Ruby Shelter v. Formaran

021. RUBY SHELTER vs FORMARAN RUBY SHELTER BUILDERS AND REALTY DEVELOPMENT CORPORATION, Petitioner, vs HON. PABLO C. FORMARAN III, Presiding Judge of Regional Trial Court Branch 21, Naga City, as Pairing Judge for Regional Trial Court Branch 22, Formerly Presided By HON. NOVELITA VILLEGAS-LLAGUNO (Retired 01 May 2006), ROMEO Y. TAN, ROBERTO L. OBIEDO and ATTY. TOMAS A. REYES, Respondents. February 10, 2009 Chico-Nazario, J. Petition for Review on Certiorari under Rule 45 of the decision of the CA FACTS: RSB obtained a P95M loan in from Tan and Obiedo, secured by REM over five parcels of land located in Naga City. RSB failed to pay the loan despite being granted several extensions. It was agreed that RSB should execute deeds of absolute sale over the five parcel of lands in lieu of payment (i.e. dacion en pago). Without payment having been made by RSB, Tan and Obiedo presented the Deeds of Absolute Sale, as a result of which, they were able to secure TCTs over the five parcels of land in their names. RSB filed before the RTC a Complaint against respondents Tan and Obiedo for declaration of nullity of deeds of sales and damages. RSB’s causes of actions were: (a) pactum commissorium; and (b) bad faith by Tan and Obediedo. Upon filing its Complaint with the RTC, RSB paid the sum of P13,644.25 for docket and other legal fees, as assessed by the Office of the Clerk of Court. The Clerk of Court initially considered the case as an action incapable of pecuniary estimation and computed the docket and other legal fees due thereon according to Section 7(b)(1), Rule 141 of the Rules of Court. Tan filed before the RTC an Omnibus Motion in which he contended that the civil case involved real properties, the docket fees for which should be computed in accordance with Section 7(a), not Section 7(b)(1), of Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC which took effect on 16 August 2004. Since petitioner did not pay the appropriate docket fees for the civil case, the RTC did not acquire jurisdiction over the said case. Hence, respondent Tan asked the RTC to issue an order requiring RSB to pay the correct and accurate docket fees and should RSB fail to do so, to deny and dismiss the case. RTC ordered RSB to pay additional filing fee and Tan was also ordered to pay docket and filing fees on his counterclaim. CA upheld RTC, saying that the objectives of RSB in filing thecomplaint were to cancel the deeds of sale and ultimately, to recover possession of the same. It is therefore a real action. Consequently, the additional docket fees that must be paid cannot be assessed in accordance with Section 7(b). As a real action, Section 7(a) must be applied in the assessment and payment of the proper docket fee. RTC, instead of dismissing outright RSB’s Complaint, granted RSB time to pay the additional docket fees. Despite the seeming munificence of the RTC, petitioner refused to pay the additional docket fees assessed against it, believing that it had

already paid the correct amount before, pursuant to Section 7(b)(1), Rule 141 of the Rules of Court, as amended. ISSUE: WON the annulment of deed of sale involving a real property is incapable of pecuniary estimation for the purpose of paying the correct amount of docket fees. (NO. Case is a real action.) HELD/RATIO: In Manchester Development Corporation v. Court of Appeals, the Court explicitly pronounced that “[t]he court acquires jurisdiction over any case only upon the payment of the prescribed docket fee.” Hence, the payment of docket fees is not only mandatory, but also jurisdictional. In Sun Insurance Office, Ltd. (SIOL) v. Asuncion, the Court laid down guidelines for the implementation of its previous pronouncement in Manchester under particular circumstances, to wit: 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. 2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee. After Tan and Obiedo had the Deeds of Absolute Sale presented to the Register of Deeds, they were already issued TCTs over the real properties in question, in their own names. No matter how fastidiously RSB attempts to conceal them, the allegations and reliefs it sought in its Complaint appears to be ultimately a real action, involving as they do the recovery by RSM of its title to and possession of the five parcels of land from Tan and Obiedo. Considering that the complaint is a real action, the Rule requires that "the assessed value of the property, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees. A real action indisputably involves real property. The docket fees for a real action would still be determined in accordance with the value of the real property involved

therein; the only difference is in what constitutes the acceptable value. In computing the docket fees for cases involving real properties, the courts, instead of relying on the assessed or estimated value, would now be using the fair market value of the real properties (as stated in the Tax Declaration or the Zonal Valuation of the Bureau of Internal Revenue, whichever is higher) or, in the absence thereof, the stated value of the same. DISPOSITIVE: Petition for Review DENIED. Decision of the CA affirming the Decision of the RTC Naga City is AFFIRMED. Big-a Mike-a