CIVIL

PROCEDURE
CASES
JURISDICTION
 1. PILIPINAS SHELL PETROLEUM CORPORATION and PETRON CORPORATION,
petitioners vs. ROMARS INTERNATIONAL GASES CORPORATION, respondent. (G.R.
No. 189669. February 16, 2015.)

FACTS: Respondent Romars International Gases Corporation, not an authorized distributor or

reseller of Pilipinas Shell Petroleum Corporation and Petron Corporation products was found to
distribute and/or sell LPG products using the same containers of Petron and Shell. The
petitioners requested the NBI to investigate said activities of respondent which confirmed that
respondent was engaged in said activities and distributing the gas cylinders in different places,
one of them a store called “Edrich Enterprises” located at 272 National Highway, San Nicolas,
Iriga City. Thus, the NBI, in behalf of the petitioners, filed an application for a search warrant for
Violation of Section 155.1, in relation to Section 170 of RA No. 8293 against respondent and/or
occupants with the Regional Trial Court of Naga City (RTC-Naga). The search warrant was
granted, and the respondent's premises were searched, resulting in the seizure of articles or
items described in the warrant.

The respondent filed a motion to quash the search warrant which was denied by the RTC-Naga
in an Order. However, respondent's new counsel filed an Appearance with Motion for
Reconsideration raising the issue of the impropriety of filing the Application for Search Warrant
at the RTC-Naga City when the alleged crime was committed in a place within the territorial
jurisdiction of the RTC-Iriga City. Petitioner opposed the Motion for Reconsideration, arguing
that it was already too late for respondent to raise the issue regarding the venue of the filing of
the application for search warrant, as this would be in violation of the Omnibus Motion Rule.

RTC-Naga issued an Order granting respondent's Motion for Reconsideration. Petitioner then
appealed to the CA, but the appellate court, in its Decision affirmed the RTC Order quashing the
search warrants. Petitioner's motion for reconsideration of the CA Decision was also denied.
Hence, petitioners filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court.

ISSUE: Whether or not the venue in an application for a search warrant is jurisdictional.

RULING: In the case at bar, NBI failed to comply with Section 2(b), Rule 126 of the Revised
Rules of Criminal Procedure. The petitioner’s application for a search warrant was insufficient
for failing to comply with the requirement to state therein the compelling reasons why they had
to file the application in a court that did not have territorial jurisdiction over the place where the
alleged crime was committed. Paragraph (b) of Section 2, Rule 126 of the Revised Rules of
Criminal Procedure mandates that, the application for search warrant should state the
compelling reasons why the search warrants were being filed with the RTC-Naga instead of the
RTC-Iriga City, considering that it is the latter court that has territorial jurisdiction over the place
where the alleged crime was committed and also the place where the search warrant was
enforced.

The Supreme Court ruled that venue in an application for a search warrant is not jurisdictional.
The Court held that a search warrant is a special criminal process, rather than a criminal action,
and the power to issue a search warrant is inherent in all courts. This means that the court
where the search warrant was applied for has the authority to issue the warrant, regardless of
whether the crime was committed within its territorial jurisdiction. The Court deems itt was
improper for the RTC-Naga to have taken into consideration an issue which respondent failed to
raise in its motion to quash, as it did not involve a question of jurisdiction over the subject
matter. It is clear that the RTC-Naga had jurisdiction to issue criminal processes such as a
search warrant. The Supreme Court granted the petition and reversed the Decision and
Resolution of the Court of Appeals, denying respondent's motion to quash, was reinstated.
 2. ANA LOU B. NAVAJA, petitioner, vs. HON. MANUEL A. DE CASTRO, or the Acting
Presiding Judge of MCTC Jagna-Garcia-Hernandez, DKT PHILS., INC., represented by
ATTY. EDGAR BORJE, respondents. (G.R. No. 189926. June 22, 2015.)

FACTS: The case involves a petition for review on certiorari filed by Ana Lou B. Navaja, who is
challenging the decision of the Court of Appeals (CA) affirming the order of the Regional Trial
Court (RTC) denying her motion to quash a criminal case for falsification of a private document.
The complaint was filed by DKT Philippines, Inc. against Navaja, alleging that she falsified a
receipt and claimed reimbursement for inflated meal expenses. Navaja is charged with the
crime of falsification of a private document before the Municipal Circuit Trial Court (MCTC) of
Jagna-Garcia-Hernandez, Bohol.

Navaja filed a motion to quash and defer arraignment, arguing that none of the essential
elements of the crime occurred in Jagna, Bohol, and therefore, the MCTC had no jurisdiction.
However, the MCTC denied the motion and set the case for arraignment. Navaja filed a motion
for reconsideration, which was also denied.

Navaja then filed a petition for certiorari before the RTC, challenging the denial of her motion to
quash. However, the RTC denied the petition, ruling that the MCTC had jurisdiction over the
case based on the Regional State Prosecutor's finding that there were sufficient evidence
indicating that the falsification took place in Jagna.

Navaja appealed to the Court of Appeals (CA), but her appeal was dismissed. The CA affirmed
the RTC's ruling that the MCTC had jurisdiction over the case. Navaja filed a motion for
reconsideration, which was denied. Hence, petitioner elevated a petition for review on certiorari
before the Supreme Court.

ISSUE: Whether or not the MCTC of Jagna, Bohol, have jurisdiction over the case for
falsification of private document.

RULING: On the substantive issue of whether the MCTC of Jagna, Bohol, has jurisdiction over
her case for falsification of a private document, Navaja argues that not one of the three (3)
essential elements of such crime was shown to have been committed in Jagna, Bohol. She
insists that there is no showing in the Information, or even in the complaint-affidavit and the
annexes thereto that the crime of falsification of a private document was committed or
consummated in Jagna, Bohol.

The Supreme Court held that venue in criminal cases is an essential element of jurisdiction. It
explained that the venue is where the offense was committed or where any of its essential
ingredients occurred. In cases of falsification of private documents, the venue is where the
document was actually falsified. Contrary to Navaja's argument that the MCTC of Jagna, Bohol,
has no jurisdiction over the case because not one of the essential elements of falsification of
private document was committed within its jurisdiction, the Court found that the allegations in
the Information and the complaint-affidavit make out a prima facie case that such crime was
committed in Jagna, Bohol. Guided by the settled rule that the jurisdiction of the court is
determined by the allegations of the complaint or information and not by the result of proof, the
Court holds that Navaja's case for falsification of private document falls within the territorial
jurisdiction of the MCTC of Jagna, Bohol. In conclusion, the Supreme Court denied Navaja's
petition and affirmed the CA's decision and resolution, upholding the jurisdiction of the MCTC
over the case.
 3. UNION BANK OF THE PHILIPPINES and DESI TOMAS, petitioners, vs. PEOPLE OF
THE PHILIPPINES, respondent. (G.R. No. 192565. February 28, 2012.)

FACTS: Desi Tomas executed and signed the Certification against Forum Shopping. Then, she
was charged of deliberately violating Article 183 of the RPC (perjury) “by falsely declaring under
oath in the Certificate against Forum Shopping in the second complaint that she did not
commence any other action or proceeding involving the same issue in another tribunal or
agency”. The Certification was notarized in Makati City but was submitted and used in Pasay
City, while the Information against Union Bank and Tomas was filed in Makati.

Tomas filed a Motion to Quash. She argued that the venue was improperly laid since it is the
Pasay City Court and not the MeTC-Makati City that has jurisdiction over the perjury case. The
MeTC-Makati City denied the Motion to Quash.

The petitioners filed a petition for certiorari before the RTC-Makati City to annul and set aside
the MeTC-Makati City orders on the ground of grave abuse of discretion. The RTC-Makati City
ruled that the MeTC-Makati City did not commit grave abuse of discretion. The RTC-Makati City
subsequently denied the petitioner's motion for reconsideration.

ISSUE:

Whether or not the proper venue of perjury under Article 183 of the RPC should be – Makati
City, where the Certificate against Forum Shopping was notarized, or Pasay City, where the
Certification was presented to the trial court.

RULING:

The court has denied the petition and determined that the MeTC-Makati City is the proper venue
and court for the perjury case against the petitioners.

When it comes to criminal cases, the venue and jurisdiction are deemed sufficiently alleged if
the Information states that the offense was committed or if some of its essential ingredients
occurred within the territorial jurisdiction of the court.

The Information alleged that the first, second, and fourth elements of the crime of perjury were
committed in Makati City. The third element of willful and deliberate falsehood was also
sufficiently alleged to have been committed in Makati City, not Pasay City, as indicated in the
last portion of the Information. Tomas allegedly made the false declarations in the Certificate
against Forum Shopping before a notary public in Makati City, despite knowing that the material
statements she subscribed and swore to were not true. Thus, Makati City is the proper venue
and MeTC-Makati City is the proper court to try the perjury case against Tomas.

Under the circumstances, Article 183 of the RPC applies and penalizes one who makes an
affidavit upon any material matter before a competent person authorized to administer an oath
in cases in which the law requires it. The constitutive act of the offense is the making of an
affidavit. The criminal act is consummated when the statement containing a falsity is subscribed
and sworn before a duly authorized person. To clarify, the crime of perjury committed through
the making of a false affidavit under Article 183 of the RPC is committed at the time the affiant
subscribes and swears to his or her affidavit.
 4. MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners, vs. COURT OF
APPEALS, CITYLAND DEVELOPMENT CORPORATION, STEPHEN ROXAS,
ANDREW LUISON, GRACE LUISON and JOSE DE MAISIP, respondents. (G.R. No.
75919. May 7, 1987.)

FACTS: A complaint for specific performance was filed by Manchester Development

Corporation against City Land Development Corporation to compel the latter to execute a deed
of sale in favor Manchester. Manchester also alleged that City Land forfeited the former’s tender
of payment for a certain transaction thereby causing damages to Manchester amounting to
P78,750, This amount was alleged in the BODY of their Complaint but it was not reiterated in
the PRAYER of same complaint. Manchester paid a docket fee of only. Said docket fee is
premised on the allegation of Manchester that their action is primarily for specific performance
hence it is incapable of pecuniary estimation. The court ruled that there is an under assessment
of docket fees hence it ordered Manchester to amend its complaint. Manchester complied but
what it did was to lower the amount of claim for damages to P10M. Said amount was however
again not stated in the PRAYER.

ISSUE: Whether or not the court devoid of jurisdiction for failure to pay the correct docket fees?

RULING: Yes. The trial court did not acquire jurisdiction over the case by the payment of only
410.00 as docket fee.

In Magaspi case, Supreme Court declared that a case is deemed filed only upon payment of
docket fee regardless of the actual date of filing in court. As such, in Manchester, the trial court
did not acquire jurisdiction over the case by payment of only P410 as docket fee. Neither the
amendment of complaint vested jurisdiction upon the court because in essence, there was no
such original complained that was duly filed which could be amended. The orders admitting the
amended complaint and all subsequent proceedings and actions taken by the RTC are null and
void.

Supreme Court frowns at the practice of counsel who filed the original complaint by omitting any
specification of the amount of damages in the prayer, although the real amount is alleged in the
body of the complaint. This is clearly intended for no other purpose than to evade the payment
of correct filing fees or to mislead the docket clear in the assessment of filing fee. Such
fraudulent practice was compounded when Manchester, through another counsel, filed an
amended complaint, deleting all mention of the amount of damages being asked for in the body
of complaint. It was only when in obedience to the order of the SC that the amount of damages
be specified in the amended complaint, that Manchester wrote the damages in a reduced
amount in the body of the complaint but not in the prayer thereof. The design to avoid payment
of the required docket fee was obvious.

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 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.
 5. 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.
(G.R. Nos. 79937-38. February 13, 1989.)

FACTS: Petitioner Sun Insurance filed a complaint with the Makati RTC for the consignation of
a premium refund on a fire insurance policy with prayer for the judicial declaration of its nullity
against private respondent Manuel Uy Po Tiong. Private respondent was declared in default for
failure to file the required answer within the reglementary period.

Private respondent filed a complaint in the Quezon City RTC for the refund of premiums and the
issuance of a writ of preliminary attachment. Only the amount of P210 was paid by private
respondent as docket fee which prompted petitioner to raise objection. Upon order of the SC,
the case was assigned to a different branch due to under-assessment of docket fees.

The case was thereafter assigned to Judge Asuncion who required the parties to comment on
the Clerk of Court’s letter-report signifying her difficulty in complying with the SC Resolution
since the pleadings filed by private respondent did not indicate the exact amount sought to be
recovered.

Private respondent filed a Re-Amended complaint stating therein a claim of not less than 10M
as actual compensatory damages in the prayer. However, the body of the amended complaint
alleges actual and compensatory damages and atty’s fees in the total amount of about
P44,601,623.70.

Judge Asuncion issued another Order admitting the second amended complaint and stating that
the same constituted proper compliance with the SC Resolution. Petitioner filed a petition for
Certiorari with the CA questioning the order of Judge Asuncion. Private respondent filed a
supplemental complaint alleging an additional claim of P20M as damages bringing the total
claim to P64,601,623.70. CA denied petition and granted writ of preliminary attachment.

ISSUE: Whether or not the Court acquire jurisdiction over the case even if the private
respondent did not pay the correct or sufficient docket fees.

RULING: It was held by the Supreme Court that it is not simply the filing of the complaint or
appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial
court with jurisdiction over the subject matter or nature of the action. 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. Same rule goes for permissive counterclaims, third party claims and
similar pleadings.

In herein case, obviously, there was the intent on the part of private respondent to defraud the
government of the docket fee due not only in the filing of the original complaint but also in the
filing of the second amended complaint. However, a more liberal interpretation of the rules is
called for considering that.

Where a trial court acquires jurisdiction in like manner, 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 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. Petition is dismissed for lack of merit.
6. MODESTA CALIMLIM AND LAMBERTO MAGALI IN HIS CAPACITY AS
ADMINISTRATOR OF THE ESTATE OF DOMINGO MAGALI, petitioner, vs. HON.
PEDRO A. RAMIREZ IN HIS CAPACITY AS PRESIDING JUDGE OF THE COURT OF
FIRST INSTANCE OF PANGASINAN, BRANCH I, and FRANCISCO RAMOS,
respondents. (G.R. No. L-34362. November 19, 1982.)

FACTS: The case of involves Modesta Calimlim, the surviving spouse of Domingo Magali, and
Lamberto Magali, the administrator of Domingo's estate. In 1961, a judgment was rendered in
favor of Independent Mercantile Corporation against Manuel Magali, one of Domingo's children,
in a civil case. The judgment was executed, and the property covered by Transfer Certificate of
Title (TCT) No. 9138, registered in the name of Domingo Magali, was sold to Independent
Mercantile Corporation. The corporation then filed a petition to compel Manuel Magali to
surrender the owner's duplicate of TCT No. 9138, which was granted by the court. A new title,
TCT No. 68568, was issued in the name of Independent Mercantile Corporation. Modesta
Calimlim and Lamberto Magali filed a petition with the Court of First Instance, sitting as a
cadastral court, to cancel TCT No. 68568, alleging that they were the true owners of the
property and that the title was issued in error. The petition was dismissed by the court without
explanation. The petitioners did not appeal the dismissal and instead filed a new case, Civil
Case No. SCC-180, praying for the cancellation of the conveyances and sales made with
respect to the property. Private respondent Francisco Ramos, who claimed to have bought the
property from Independent Mercantile Corporation, was named as a defendant in the new case.

ISSUE: The main issues raised in this case are: (1) Can the defense of res judicata be invoked
to bar the filing of Civil Case No. SCC-180? (2) Did the Court of First Instance, sitting as a
cadastral court, have jurisdiction to pass upon the petition to cancel TCT No. 68568? (3) Can
the petitioners be estopped from questioning the jurisdiction of the Court of First Instance?

RULING: On appeal, the Supreme Court reversed the dismissal and ordered further
proceedings in the case. The Court held that the defense of res judicata did not apply because
the judgment rendered by the Court of First Instance in the first case was null and void. The
Court explained that a court of first instance, acting as a land registration court, does not have
jurisdiction to decide on ownership or title to real property. Therefore, the judgment in the first
case, which involved ownership and title issues, was rendered without jurisdiction.

The Court also rejected the argument that the petitioners were estopped from questioning the
jurisdiction of the court because they had invoked its authority in their previous petition. The
Court emphasized that the determination of jurisdiction is a matter of law and cannot be
conferred by consent or agreement of the parties. The filing of a suit in a court without
jurisdiction may be the result of an honest mistake or divergent interpretations of the law. It is
the duty of the court to dismiss the action if it lacks jurisdiction, and any judgment rendered
without jurisdiction may be impeached or annulled.

In conclusion, the Supreme Court reversed the dismissal of the petitioners' case and ordered
further proceedings. The Court held that the defense of res judicata did not apply because the
previous judgment was rendered without jurisdiction. The Court also rejected the argument of
estoppel, emphasizing that the determination of jurisdiction is a matter of law and cannot be
waived or conferred by the parties.
 7. FERNANDO MEDICAL ENTERPRISES, INC., petitioner, vs. WESLEYAN UNIVERSITY
PHILIPPINES, INC., respondent. (G.R. No. 207970. January 20, 2016.)

FACTS: From January 9, 2006, to February 2, 2007, FERNANDO MEDICAL ENTERPRISES

delivered and installed medical equipment at Wesleyan University's hospital. Wesleyan paid
only P67,357,683.23 of the P123,901,650.00 owed, leaving P54,654,195.54 unpaid.

On February 11, 2009, both parties agreed to reduce the claim to P50,400,000.00, payable in
installments. However, on May 27, 2009, Wesleyan's new administration declared the contracts
defective and refused to honor the agreement.

FERNANDO MEDICAL ENTERPRISES sent a demand letter on June 24, 2009, and then filed a
complaint in the RTC. Wesleyan admitted to the deliveries, total liability, payments made,
remaining balance, and the February 11, 2009 agreement but denied other allegations due to
lack of knowledge of past administration actions.

Wesleyan moved to dismiss the complaint for lack of jurisdiction, improper venue, litis
pendentia, and forum shopping, citing an earlier complaint for contract rescission. The RTC
denied the motion on July 19, 2009. FERNANDO MEDICAL ENTERPRISES then filed for
judgment based on the pleadings on September 28, 2011, which Wesleyan opposed.

ISSUE: Whether or not the Court of Appeals erred in affirming the RTC’s denial of the
petitioner’s motion for judgment on the pleadings.

RULING: The key question in a motion for judgment on the pleadings is whether the pleadings
raise factual issues. This depends on how the defending party's answer addresses the
complaint's ultimate facts. Admissions require no evidence, while properly denied allegations
do.

Admissions occur through express confession or omission. Specific denial must follow one of
three methods outlined in Section 10, Rule 8 of the Rules of Court. Any material averment not
specifically denied is deemed admitted, except for unliquidated damages.

In Civil Case No. 09-122116, Wesleyan University admitted key allegations: the transactions,
total liability, payments made, balance due, and the February 11, 2009 agreement. These
admissions, particularly regarding the February 11, 2009 agreement, supported the petitioner’s
case. The trial court should only consider the respondent's answer in determining the presence
of factual issues under Section 1, Rule 34 of the Rules of Court.

The Court found that the CA erroneously identified a factual issue regarding total liability and
payment. The omission of the supposed payment in Wesleyan's answer suggested insincerity in
its denial of liability.

WHEREFORE, the Court REVERSES and SETS ASIDE the decision of July 2, 2013; DIRECTS
the RTC, Branch 1, Manila to resume proceedings in Civil Case No. 09-122116 and GRANT the
Motion for Judgment Based on the Pleadings, rendering the appropriate judgment; and
ORDERS the respondent to pay the costs of the suit.
 8. VICTORINA (VICTORIA) ALICE LIM LAZARO, petitioner, vs. BREWMASTER
INTERNATIONAL, INC., respondent. (G.R. No. 182779. August 23, 2010.)

FACTS: A complaint for a sum of money filed by Brewmaster International, Inc. (respondent)
against Victorina (Victoria) Alice Lazaro (petitioner) and her husband, Prescillo G. Lazaro, with
the Metropolitan Trial Court (MeTC) of Makati City. The complaint alleged that the defendants
obtained beer and other products on credit from the respondent worth P138,502.92 and failed to
pay despite repeated demands. The respondent attached sales invoices to the complaint, which
showed that the goods were sold to "Total" and received by a certain Daniel Limuco. The
petitioner and her husband denied any knowledge of the obligation and claimed that they did not
purchase anything from the respondent. The MeTC dismissed the complaint, ruling that the
respondent failed to meet the burden of proof required to establish its claim. The respondent
appealed to the Regional Trial Court (RTC), which affirmed the MeTC's decision. The
respondent then elevated the case to the Court of Appeals (CA), which reversed the trial court's
decision and ordered the petitioner and her husband to pay the claimed amount plus interests.
The Lazaro couple filed a motion for reconsideration, which was denied by the CA. They then
filed a petition for review on certiorari with the Supreme Court.

ISSUE: Whether or not the Court of Appeals err in interpreting Section 6 of the Revised Rules of
Summary Procedure when it reversed the Decision of the RTC.

RULING:The basic requirement under the rules of procedure isthat a complaint must make
a plain, concise, and direct statement of the ultimate facts on which the plaintiff relies for his
claim. Ultimate facts mean the important and substantial facts which either directly form
the basis of the plaintiff’s right and duty or directly make up the wrongful acts or
omissions of the defendant. They refer to the principal, determinative, constitutive rimfacts
upon the existence of which the cause of action rests. The term does not refer to details of
probative matter or particulars of evidence which establish the material elements.

The test of sufficiency of the facts alleged in a complaint to constitute a cause of action is
whether, admitting the facts alleged, the court could render a valid judgment upon the same in
accordance with the prayer of the petition or complaint. To determine whether the complaint
states a cause of action, all documents attached thereto may, in fact, be considered, particularly
when referred to in the complaint.

Contrary to petitioners’ stance, we find that the Complaint sufficiently states a cause of action.
As correctly held by the CA, the sales invoices are not actionable documents. They were not the
bases of respondents’ action for sum of money but were attached to the Complaint only to
provide details on the alleged transactions. They were evidentiary in nature and not even
necessary to be stated or cited in the Complaint.

At any rate, consideration of the attached sales invoices would not change our conclusion. The
sales invoices, naming Total as the purchaser of the goods, do not absolutely foreclose the
probability of petitioner being liable for the amounts reflected thereon. An invoice is nothing
more than a detailed statement of the nature, quantity, and cost of the thing sold and has been
considered not a bill of sale. Had the case proceeded further, respondent could have presented
evidence linking these sales invoices to petitioner. CA Decision and Resolution are affirmed.
 9. GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner, vs. HEIRS OF
FERNANDO F. CABALLERO, represented by his daughter, JOCELYN G.
CABALLERO, respondents. (G.R. No. 158090, October 4, 2010.)

FACTS: This case involves a petition for review under Rule 45 of the Rules of Court, seeking to
overturn the Court of Appeals' decisions from December 17, 2002, and April 29, 2003. The
dispute centers on the foreclosure and auction of Fernando Caballero's mortgaged property and
subsequent legal conflicts over repurchasing it.

Fernando mortgaged his residential lot in Mlang, Cotabato, to secure a ₱20,000 loan from GSIS
in 1968. After defaulting, the property was foreclosed on January 20, 1973, and sold at a public
auction to GSIS for ₱36,283. Fernando failed to redeem the property, and GSIS obtained the
title in 1975. In 1989, GSIS held a public bidding where CMTC outbid Fernando's daughter,
Jocelyn, with a ₱450,000 bid, leading to a sale and new title in CMTC's name.

Fernando, through Jocelyn, filed a complaint against GSIS and CMTC, alleging irregularities in
the bidding and seeking to nullify the sale. GSIS contended Fernando lost his redemption rights
and had opportunities to repurchase. GSIS also counterclaimed for unpaid rentals and interest.

The RTC dismissed Fernando's complaint, upheld GSIS's counterclaim, and ordered him to pay
₱249,800 in rentals to CMTC. The Court of Appeals affirmed but removed the rental payment
order. Fernando's motion for reconsideration was denied. After Fernando's death in 2002, his
heirs filed to substitute him as respondents.

ISSUE: Whether or not the trial court acquire jurisdiction over GSIS's counterclaim despite its
failure to pay docket fees.

RULING: The petitioner argues that even if its counterclaim is permissive, the trial court has
jurisdiction due to its exemption from fees. However, in the case regarding GSIS's exemption
from legal fees, the Supreme Court ruled that Section 39 of Republic Act No. 8291, which
exempts GSIS from "all taxes, assessments, fees, charges, or duties," does not exempt it from
legal fees.

The 1987 Constitution grants the Supreme Court sole authority to set rules for pleading,
practice, and procedure, preventing Congress from altering these rules. Thus, any legislative
grant of exemption from legal fees for GSIS violates the Court's fiscal autonomy, which allows
the Court to levy and collect fees necessary for its independence and financial resources. Legal
fees contribute to the Judiciary Development Fund (JDF) and the Special Allowance for the
Judiciary Fund (SAJF), both crucial for maintaining the Court's fiscal independence.

Therefore, Congress cannot exempt GSIS from legal fees without infringing on the Court's
financial autonomy and independence, making such an exemption constitutionally invalid.

Due to the non-payment of docket fees on petitioner's counterclaim, the trial court never
acquired jurisdiction over it and, thus, there is no need to discuss the second issue raised by
petitioner.

Petition is denied. CA’s Decision and Resolution are affirmed.