may be asserted by the defendant.

In the present case, the Court finds the allegations in the complaint sufficient to establish a
cause of action. First, JCHA, et al.’s averments in the complaint show a demandable right over La
Paz Road. These are: (1) their right to use the road on the basis of their allegation that they had
been using the road for more than 10 years; and (2) an easement of a right of way has been
constituted over the said roads. There is no other road as wide as La Paz Road existing in the
vicinity and it is the shortest, convenient and safe route towards SLEX Halang that the commuters
and motorists may use. Second, there is an alleged violation of such right committed by Fil-Estate, et
al. when they excavated the road and prevented the commuters and motorists from using the
same. Third, JCHA, et al. consequently suffered injury and that a valid judgment could have been
rendered in accordance with the relief sought therein.

(2) Yes.

The necessary elements for the maintenance of a class suit are: 1) the subject matter of
controversy is one of common or general interest to many persons; 2) the parties affected are so
numerous that it is impracticable to bring them all to court; and 3) the parties bringing the class suit
are sufficiently numerous or representative of the class and can fully protect the interests of all
concerned.

In this case, the suit is clearly one that benefits all commuters and motorists who use La Paz
Road. As succinctly stated by the CA:

The subject matter of the instant case, i.e., the closure and excavation of the La Paz Road, is
initially shown to be of common or general interest to many persons. The records reveal that
numerous individuals have filed manifestations with the lower court, conveying their intention
to join private respondents in the suit and claiming that they are similarly situated with private
respondents for they were also prejudiced by the acts of petitioners in closing and
excavating the La Paz Road. Moreover, the individuals sought to be represented by private
respondents in the suit are so numerous that it is impracticable to join them all as parties and
be named individually as plaintiffs in the complaint. These individuals claim to be residents of
various barangays in Biñan, Laguna and other barangays in San Pedro, Laguna.

(3) No. JCHA, et al. failed to establish a prima facie proof of violation of their right to justify the
issuance of a WPI. Their right to the use of La Paz Road is disputable since they have no clear legal
right therein.

A writ of preliminary injunction is available to prevent a threatened or continuous

irremediable injury to parties before their claims can be thoroughly studied and adjudicated. The
requisites for its issuance are: (1) the existence of a clear and unmistakable right that must be
protected; and (2) an urgent and paramount necessity for the writ to prevent serious damage. For
the writ to issue, the right sought to be protected must be a present right, a legal right which must be
shown to be clear and positive. This means that the persons applying for the writ must show that
they have an ostensible right to the final relief prayed for in their complaint.

The case should be further heard by the RTC so that the parties can fully prove their
respective positions on the issues.1âwphi1

8.

IRENE SANTE AND REYNALDO SANTE vs. HON. EDILBERTO T. CLARAVALL, in

his capacity as Presiding Judge of Branch 60, Regional Trial Court of Baguio City, and
VITA N. KALASHIAN
G.R. No. 173915 | February 22, 2010 | FIRST DIVISION | VILLARAMA, JR., J.

FACTS:
On April 5, 2004, respondent Vita Kalashian filed before the RTC of Baguio City a complaint
for damages against petitioners Irene and Reynaldo Sante. Respondent alleged that while she was
inside the Police Station of Natividad, Pangasinan, and in the presence of other persons and
police officers, petitioner Irene Sante uttered words, which when translated in English are as
follows, "How many rounds of sex did you have last night with your boss, Bert? You fuckin’
bitch!" Bert refers to Albert Gacusan, respondent’s friend and one (1) of her hired personal
security guards detained at the said station and who is a suspect in the killing of petitioners’ close
relative. Petitioners also allegedly went around Natividad, Pangasinan telling people that she is
protecting and cuddling the suspects in the aforesaid killing. Thus, respondent prayed that
petitioners be held liable to pay moral damages in the amount of ₱300,000.00; ₱50,000.00 as
exemplary damages; ₱50,000.00 attorney’s fees; ₱20,000.00 litigation expenses; and costs of
suit.

Petitioners filed a Motion to Dismiss on the ground that it was the Municipal Trial Court in
Cities (MTCC) and not the RTC of Baguio, that had jurisdiction over the case. They argued that
the amount of the claim for moral damages was not more than the jurisdictional amount of
₱300,000.00, because the claim for exemplary damages should be excluded in computing the
total claim.

On June 24, 2004, the trial court denied the motion to dismiss citing our ruling in Movers-Baseco
Integrated Port Services, Inc. v. Cyborg Leasing Corporation. The trial court held that the total
claim of respondent amounted to ₱420,000.00 which was above the jurisdictional amount for
MTCCs outside Metro Manila. The trial court also later issued Orders on July 7, 2004 and July
19, 2004, respectively reiterating its denial of the motion to dismiss and denying petitioners’
motion for reconsideration.

Aggrieved, petitioners filed on August 2, 2004, a Petition for Certiorari and Prohibition before
the Court of Appeals. Meanwhile, on July 14, 2004, respondent and her husband filed an
Amended Complaint increasing the claim for moral damages from ₱300,000.00 to
₱1,000,000.00. Petitioners filed a Motion to Dismiss with Answer Ad Cautelam and
Counterclaim, but the trial court denied their motion in an Order dated September 17, 2004.

Hence, petitioners again filed a Petition for Certiorari and Prohibition before the Court of
Appeals claiming that the trial court committed grave abuse of discretion in allowing the
amendment of the complaint to increase the amount of moral damages from ₱300,000.00 to
₱1,000,000.00. The case was raffled to the Seventeenth Division of the Court of Appeals.

On January 23, 2006, the Court of Appeals, Seventh Division, promulgated a decision finding
grave abuse of discretion on the part of the Regional Trial Court of Baguio, Branch 60 and Civil
Case for damages is ordered DISMISSED for lack of jurisdiction.

The Court of Appeals held that the case clearly falls under the jurisdiction of the MTCC as the
allegations show that plaintiff was seeking to recover moral damages in the amount of
₱300,000.00, which amount was well within the jurisdictional amount of the MTCC. The Court
of Appeals added that the totality of claim rule used for determining which court had jurisdiction
could not be applied to the instant case because plaintiff’s claim for exemplary damages was not
a separate and distinct cause of action from her claim of moral damages, but merely incidental to
it. Thus, the prayer for exemplary damages should be excluded in computing the total amount of
the claim.

On January 31, 2006, the Court of Appeals rendered a decision affirming the September 17, 2004
Order of the RTC denying petitioners’ Motion to Dismiss Ad Cautelam. In the said decision, the
appellate court held that the total or aggregate amount demanded in the complaint constitutes the
basis of jurisdiction. The Court of Appeals did not find merit in petitioners’ posture that the
claims for exemplary damages and attorney’s fees are merely incidental to the main cause and
should not be included in the computation of the total claim.

The Court of Appeals additionally ruled that respondent can amend her complaint by increasing
the amount of moral damages from ₱300,000.00 to ₱1,000,000.00, on the ground that the trial
court has jurisdiction over the original complaint and respondent is entitled to amend her
complaint as a matter of right under the Rules.

Hence, this petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure.
ISSUE:
1. Did the RTC acquire jurisdiction over the case?
2. Did the RTC commit grave abuse of discretion in allowing the amendment of the
complaint?

RULING:
NB: Although denominated as a petition for certiorari, we treat it as a petition for review on
certiorari under Rule 45 in view of the issues raised.
1. Yes, the RTC acquired jurisdiction over the case.
Pertinent Laws and Rules as to the jurisdictional amount:
1. Section 19(8) of Batas Pambansa Blg. 129,17 as amended by Republic Act No. 7691,18
states: Regional Trial Courts shall exercise exclusive original jurisdiction: xxx (8) In all
other cases in which the demand, exclusive of interest, damages of whatever kind,
attorney’s fees, litigation expenses, and costs or the value of the property in controversy
exceeds One hundred thousand pesos (₱100,000.00) or, in such other cases in Metro
Manila, where the demand, exclusive of the above mentioned items exceeds Two
hundred thousand pesos (₱200,000.00).

2. Section 5 of Rep. Act No. 7691 further provides: After five (5) years from the effectivity
of this Act, the jurisdictional amounts mentioned in Sec. 19(3), (4), and (8); and Sec.
33(1) of Batas Pambansa Blg. 129 as amended by this Act, shall be adjusted to Two
hundred thousand pesos (₱200,000.00). Five (5) years thereafter, such jurisdictional
amounts shall be adjusted further to Three hundred thousand pesos (₱300,000.00):
Provided, however, That in the case of Metro Manila, the abovementioned jurisdictional
amounts shall be adjusted after five (5) years from the effectivity of this Act to Four
hundred thousand pesos (₱400,000.00).

3. Relatedly, Supreme Court Circular No. 21-99 was issued declaring that the first
adjustment in jurisdictional amount of first level courts outside of Metro Manila from
₱100,000.00 to ₱200,000.00 took effect on March 20, 1999. Meanwhile, the second
adjustment from ₱200,000.00 to ₱300,000.00 became effective on February 22, 2004 in
accordance with OCA Circular No. 65-2004 issued by the Office of the Court
Administrator on May 13, 2004.

4. Administrative Circular No. 09-9419 is instructive: x x x x 2. The exclusion of the term

"damages of whatever kind" in determining the jurisdictional amount under Section 19
(8) and Section 33 (1) of B.P. Blg. 129, as amended by R.A. No. 7691, applies to cases
where the damages are merely incidental to or a consequence of the main cause of action.
However, in cases where the claim for damages is the main cause of action, or one of the
 causes of action, the amount of such claim shall be considered in determining the
jurisdiction of the court.

Related jurisprudence:
1. In Mendoza v. Soriano, it was held that in cases where the claim for damages is the main
cause of action, or one of the causes of action, the amount of such claim shall be
considered in determining the jurisdiction of the court. In the said case, the respondent’s
claim of ₱929,000.06 in damages and ₱25,000 attorney’s fees plus ₱500 per court
appearance was held to represent the monetary equivalent for compensation of the
alleged injury. The Court therein held that the total amount of monetary claims including
the claims for damages was the basis to determine the jurisdictional amount.

2. In Iniego v. Purganan,22 the Court has held: The amount of damages claimed is within
the jurisdiction of the RTC, since it is the claim for all kinds of damages that is the basis
of determining the jurisdiction of courts, whether the claims for damages arise from the
same or from different causes of action. x x x x

Based on the foregoing, there is no question that at the time of the filing of the complaint on
April 5, 2004, the MTCC’s jurisdictional amount has been adjusted to ₱300,000.00. But where
damages is the main cause of action, should the amount of moral damages prayed for in the
complaint be the sole basis for determining which court has jurisdiction or should the total
amount of all the damages claimed regardless of kind and nature, such as exemplary damages,
nominal damages, and attorney’s fees, etc., be used.

In the instant case, the complaint filed is for the recovery of damages for the alleged malicious
acts of petitioners. The complaint principally sought an award of moral and exemplary damages,
as well as attorney’s fees and litigation expenses, for the alleged shame and injury suffered by
respondent by reason of petitioners’ utterance while they were at a police station in Pangasinan.
It is settled that jurisdiction is conferred by law based on the facts alleged in the complaint since
the latter comprises a concise statement of the ultimate facts constituting the plaintiff’s causes of
action. It is clear, based on the allegations of the complaint, that respondent’s main action is for
damages. Hence, the other forms of damages being claimed by respondent, e.g., exemplary
damages, attorney’s fees and litigation expenses, are not merely incidental to or consequences of
the main action but constitute the primary relief prayed for in the complaint.

Considering that the total amount of damages claimed was ₱420,000.00, the Court of Appeals
was correct in ruling that the RTC had jurisdiction over the case.

2. NO, the court find no error, much less grave abuse of discretion, on the part of the Court of
Appeals in affirming the RTC’s order allowing the amendment of the original complaint from
₱300,000.00 to ₱1,000,000.00 despite the pendency of a petition for certiorari filed before the
Court of Appeals. While it is a basic jurisprudential principle that an amendment cannot be
allowed when the court has no jurisdiction over the original complaint and the purpose of the
amendment is to confer jurisdiction on the court, here, the RTC clearly had jurisdiction over the
original complaint and amendment of the complaint was then still a matter of right.

9.

Ada, et. al. v. Baylon

G.R. No. 182435, August 13, 2012

FACTS:

This case involves the estate of spouses Florentino Baylon and Maximina Elnas Baylon
(Spouses Baylon). They were survived by their legitimate children, namely, Rita Baylon (Rita),
Victoria Baylon (Victoria), Dolores Baylon (Dolores), Panfila Gomez (Panfila), Ramon Baylon
(Ramon) and Lilia B. Ada (Lilia).

The petitioners in this case were Lilia; Luz Adanza (daughter of Victoria); Flora Baylon
(2nd wife of Ramon); Remo, Jose, Eric, Florentino and Ma. Ruby (children of Ramon with Flora).
The respondent on the other hand is Florante Baylon (child of Ramon from his first marriage).

On July 3, 1996, the petitioners filed with the RTC a Complaint for partition, accounting
and damages against Florante, Rita and Panfila alleging Spouses Baylon, during their lifetime,
owned 43 parcels of land all situated in Negros Oriental. After the death of Spouses Baylon, they
claimed that Rita took possession of the said parcels of land and appropriated for herself the
income from the same. Using the income produced by the said parcels of land, Rita allegedly
purchased two parcels of land, Lot No. 47096 and half of Lot No. 47067 situated in Canda-uay,
Dumaguete City.

During the pendency of the case, Rita, through a Deed of Donation dated July 6, 1997,
conveyed Lot No. 4709 and half of Lot No. 4706 to Florante. On July 16, 2000, Rita died
intestate and without any issue. Thereafter, learning of the said donation inter vivos in favor of
Florante, the petitioners filed a Supplemental Pleading dated February 6, 2002, praying that the
said donation in favor of the respondent be rescinded in accordance with Article 1381(4) of the
Civil Code.

The complaint filed by the petitioners with the RTC involves two separate, distinct and
independent actions - partition and rescission. First, the petitioners raised the refusal of their co-
heirs, Florante, Rita and Panfila, to partition the properties which they inherited from Spouses
Baylon. Second, in their supplemental pleading, the petitioners assailed the donation inter vivos
of Lot No. 4709 and half of Lot No. 4706 made by Rita in favor of Florante pendente lite.
ISSUES:
1. Whether or not the actions of partition and rescission be joined in a single action.
2. Whether or not a misjoinder of causes of action a ground for dismissal.
3. Whether or not a supplemental pleading may raise a new cause of action.
RULING:
1.
No.
By a joinder of actions, or more properly, a joinder of causes of action is meant the
uniting of two or more demands or rights of action in one action, the statement of more than one
cause of action in a declaration. It is the union of two or more civil causes of action, each of
which could be made the basis of a separate suit, in the same complaint, declaration or petition.
The objectives of the rule or provision are to avoid a multiplicity of suits where the same
parties and subject matter are to be dealt with by effecting in one action a complete
determination of all matters in controversy and litigation between the parties involving one
subject matter, and to expedite the disposition of litigation at minimum cost.
Here, there was a misjoinder of causes of action. The action for partition filed by the
petitioners could not be joined with the action for the rescission of the said donation inter vivos
in favor of Florante. Lest it be overlooked, an action for partition is a special civil action
governed by Rule 69 of the Rules of Court while an action for rescission is an ordinary civil
action governed by the ordinary rules of civil procedure. The variance in the procedure in the
special civil action of partition and in the ordinary civil action of rescission precludes their
joinder in one complaint or their being tried in a single proceeding to avoid confusion in
determining what rules shall govern the conduct of the proceedings as well as in the
determination of the presence of requisite elements of each particular cause of action.
2.
No.
Misjoinder of causes of action is not a ground for dismissal. Indeed, the courts have the
power, acting upon the motion of a party to the case or sua sponte, to order the severance of the
misjoined cause of action to be proceeded with separately. However, if there is no objection to
the improper joinder or the court did not motu proprio direct a severance, then there exists no bar
in the simultaneous adjudication of all the erroneously joined causes of action.
Here, Florante posed no objection, and neither did the RTC direct the severance of the
petitioners' action for rescission from their action for partition. While this may be a patent
omission on the part of the RTC, this does not constitute a ground to assail the validity and
correctness of its decision. The RTC validly adjudicated the issues raised in the actions for
partition and rescission filed by the petitioners.
3.
Yes.
A supplemental pleading may raise a new cause of action as long as it has some relation
to the original cause of action set forth in the original complaint.
 Section 6, Rule 10 of the Rules of Court reads:
Sec. 6. Supplemental Pleadings. - Upon motion of a party the court may, upon
reasonable notice and upon such terms as are just, permit him to serve a
supplemental pleading setting forth transactions, occurrences or events which
have happened since the date of the pleading sought to be supplemented. The
adverse party may plead thereto within ten (10) days from notice of the order
admitting the supplemental pleading.
Here, the issue as to the validity of the donation inter vivos of Lot No. 4709 and half of
Lot No. 4706 made by Rita in favor of Florante is a new cause of action that occurred after the
filing of the original complaint. However, the petitioners' prayer for the rescission of the said
donation inter vivos in their supplemental pleading is germane to, and is in fact, intertwined with
the cause of action in the partition case. Lot No. 4709 and half of Lot No. 4706 are included
among the properties that were sought to be partitioned.
The petitioners' supplemental pleading merely amplified the original cause of action, on
account of the gratuitous conveyance of Lot No. 4709 and half of Lot No. 4706 after the filing of
the original complaint and prayed for additional reliefs, i.e., rescission. Indeed, the petitioners
claim that the said lots form part of the estate of Spouses Baylon, but cannot be partitioned
unless the gratuitous conveyance of the same is rescinded. Thus, the principal issue raised by the
petitioners in their original complaint remained the same.

10.

VENUE of PERSONAL ACTION

SPOUSES TEODORO and ROSARIO SARAZA and FERNANDO SARAZA,  vs.

WILLIAM FRANCISCO,
G.R. No. 198718, November 27, 2013

FACTS:

Respondent William Francisco alleged in his complaint that he and Petitioner Fernando
executed an agreement that provided for the latter’s sale of his 100 square meter share in a lot
situated in Bangkal, Makati City for a total consideration of P 3,200,000. The amount of P
1,200,000 was paid upon the Agreement’s execution, while the balance of ₱2,000,000.00 was to
be paid on installments to the Philippine National Bank (PNB), to cover a loan of Spouses
Saraza, Fernando’s parents, with the bank. A final deed of sale conveying the property was to be
executed by Fernando upon full payment of the PNB loan.
 It was also agreed upon that should the parties fail for any reason to transfer the subject
property to the respondent’s name, Rosario and Fernando’s 136-sq m property covered by TCT
No. 156126 and encumbered to PNB to secure the loan that was to be paid by the respondent
shall be considered a collateral in favor of the respondent. Subsequently, the petitioners denied
the request of the respondent for the issuance of a Special Power of Attorney that would
authorize him to receive from PNB the owner’s duplicate copy of TCT No. 156126 upon full
payment of the loan. Instead, he found out that petitioners had executed an Amended Authority,
which provided that the owner’s copy of TCT No. 156126 should be returned to the mortgagors
upon full payment of the loan. Petitioners likewise caused the eviction of the respondent from the
property.

As a consequence, respondent prompted the respondent to institute the civil case for
specific performance, sum of money and damages with the RTC of Imus Cavite. The RTC
rendered its decision in favor the respondent upon considering the contents of the agreement. In
response, the petitioner questioned the jurisdiction of RTC of Imus as the case involves an
adjudication of ownership of property situated in Makati City.

The CA affirmed the trial courts ruling based on the parties agreement. On the issue of
jurisdiction, it held that petitioner Fernando failed to file before the lower court a motion to
dismiss stating that the action should have been filed in Makati City. More importantly, the
Court explained that the case was a personal action since it did not involve a claim of ownership
of the subject property, but only sought Fernando’s execution of a deed of sale in the
respondent’s favor. Thus, the venue for the action was the residence of the plaintiff or the
defendant, at the plaintiff’s option.

ISSUE: Whether or not the RTC of Imus, Cavite has jurisidiction.

HELD:

Yes. The Court held that the end result of the respondent’s claim was the transfer of the
subject property to his name, the suit was still essentially for specific performance, a personal
action, because it sought Fernando’s execution of a deed of absolute sale based on a contract
which he had previously made.

In reiterated its ruling in Cabutihan v. Landcenter Construction & Development

Corporation where a complaint for specific performance that involved property situated in
Parañaque City was instituted before the RTC of Pasig City. When the case’s venue was raised
as an issue, the Court sided with therein petitioner who argued that "the fact that ‘she ultimately
sought the conveyance of real property’ not located in the territorial jurisdiction of the RTC of
Pasig is x x x an anticipated consequence and beyond the cause for which the action [for specific
performance with damages] was instituted.

Section 2, Rule 4 of the Rules of Court then governs the venue for the respondent’s
action. It provides that personal actions "may be commenced and tried where the plaintiff or any
of the principal plaintiffs resides, or where the defendant or any of the principal defendants
resides, or in the case of a non-resident defendant where he may be found, at the election of the
plaintiff." Considering the respondent’s statement in his complaint that he resides in Imus,
Cavite, the filing of his case with the RTC of Imus was proper.

11.
G.R. No. 204444               January 14, 2015
VIRGILIO C. BRIONES vs.
COURT OF APPEALS and CASH ASIA CREDIT CORPORATION
PERLAS-BERNABE, J.:
The Facts
The instant case arose from a Complaint filed by Virgilio C. Briones (Briones) for Nullity of Mortgage
Contract, Promissory Note, Loan Agreement, Foreclosure of Mortgage, Cancellation of Transfer Certificate of
Title (TCT) No. 290846, and Damages against Cash Asia before the RTC-Manila.   7

In his complaint, Briones alleged that he is the owner of a property covered by TCT No. 160689 (subject
property), and that, on July 15, 2010, his sister informed him that his property had been foreclosed and a writ
of possession had already been issued in favor of Cash Asia. 
Upon investigation, Briones discovered that: (a) on December 6, 2007, he purportedly executed a promissory
note,  loan agreement,  and deed of real estate mortgage  covering the subject property (subject contracts) in
9 10 11

favor of Cash Asia in order to obtain a loan in the amount of ₱3,500,000.00 from the latter;  and (b) since the
12

said loan was left unpaid, Cash Asia proceeded to foreclose his property.  In this relation, Briones claimed that
13

he never contracted any loans from Cash Asia as he has been living and working in Vietnam since October 31,
2007. 
He further claimed that he only went back to the Philippines on December 28, 2007 until January 3, 2008 to
spend the holidays with his family, and that during his brief stay in the Philippines, nobody informed him of
any loan agreement entered into with Cash Asia. Essentially, Briones assailed the validity of the foregoing
contracts claiming his signature to be forged. 
For its part, Cash Asia filed a Motion to Dismiss, praying for the outright dismissal of Briones’s complaint on
the ground of improper venue. In this regard, Cash Asia pointed out the venue stipulation in the subject
contracts stating that "all legal actions arising out of this notice in connection with the Real Estate
Mortgage subject hereof shall only be brought in or submitted to the jurisdiction of the proper court of
Makati City." In view thereof, it contended that all actions arising out of the subject contracts may only be
exclusively brought in the courts of Makati City, and as such, Briones’s complaint should be dismissed for
having been filed in the City of Manila. 
In response, Briones filed an opposition,  asserting, inter alia, that he should not be covered by the venue
19

stipulation in the subject contracts as he was never a party therein. He also reiterated that his signatures on the
said contracts were forgeries. 
RTC: The RTC denied Cash Asia’s motion to dismiss for lack of merit. In denying the motion, the RTC
opined that the parties must be afforded the right to be heard in view of the substance of Briones’s cause of
action against Cash Asia as stated in the complaint. 
Cash Asia moved for reconsideration  which was denied.
23

CA: CA annulled the RTC Orders, and accordingly, dismissed Briones’s complaint without prejudice to the
filing of the same before the proper court in Makati City. It held that the RTC gravely abused its discretion in
denying Cash Asia’s motion to dismiss, considering that the subject contracts clearly provide that actions
arising therefrom should be exclusively filed before the courts of Makati City only. 
ISSUE: Should the complaint be dismissed on the ground of improper venue? 
RULING: NO. 
Rule 4 of the Rules of Court governs the rules on venue of civil actions, to wit:
VENUE OF ACTIONS
SECTION 1. Venue of real actions. — Actions affecting title to or possession of real property, or interest
therein, shall be commenced and tried in the proper court which has jurisdiction over the area wherein the
real property involved, or a portion thereof, is situated.
Forcible entry and detainer actions shall be commenced and tried in the municipal trial court of the
municipality or city wherein the real property involved, or a portion thereof, is situated.
SEC. 2. Venue of personal actions. — All other actions may be commenced and tried where the plaintiff or
any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides,
or in the case of a non-resident defendant where he may be found, at the election of the plaintiff.
SEC. 3. Venue of actions against nonresidents. — If any of the defendants does not reside and is not found
in the Philippines, and the action affects the personal status of the plaintiff, or any property of said
defendant located in the Philippines, the action may be commenced and tried in the court of the place
where the plaintiff resides, or where the property or any portion thereof is situated or found.
SEC. 4. When Rule not applicable. — This Rule shall not apply –
(a) In those cases where a specific rule or law provides otherwise; or
(b) Where the parties have validly agreed in writing before the filing of the action on the
exclusive venue thereof.
Based therefrom, the general rule is that the venue of real actions is the court which has jurisdiction over the
area wherein the real property involved, or a portion thereof, is situated; while the venue of personal actions is
the court which has jurisdiction where the plaintiff or the defendant resides, at the election of the plaintiff. As
an exception, jurisprudence in Legaspi v. Rep. of the Phils. instructs that the parties, thru a written
instrument, may either introduce another venue where actions arising from such instrument may be
filed, or restrict the filing of said actions in a certain exclusive venue, viz.:
The parties, however, are not precluded from agreeing in writing on an exclusive venue, as qualified by
Section 4 of the same rule. Written stipulations as to venue may be restrictive in the sense that the suit
may be filed only in the place agreed upon, or merely permissive in that the parties may file their suit
not only in the place agreed upon but also in the places fixed by law. As in any other agreement, what is
essential is the ascertainment of the intention of the parties respecting the matter.
As regards restrictive stipulations on venue, jurisprudence instructs that it must be shown that such
stipulation is exclusive.  In the absence of qualifying or restrictive words, such as "exclusively," "waiving
1âwphi1

for this purpose any other venue," "shall only" preceding the designation of venue, "to the exclusion of the
other courts," or words of similar import, the stipulation should be deemed as merely an agreement on an
additional forum, not as limiting venue to the specified place.
In this relation, case law likewise provides that in cases where the complaint assails only the terms,
conditions, and/or coverage of a written instrument and not its validity, the exclusive venue stipulation
contained therein shall still be binding on the parties, and thus, the complaint may be properly
dismissed on the ground of improper venue. Conversely, therefore, a complaint directly assailing the
validity of the written instrument itself should not be bound by the exclusive venue stipulation contained
therein and should be filed in accordance with the general rules on venue. To be sure, it would be
inherently consistent for a complaint of this nature to recognize the exclusive venue stipulation when it, in fact,
precisely assails the validity of the instrument in which such stipulation is contained.
In this case, the venue stipulation found in the subject contracts is indeed restrictive in nature, considering that
it effectively limits the venue of the actions arising therefrom to the courts of Makati City. However, it must
be emphasized that Briones' s complaint directly assails the validity of the subject contracts, claiming
forgery in their execution. Given this circumstance, Briones cannot be expected to comply with the
aforesaid venue stipulation, as his compliance therewith would mean an implicit recognition of their
validity. Hence, pursuant to the general rules on venue, Briones properly filed his complaint before a court in
the City of Manila where the subject property is located.
In conclusion, the CA patently erred and hence committed grave abuse of discretion in dismissing Briones's
complaint on the ground of improper venue.