J.A.B. Bulao & Associates

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).

 LEGAL NOTE 0047: THE BNPP STORY (BATAAN NUCLEAR POWER PLANT)

 SOURCE:

 With Due Respect
After 35 years, still languishing

By Artemio V. Panganiban
Philippine Daily Inquirer
First Posted 01:24:00 03/27/2011

The BNPP was constructed at the cost of $2 billion during the martial law years. After Cory Aquino ascended to the presidency, it was abandoned for various reasons. Up to the present, it remains inoperable and appears to be rotting to inutility.

In August 1973, barely a year after martial law was declared, President Ferdinand Marcos instructed the National Power Corporation (NPC) to “pursue, supervise and undertake the construction and the eventual operation of the nuclear power plant in Morong, Bataan.”

Several companies—including Westinghouse Electric Company and its associate, Burns & Roe—showed interest in the project. Westinghouse retained Herminio Disini to act as its, to quote the Supreme Court, “go-between with Marcos. Disini was known to be the late president’s close personal associate, whose wife was then First Lady Imelda R. Marcos’ first cousin and the Marcos family’s personal physician.”

On April 24, 1974, Westinghouse sent Marcos, through Disini, a letter containing its turnkey proposal. Upon receipt of the letter and without public bidding, Marcos informed NPC of his preference for Westinghouse. In a Cabinet meeting on June 6, 1974, Marcos categorically stated his choice of Westinghouse and authorized NPC General Manager Ramon Ravanzo to sign a letter of commitment to Westinghouse for the supply and construction of “two 626-megawatt nuclear power plants.”

Over the objections of three key officials—Executive Secretary Alejandro Melchor, Solicitor General Estelito Mendoza and Ravanzo himself—saying that the Westinghouse proposal was “highly onerous and disadvantageous to the government,” Marcos rammed through the project. The contract was signed 35 years ago on Feb. 9, 1976.

Criminal charges. A decade later, after Cory Aquino took over Malacañang, the Presidential Commission on Good Government (PCGG) charged Disini (and others) with violations of our criminal laws. After another decade, on May 31, 1997, then Ombudsman Aniano Desierto dismissed the charges “for lack of prima facie evidence.”

Ironically, in an action brought by the Philippines against Westinghouse, the District Court of New Jersey (USA)—after evaluating the same evidence submitted to Desierto—ruled on Sept. 19, 1991 that “there (was) sufficient evidence of bribery.”

The PCGG haled Desierto on certiorari to the Supreme Court (PCGG v. Desierto), which on Feb. 10, 2003 directed the Office of the Ombudsman “to file in the proper court the appropriate criminal charge(s).” I shall never forget that well-fought case because I started as a dissenter during our internal deliberations. The justice to whom the case was raffled sided with Desierto. But after a majority in the Court voted with me, I became the decision writer (or ponente).

The ponencia detailed the many pieces of testimonial and documentary evidence showing why Desierto abused his discretion in dismissing the charges. Among these were almost a hundred pages of affidavits of top insider-officials of both Westinghouse (and Burns & Roe) and Herdis Management and Investment Corp. (Disini’s outfit) showing “probable cause” for the crimes charged.

Good laws and good men. As directed by the Supreme Court, Simeon Marcelo (Desierto’s successor) thereafter filed criminal charges in the Sandiganbayan against Disini. Up to now, however, the case is still languishing in the anti-graft court for various reasons. For one, the Sandiganbayan could not, for a long while, acquire jurisdiction over the accused because he could not be located. He allegedly migrated to Austria. For another, several witnesses, especially the American officials of Westinghouse, could not be found either. Time has devious ways of devouring evidence, memory and the will to prosecute.
 

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THE BREAKDOWN of the Fukushima Daiichi Nuclear Power Station in earthquake- and tsunami-devastated northern Japan has revived public debates on the feasibility and wisdom of reactivating the Bataan Nuclear Power Plant (BNPP). These debates all remind us that, despite not benefiting from it, our impoverished people dutifully paid in installment for this nuclear monument. As a retired jurist, I am in turn sadly reminded that, despite decades-old charges of corruption, bribery and other crimes attending the BNPP, no one has yet been convicted or sent to jail for the fiasco.

The BNPP was constructed at the cost of $2 billion during the martial law years. After Cory Aquino ascended to the presidency, it was abandoned for various reasons. Up to the present, it remains inoperable and appears to be rotting to inutility.

In August 1973, barely a year after martial law was declared, President Ferdinand Marcos instructed the National Power Corporation (NPC) to “pursue, supervise and undertake the construction and the eventual operation of the nuclear power plant in Morong, Bataan.”

Several companies—including Westinghouse Electric Company and its associate, Burns & Roe—showed interest in the project. Westinghouse retained Herminio Disini to act as its, to quote the Supreme Court, “go-between with Marcos. Disini was known to be the late president’s close personal associate, whose wife was then First Lady Imelda R. Marcos’ first cousin and the Marcos family’s personal physician.”

On April 24, 1974, Westinghouse sent Marcos, through Disini, a letter containing its turnkey proposal. Upon receipt of the letter and without public bidding, Marcos informed NPC of his preference for Westinghouse. In a Cabinet meeting on June 6, 1974, Marcos categorically stated his choice of Westinghouse and authorized NPC General Manager Ramon Ravanzo to sign a letter of commitment to Westinghouse for the supply and construction of “two 626-megawatt nuclear power plants.”

Over the objections of three key officials—Executive Secretary Alejandro Melchor, Solicitor General Estelito Mendoza and Ravanzo himself—saying that the Westinghouse proposal was “highly onerous and disadvantageous to the government,” Marcos rammed through the project. The contract was signed 35 years ago on Feb. 9, 1976.

Criminal charges. A decade later, after Cory Aquino took over Malacañang, the Presidential Commission on Good Government (PCGG) charged Disini (and others) with violations of our criminal laws. After another decade, on May 31, 1997, then Ombudsman Aniano Desierto dismissed the charges “for lack of prima facie evidence.”

Ironically, in an action brought by the Philippines against Westinghouse, the District Court of New Jersey (USA)—after evaluating the same evidence submitted to Desierto—ruled on Sept. 19, 1991 that “there (was) sufficient evidence of bribery.”

The PCGG haled Desierto on certiorari to the Supreme Court (PCGG v. Desierto), which on Feb. 10, 2003 directed the Office of the Ombudsman “to file in the proper court the appropriate criminal charge(s).” I shall never forget that well-fought case because I started as a dissenter during our internal deliberations. The justice to whom the case was raffled sided with Desierto. But after a majority in the Court voted with me, I became the decision writer (or ponente).

The ponencia detailed the many pieces of testimonial and documentary evidence showing why Desierto abused his discretion in dismissing the charges. Among these were almost a hundred pages of affidavits of top insider-officials of both Westinghouse (and Burns & Roe) and Herdis Management and Investment Corp. (Disini’s outfit) showing “probable cause” for the crimes charged.

Good laws and good men. As directed by the Supreme Court, Simeon Marcelo (Desierto’s successor) thereafter filed criminal charges in the Sandiganbayan against Disini. Up to now, however, the case is still languishing in the anti-graft court for various reasons. For one, the Sandiganbayan could not, for a long while, acquire jurisdiction over the accused because he could not be located. He allegedly migrated to Austria. For another, several witnesses, especially the American officials of Westinghouse, could not be found either. Time has devious ways of devouring evidence, memory and the will to prosecute.

With the elevation of Cory Aquino’s son to the presidency, this long delayed case should find the light of day. However, President Aquino’s anti-corruption program is itself still mired in a whirlpool of difficulty and delay.

Without alluding to anyone in particular, the moral lesson is that, despite the well-intentioned reforms of our 1987 Constitution to grant plenary powers, independence and protection to our constitutional offices, it takes courageous and patriotic officials to clear the barnacles of corruption and to steer the ship of state through the storms buffeting the country.

One thing it is to have the institutions and laws to fight graft. Another thing it is to have steel-willed men and women who will occupy these institutions and enforce these laws. Worse it is, when the inept and uncaring capture these powerful offices. Then, even reform-minded presidents would find extreme difficulty to carry out their mandates, clean the stables and govern wisely.

Will we ever find the right combination of good laws and good men to lift our people from the mire of corruption and poverty?

LEGAL NOTE 0046: FORECLOSURE DUE TO NON-PAYMENT OF CONDO DUES IS AN INTRA CORPORATE DISPUTE.

SOURCE: CHATEAU DE BAIE CONDOMINIUM CORPORATION VS. SPS. RAYMOND AND MA. ROSARIO MORENO (G.R. NO. 186271, 23 FEBRUARY 2011, BRION, J.) SUBJECTS: QUESTIONS ON ASSESSMENT OF CONDO DUES ARE INTRA-CORPORATE; FORECLOSURE ALSO INTRA-CORPORATE. (BRIEF TITLE CHATEU DE BAIE VS. SPS. MORENO)

SPOUSES MORENO FAILED TO PAY CONDO DUES TO CHATEAU DE BAIE. THE LATTER FORECLOSED THEIR CONDOS. SPOUSES MORENO FILED A CASE AT RTC FOR ACCOUNTING OF CONDO DUES,  ANNULMENT OF FORECLOSURE AND DAMAGES. CHATEAU DE BAIE FILED MOTION TO DISMISS ON GROUND THAT HLURB HAS JURISDICTION. WHICH HAS JURISDICTION?

THE RTC HAS JURISDICTION BECAUSE THE ISSUES RAISED ARE INTRA-CORPORATE. SINCE THE EXTRAJUDICIAL SALE WAS AUTHORIZED BY THE CONDOMINIUM CORPORATION’S BY-LAWS AND WAS THE RESULT OF THE NONPAYMENT OF THE ASSESSMENTS, THE LEGALITY OF THE FORECLOSURE WAS NECESSARILY AN ISSUE WITHIN THE EXCLUSIVE ORIGINAL JURISDICTION OF THE SEC (NOW RTC). 

The facts of this case are similar to the facts in Wack Wack Condominium Corporation, et al. v. Court of Appeals, et al.,^[20] where we held  that the dispute as to the validity of the assessments is purely an intra-corporate matter between Wack Wack Condominium Corporation and its stockholder, Bayot, and is, thus, within the exclusive original jurisdiction of the Securities and Exchange Commission (SEC).^[21]   We ruled in that case that since the extrajudicial sale was authorized by Wack Wack Condominium Corporation’s by-laws and was the result of the nonpayment of the assessments, the legality of the foreclosure was necessarily an issue within the exclusive original jurisdiction of the SEC.  We added that:

Just because the property has already been sold extrajudicially does not mean that the questioned assessments have now become legal and valid or that they have become immaterial. In fact, the validity of the foreclosure depends on the legality of the assessments and the issue must be determined by the SEC if only to insure that the private respondent was not deprived of her property without having been heard. If there were no valid assessments, then there was no lien on the property, and if there was no lien, what was there to foreclose? Thus, SEC Case No. 2675 has not become moot and academic and the SEC retains its jurisdiction to hear and decide the case despite the extrajudicial sale.^[22]

^* No Part.

^** Designated Acting Chairperson of the Third Division effective February 16, 2011, per Special Order No. 295 dated January 24, 2011.

^*** Designated additional Member of the Third Division per Special Order No. 944 dated February 9, 2011.

^[1]  Penned by Associate Justice Rosmari D. Carandang, and concurred in by Presiding Justice Conrado M. Vasquez, Jr. and Associate Justice Mariflor P. Punzalan Castillo; rollo, pp. 24-33.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

^[2]  Annex “C,” Petition; id. at 37-38.

^[3]  January 24, 2008.

^[4]               Section 20.  An assessment upon any condominium made in accordance with a duly registered declaration of restrictions shall be an obligation of the owner thereof at the time the assessment is made. The amount of any such assessment plus any other charges thereon, such as interest, costs (including attorney’s fees) and penalties, as such may be provided for in the declaration of restrictions, shall be and become a lien upon the condominium assessed when the management body causes a notice of assessment to be registered with the Register of Deeds of the city or province where such condominium project is located. The notice shall state the amount of such assessment and such other charges thereon as may be authorized by the declaration of restrictions, a description of the condominium unit against which same has been assessed, and the name of the registered owner thereof. Such notice shall be signed by an authorized representative of the management body or as otherwise provided in the declaration of restrictions. Upon payment of said assessment and charges or other satisfaction thereof, the management body shall cause to be registered a release of the lien.  

Such lien shall be superior to all other liens registered subsequent to the registration of said notice of assessment except real property tax liens and except that the declaration of restrictions may provide for the subordination thereof to any other liens and encumbrances.

Such liens may be enforced in the same manner provided for by law for the judicial or extra-judicial foreclosure of mortgages of real property. Unless otherwise provided for in the declaration of restrictions, the management body shall have power to bid at the foreclosure sale. The condominium owner shall have the same right of redemption as in cases of judicial or extra-judicial foreclosure of mortgages.

^[5]  Rollo, p. 43.

^[6]  Entitled Oscar S. Salvacion v. Atty. Clemente E. Boloy, in his capacity as Ex-Officio Sheriff, Office of the Clerk of Court, Regional Trial Court, Parañaque City, Branch 196, and Chateau de Baie Condominium Corporation.

^[7] An Act to Regulate the Sale of Property Under Special Powers Inserted In or Annexed to Real Estate Mortgages (approved on March 6, 1924).

^[8] Rollo, pp. 42-49; penned by Associate Justice Japar B. Dimaampao, and concurred in by Associate Justice Portia Aliño-Hormachuelos and Associate Justice Mario L. Guariña III.

^[9]  Id. at 51-52.

^[10] G.R. No. 178549, entitled Oscar S. Salvacion v. Chateau de Baie Condominium Corporation.

^[11] Rollo, p. 53.

^[12] On May 11, 2005.

^[13] Rollo, pp. 37-38.

^[14] Rule 1, Section 8. Prohibited pleadings. — The following pleadings are prohibited:

(1) Motion to dismiss;

(2) Motion for a bill of particulars;

(3) Motion for new trial, or for reconsideration of judgment or order, or for re-opening of trial;

(4) Motion for extension of time to file pleadings, affidavits or any other paper, except those filed due to clearly compelling reasons. Such motion must be verified and under oath; and

(5) Motion for postponement and other motions of similar intent, except those filed due to clearly compelling reasons. Such motion must be verified and under oath.

^[15] Rollo, pp. 39-40.

^[16] Id. at 24-33.

^[17] Id. at 31-32.

^[18] In its February 5, 2009 Resolution; id. at 35-36.

^[19] Id. at 14.

^[20] G.R. No. 78490, November 23, 1992, 215 SCRA 850.

^[21] Section 5.2 of the Securities Regulation Code (R.A. No. 8799) transferred exclusive and original jurisdiction of the SEC over actions involving intra-corporate controversies to the courts of general jurisdiction or the appropriate RTC.   

^[22]  Supra note 20, at 856.