LEGAL NOTE 0048: PRIMER ON COURT JURISDICTION AND FILING FEES
SOURCE: HOME GUARANTY CORPORATION VS. R-II BUILDERS INC., AND NATIONAL HOUSING AUTHORITY (G.R. NO. 192649, 9 MARCH 2011, PEREZ, J.) SUBJECTS: JURISDICTION OF COURTS, HOW DETERMINED; FILING FEES IN CONNECTION WITH AMENDED COMPLAINT; CAN COURT WITHOUT JURISDICTION RE-RAFFLE CASE TO ANOTHER COURT? (BRIEF TITLE: HOME GUARANTY VS. R-11 BUILDERS ET AL.)
WHAT IS THE DEFINITION OF JURISDICTION?
JURISDICTION IS DEFINED AS THE AUTHORITY TO HEAR AND DETERMINE A CAUSE OR THE RIGHT TO ACT IN A CASE.[37]
HOW IS JURISDICTION OVER A SUBJECT MATTER DETERMINED?
BY ALLEGATIONS IN THE COMPLAINT, THE LAW AND RELIEF BEING SOUGHT.
The rule is settled that a court’s jurisdiction over the subject matter is determined by the relevant allegations in the complaint,[39] the law in effect when the action is filed,[40] and the character of the relief sought irrespective of whether the plaintiff is entitled to all or some of the claims asserted.[41]
HOW DOES COURT ACQUIRE JURISDICTION OVER A CASE?
ONLY UPON PAYMENT OF THE PRESCRIBED FILING AND DOCKET FEES.
Consistent with Section 1, Rule 141 of theRevised Rules of Court which provides that the prescribed fees shall be paid in full “upon the filing of the pleading or other application which initiates an action or proceeding”, the well-entrenched rule is to the effect that a court acquires jurisdiction over a case only upon the payment of the prescribed filing and docket fees.[42]
RTC, A DESIGNATED SPECIAL COMMERCIAL COURT, FOUND OUT THAT IT HAS NO JURISDICTION OVER THE CASE SINCE RTC SAID THE SUBJECT MATTER IS NOT INTRA-CORPORATE. IT ORDERED A RERAFFLE OF THE CASE. IS RTC CORRECT?
NO. RTC SHOULD HAVE ORDERED THE DISMISSAL OF THE COMPLAINT, SINCE A COURT WITHOUT JURISDICTION OVER THE SUBJECT MATTER CANNOT TRANSFER THE CASE TO ANOTHER COURT.[51] INSTEAD, IT SHOULD HAVE SIMPLY ORDERED THE DISMISSAL OF THE COMPLAINT, CONSIDERING THAT THE AFFIRMATIVE DEFENSES FOR WHICH HGC SOUGHT HEARING INCLUDED ITS LACK OF JURISDICTION OVER THE CASE.
A RE-RAFFLE WHICH CAUSES A TRANSFER OF THE CASE INVOLVES COURTS WITH THE SAME SUBJECT MATTER JURISDICTION; IT CANNOT INVOLVE COURTS WHICH HAVE DIFFERENT JURISDICTIONS EXCLUSIVE OF THE OTHER. MORE APT IN THIS CASE, A RE-RAFFLE OF A CASE CANNOT CURE A JURISDICTIONAL DEFECT.
The record shows that R-II Builders’ original complaint dated 23 August 2005 was initially docketed as Civil Case No. 05-113407 before Branch 24 of the Manila, a designated Special Commercial Court.[43] With HGC’s filing of a motion for a preliminary hearing on the affirmative defenses asserted in its answer[44] and R-II Builders’ filing of its Amended and Supplemental Complaint dated 31 July 2007,[45] said court issued an order dated 2 January 2008 ordering the re-raffle of the case upon the finding that the same is not an intra-corporate dispute.[46] In a clarificatory order dated 1 February 2008,[47] the same court significantly took cognizance of its lack of jurisdiction over the case in the following wise:
At the outset, it must be stated that this Court is a designated Special Commercial Court tasked to try and hear, among others, intra-corporate controversies to the exclusion of ordinary civil cases.
When the case was initially assigned to this Court, it was classified as an intra-corporate case. However, in the ensuing proceedings relative to the affirmative defences raised by defendants, even the plaintiff conceded that the case is not an intra-corporate controversy or even if it is, this Court is without authority to hear the same as the parties are all housed in Quezon City.
Thus, the more prudent course to take was for this Court to declare that it does not have the authority to hear the complaint it being an ordinary civil action. As to whether it is personal or civil, this Court would rather leave the resolution of the same to Branch 22 of this Court. (Italics supplied).
We find that, having squarely raised the matter in its Rule 65 petition for certiorari and prohibition docketed as CA-G.R. SP No. 111153,[48] HGC correctly faults the CA for not finding that Branch 24 of the Manila RTC had no authority to order the transfer of the case to respondent RTC.[49] Being outside the jurisdiction of Special Commercial Courts, the rule is settled that cases which are civil in nature, like the one commenced by R-II Builders, should be threshed out in a regular court.[50] With its acknowledged lack of jurisdiction over the case, Branch 24 of the Manila RTC should have ordered the dismissal of the complaint, since a court without subject matter jurisdiction cannot transfer the case to another court.[51] Instead, it should have simply ordered the dismissal of the complaint, considering that the affirmative defenses for which HGC sought hearing included its lack of jurisdiction over the case.
Calleja v. Panday,[52] while on facts the other way around, i.e., a branch of the RTC exercising jurisdiction over a subject matter within the Special Commercial Court’s authority, dealt squarely with the issue:
Whether a branch of the Regional Trial Court which has no jurisdiction to try and decide a case has authority to remand the same to another co-equal Court in order to cure the defects on venue and jurisdiction.
Calleja ruled on the issue, thus:
Such being the case, RTC Br. 58 did not have the requisite authority or power to order the transfer of the case to another branch of the Regional Trial Court. The only action that RTC-Br. 58 could take on the matter was to dismiss the petition for lack of jurisdiction.
Certainly, the pronouncement of Br. 24, the Special Commercial Court, in its Joint Order of 2 January 2008 that the case is not an intracorporate controversy, amplified in its Order of 1 February 2008 that it “does not have the authority to hear the complaint it being an ordinary civil action” is incompatible with the directive for the re-raffle of the case and to “leave the resolution of the same to Branch 22 of this Court.” Such a directive is an exercise of authority over the case, which authority it had in the same breath declared it did not have. What compounds the jurisdictional error is the fact that at the time of its surrender of jurisdiction, Br. 24 had already acted on the case and had in fact, on 26 October 2005, issued the writ of preliminary injunction sought by herein respondent R-II Builders. At that point, there was absolutely no reason which could justify a re-raffle of the case considering that the order that was supposed to have caused the re-raffle was not an inhibition of the judge but a declaration of absence of jurisdiction. So faulty was the order of re-raffle that it left the impression that its previously issued preliminary injunction remained effective since the case from which it issued was not dismissed but merely transferred to another court. A re-raffle which causes a transfer of the case involves courts with the same subject matter jurisdiction; it cannot involve courts which have different jurisdictions exclusive of the other. More apt in this case, a re-raffle of a case cannot cure a jurisdictional defect.
R-2 BUILDERS FILED A COMPLAINT, THEN AN AMENDED AND SUPPLEMENTAL COMPLAINT. WHEN ASSESSMENT OF FILING FEE WAS MADE, R-2 BUILDERS WITHREW ITS AMENDED AND SUPPLEMENTAL COMPLAINT AND FILED A SECOND AMENDED COMPLAINT APPARENTLY TO AVOID PAYING HUGE FILING FEES. IS THIS CORRECT?
NO BECAUSE IT IS CLEAR THAT THE INTENTION OF R-2 BUILDERS IS TO EVADE PAYMENT OF FILING FEES. DECISIONS HAD BEEN CONSISTENTLY PREMISED ON THE WILLINGNESS OF THE PARTY TO PAY THE CORRECT DOCKET FEES AND/OR ABSENCE OF INTENTION TO EVADE PAYMENT OF THE CORRECT DOCKET FEES. THIS CANNOT BE SAID OF R-II BUILDERS WHICH NOT ONLY FAILED TO PAY THE CORRECT DOCKET FEES FOR ITS ORIGINAL COMPLAINT AND AMENDED AND SUPPLEMENTAL COMPLAINT BUT ALSO CLEARLY EVADED PAYMENT OF THE SAME BY FILING ITS SECOND AMENDED COMPLAINT.
The importance of filing fees cannot be over-emphasized for they are intended to take care of court expenses in the handling of cases in terms of costs of supplies, use of equipment, salaries and fringe benefits of personnel, and others, computed as to man-hours used in the handling of each case. The payment of said fees, therefore, cannot be made dependent on the result of the action taken without entailing tremendous losses to the government and to the judiciary in particular.[80] For non-payment of the correct docket fees which, for real actions, should be computed on the basis of the assessed value of the property, or if there is none, the estimated value thereof as alleged by the claimant,[81] respondent RTC should have denied admission of R-II Builders’ Second Amended Complaint and ordered the dismissal of the case. Although a catena of decisions rendered by this Court eschewed the application of the doctrine laid down in the Manchester case,[82] said decisions had been consistently premised on the willingness of the party to pay the correct docket fees and/or absence of intention to evade payment of the correct docket fees. This cannot be said of R-II Builders which not only failed to pay the correct docket fees for its original complaint and Amended and Supplemental Complaint but also clearly evaded payment of the same by filing its Second Amended Complaint.
By itself, the propriety of admitting R-II Builders’ Second Amended Complaint is also cast in dubious light when viewed through the prism of the general prohibition against amendments intended to confer jurisdiction where none has been acquired yet. Although the policy in this jurisdiction is to the effect that amendments to pleadings are favored and liberally allowed in the interest of justice, amendment is not allowed where the court has no jurisdiction over the original complaint and the purpose of the amendment is to confer jurisdiction upon the court.[83] Hence, with jurisdiction over the case yet to properly attach, HGC correctly fault the CA for upholding respondent RTC’s admission of R-II Builders’ Second Amended Complaint despite non-payment of the docket fees for its original complaint and Amended and Supplemental Complaint as well as the clear intent to evade payment thereof.
WHAT IS THE RULE ON FILING FEES?
JURISDICTION OVER ANY CASE IS ACQUIRED ONLY UPON PAYMENT OF THE PRESCRIBED DOCKET FEE. THIS IS BOTH MANDATORY AND JURISDICTIONAL. THE BASIS IS THE CASE OF MANCHESTER DEVELOPMENT CORPORATION VS. CA.
Applying the rule that “a case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in court” in the landmark case of Manchester Development Corporation v. Court of Appeals,[76] this Court ruled that jurisdiction over any case is acquired only upon the payment of the prescribed docket fee which is both mandatory and jurisdictional.
WAS THERE A SUBSEQUENT RULING?
YES, IN THE CASE OF SUN INSURANCE OFFICE LTD VS. ASUNCION, THE COURT RULED THAT IF THE COURT MAKES AN AWARD NECESSITATING AN INCREASE IN FILING FEE SUCH CORRESPONDING FILING FEE IS A LIEN ON THE JUDGMENT.
To temper said ruling (Manchester case) , the Court subsequently issued the following guidelines in Sun Insurance Office, Ltd. v. Hon. Maximiano Asuncion,[77] viz.:
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.
[1] Rollo, pp. 139-165.
[2] Id. at 165.
[3] Id. at 1063-1077.
[4] Id. at 1078-1087.
[5] Id. at 1063.
[6] Id. at 1068-1069.
[7] Id. at 1088.
[8] Id. at 19-20 and 1094.
[9] Id. at 1112-1117.
[10] Id. at 20-22, 354, 142-143 and 505.
[11] Id. at 22 and 356.
[12] Id. at 1118-1119.
[13] Id. at 348-376.
[14] Id. at 24 and 146.
[15] Id. at 1416-1423.
[16] Id. at 440-445.
[17] Id. at 446-489.
[18] Id. at 435-437.
[19] Id. at 438-439.
[20] Id. at 490-495.
[21] Id. at 496-500.
[22] Id. at 496-538.
[23] Id. at 539-549.
[24] Id. at 585-590.
[25] Id. at 325-332.
[26] Id. at 613-656.
[27] Id. at 775-793.
[28] Id. at 823-827.
[29] Id. at 333-347.
[30] Id. at 178-313.
[31] Id. at 139-165.
[32] Id. at 154-165.
[33] Id. at 1375-1415.
[34] Id. at 40-41.
[35] Id. at 1451-1484.
[36] Id. at 1485-1488.
[37] Union Bank of the Philippines v. Securities and Exchange Commission, G.R. No. 165382, 17 August 2006, 499 SCRA 253, 263.
[38] Proton Pilipinas Corporation v. Republic, G.R. No. 165027, 16 October 2006, 504 SCRA 528, 540.
[39] General Milling Corporation v. Uytengsu III, G.R. No. 160514, 30 June 2006, 494 SCRA 241, 245.
[40] Bokingo v. Court of Appeals, G.R. No. 161739, 4 May 2006, 489 SCRA 521, 530.
[41] AC Enterprises, Inc. v. Frabelle Properties Corporation, G.R. No. 166744, 2 November 2006, 506 SCRA 625, 654-655.
[42] Lacson v. Reyes, G.R. No. 86250, 26 February 1990, 182 SCRA 729, 733.
[43] Rollo, pp. 348-377.
[44] Id. at 1416-1423.
[45] Id. at 446-487.
[46] Id. at 435-437.
[47] Id. at 438-439.
[48] Id. at 211-217.
[49] Id. at 41-47.
[50] Atwell v. Concepcion Progressive Association, Inc., G.R. No. 169370, 14 April 2008, 551 SCRA 272, 281.
[51] Igot v. Court of Appeals, G.R. No. 150794, 17 August 2004, 436 SCRA 668, 676.
[52] G.R. No. 168696, 28 February 2006, 483 SCRA 680, 693.
[53] Rollo, pp. 490-495.
[54] Id. at 496-538.
[55] Id. at 539-549.
[56] Id. at 325-332.
[57] Id. at 327-328.
[58] Id. at 333-347.
[59] Id. at 157-158.
[60] Id. at 364-371.
[61] Id. at 376.
[62] Id. at 357-358.
[63] Id. at 436.
[64] Id. at 460-463.
[65] Radio Communications of the Philippines, Inc. v. Court of Appeals, 435 Phil. 62, 66 (2002).
[66] Marcos-Araneta v. Court of Appeals, G.R. No. 154096, 22 August 2008, 563 SCRA 41, 62-63.
[67] Davao Light and Power Co, Inc. v. Court of Appeals, 415 Phil. 630-631 (2001).
[68] Infante v. Aran Builders, Inc., G.R. No. 156596, 24 August 2007, 531 SCRA 123, 129-130.
[69] Russel v. Hon. Augustine A. Vestil, 364 Phil. 392, 400 (1999).
[70] 423 Phil. 491, 501 (2001).
[71] G.R. No. 175914, 10 February 2009, 578 SCRA 283.
[72] Id. at 302-303.
[73] Rollo, pp. 369-370.
[74] Id. at 436.
[75] Id. at 485-486.
[76] 233 Phil. 579, 584 (1987).
[77] G.R. Nos. 79937-38, 13 February 1989, 170 SCRA 274, 285.
[78] Rollo, pp. 501-538.
[79] En Banc Resolution, G.R. Nos. 153690 and 157381.
[80] Suson v. Court of Appeals, 343 Phil. 820, 825 (1997) citing Pilipinas Shell Petroleum Corp. v. Court of Appeals, 171 SCRA 674.
[81] Serrano v. Delica, 503 Phil. 73, 77 (2005).
[82] Negros Oriental Planters Association, Inc. v. Presiding Judge of RTC-Negros Occidental, Br. 52, Bacolod City, G.R. No. 179878, 24 December 2008, 575 SCRA 575, 587 ;Spouses Go v. Tong, 462 Phil. 256 (2003); Soriano v. Court of Appeals, 416 Phil. 226 (2001); Yambao v. Court of Appeals, 399 Phil. 712 (2000); Mactan Cebu International Airport Authority v. Mangubat, 371 Phil. 393, (1999) ; Ng Soon v. Hon. Alday, 258 Phil. 848 (1989).
[83] Tirona v. Hon. Alejo, 419 Phil. 285, 300 (2001).
J.A.B. Bulao & Associates 