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CASE 2011-0080: ASIA UNITED BANK, CHRISTINE T. CHAN, AND FLORANTE C. DEL MUNDO VS. GOODLAND COMPANY, INC. (G.R. NO. 191388, 9 MARCH 2011, DEL CASTILLO, J.) SUBJECT: FORUM SHOPPING. 2 CASES DISMISSED ON GROUND OF FORUM SHOPPING. (BRIEF TITLE: ASIA UNITED BANK ET AL VS. GOODLAND).

Filed under: LATEST SUPREME COURT CASES — 1 Comment
March 28, 2011

CASE NO. 2011-0080: ASIA UNITED BANK, CHRISTINE T. CHAN, AND FLORANTE C. DEL MUNDO VS. GOODLAND COMPANY, INC. (G.R. NO.  191388, 9 MARCH 2011, DEL CASTILLO, J.) SUBJECT: FORUM SHOPPING. 2 CASES DISMISSED ON GROUND OF FORUM SHOPPING. (BRIEF TITLE: ASIA UNITED BANK ET AL VS. GOODLAND). 

   

Republic of the Philippines

Supreme Court

Manila

FIRST DIVISION

ASIA UNITED BANK, CHRISTINE T. CHAN, and FLORANTE C. DEL MUNDO,   G.R. No.  191388

 

Present:
     Petitioners,    
    CORONA, C. J., Chairperson,

VELASCO, JR.,
    LEONARDO-DE CASTRO,
                           – versus –   DEL CASTILLO, and
 

 

   PEREZ, JJ.
     
GOODLAND COMPANY, INC.,   Promulgated:
 Respondent.    March 9, 2011

x – – – – – – – – – – – – – – – –  – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – x

 

D E C I S I O N

DEL CASTILLO, J.:

            The costly consequence of forum shopping should remind the parties to ever be mindful against abusing court processes.

            Before the Court is a Petition for Review[1] under Rule 45 of the Rules of Court assailing the Decision[2] dated June 5, 2009 of the Court of Appeals (CA) in CA-G.R. CV No. 90114, as well as its Resolution[3] dated February 17, 2010, which denied a reconsideration of  the  assailed  Decision.   The dispositive portion

of the appellate court’s Decision reads:

                WHEREFORE, the appeal is GRANTED and the appealed Order dated March 15, 2007 is REVERSED and SET ASIDE.  In lieu thereof, another is entered ordering the DENIAL of appellee bank’s motion to dismiss and directing the REINSTATEMENT of appellant’s complaint as well as the REMAND of the case to the trial court for further proceedings.

 

SO ORDERED.[4]

Factual Antecedents

 

            Respondent Goodland Company, Inc. (Goodland) executed a Third Party Real Estate Mortgage (REM) over two parcels of land located in the Municipality of Sta. Rosa, Laguna and covered by Transfer Certificates of Title (TCT) Nos. 321672[5] and 321673[6] in favor of petitioner Asia United Bank (AUB).  The mortgage secured the obligation amounting to P250 million of Radiomarine Network, Inc. (RMNI), doing business as Smartnet Philippines, to AUB.  The REM was duly registered on March 8, 2001 in the Registry of Deeds of Calamba, Laguna.[7] 

            Goodland then filed a Complaint[8] docketed as Civil Case No. B-6242 before Branch 25 of the Regional Trial Court (RTC) of Biñan, Laguna for the annulment of the REM on the ground that the same was falsified and done in contravention of the parties’ verbal agreement (Annulment Case).   

            While the Annulment Case was pending, RMNI defaulted in the payment of its obligation to AUB, prompting the latter to exercise its right under the REM to extrajudicially foreclose the mortgage.  It filed its Application for Extrajudicial Foreclosure of Real Estate Mortgage under Act No. 3135, as amended with the Office of the Executive Judge of the RTC of Biñan, Laguna on October 19, 2006.[9]  The mortgaged properties were sold in public auction to AUB as the highest bidder.  It was issued aCertificate of Sale, which was registered with the Registry of Deeds of Calamba on November 23, 2006.

            Before AUB could consolidate its title, Goodland filed on November 28, 2006 another Complaint[10] docketed as Civil Case No. B-7110 before Branch 25 of the RTC of Biñan, Laguna, against AUB and its officers, petitioners Christine Chan and Florante del Mundo.  This Complaint sought to annul the foreclosure sale and to enjoin the consolidation of title in favor of AUB (Injunction Case).  Goodland asserted the alleged falsified nature of the REM as basis for its prayer for injunction. 

            A few days later,  AUB consolidated its ownership over the foreclosed properties and obtained new titles, TCT Nos. T-657031[11] and 657032,[12]in its name from the Registry of Deeds of Calamba.  

            Petitioners then filed on December 11, 2006 a Motion to Dismiss with Opposition to a Temporary Restraining Order in the Injunction Case.[13]  They brought to the trial court’s attention Goodland’s forum shopping given the pendency of the Annulment Case.  They argued that the two cases both rely on the alleged falsification of the real estate mortgage as basis for the reliefs sought. 

Ruling of the Regional Trial Court (Injunction Case)

            On March 15, 2007, the trial court acted favorably on petitioners’ motion and dismissed the Injunction Case with prejudice on the grounds of forum shopping and litis pendentia.[14]  The trial court explained that the Injunction Case and the Annulment Case are both founded on the same transactions, same essential facts and circumstances, and raise substantially the same issues. The addition of the application for a writ of preliminary injunction does not vary the similarity between the two cases.  The trial court further noted that Goodland could have prayed for injunctive relief as ancillary remedy in the Annulment Case.  Finally, the trial court stated that any judgment in the Annulment Case regarding the validity of the REM would constitute res judicata on the Injunction Case.

Ruling of the Court of Appeals[15] (Injunction Case)

 

            Goodland appealed[16] the same to the CA. 

            Meanwhile, AUB filed an Ex-Parte Application for Writ of Possession on December 18, 2006, which was granted on March 15, 2007.  The writ was issued on March 26, 2007 and AUB obtained possession of the foreclosed properties on April 2, 2007.

 

On June 5, 2009, the CA promulgated its assailed Decision, which ruled in favor of Goodland and ordered the reinstatement of the Injunction Case in the trial court.[17] 

            The CA rejected petitioners’ contention that Goodland’s appeal raised pure questions of law,[18] which are within the jurisdiction of the Supreme Court under Rule 45.[19]  Instead, it found Goodland’s Rule 41 appeal to be proper because it involvedboth questions of fact and of law.  The CA held that a question of fact existed because petitioners themselves questioned in their Brief the veracity of Goodland’s Certification of Non-Forum Shopping.[20]

The CA conceded that Goodland’s Brief failed to comply with the formal requirements, which are all grounds for the dismissal of the appeal,[21] e.g., failure of the appellant to serve and file the required number of copies of its brief on all appellees and absence of page references to the record.  However, it relaxed the rules so as to completely resolve the rights and obligations of the parties. The CA, however, warned Goodland that its future lapses will be dealt with more severely.[22]

            The CA further ruled against petitioners’ argument that the delivery of the foreclosed properties to AUB’s possession has rendered Goodland’s appeal moot. It explained that the Injunction Appeal involving the annulment of extrajudicial foreclosure sale can proceed independently of petitioners’ application for a writ of possession.[23] 

            The CA then concluded that Goodland was not guilty of forum shopping when it initiated the Annulment and Injunction Cases.  The CA held that the reliefs sought in the two cases were different.  The Annulment Case sought the nullification of the real estate mortgage, while the Injunction Case sought the nullification of the foreclosure proceedings as well as to enjoin the consolidation of title in favor of petitioners.[24]  The CA further held that aside from the difference in reliefs sought, the two cases were independent of each other because the facts or evidence that supported their respective causes of action were different.  The acts which gave rise to the Injunction Case (i.e., the extrajudicial foreclosure proceedings) occurred long after the filing of the Annulment Case.[25] 

            The appellate court also held that any decision in either case will not constitute res judicata on the other.  It explained that the validity of the real estate mortgage has no “automatic bearing” on the validity of the extrajudicial foreclosure proceedings.[26] 

            Moreover, according to the CA, the fact that Goodland stated in its Certification of Non-Forum Shopping in the Injunction Case that the Annulment Case was pending belied the existence of forum shopping.[27]

 

            Petitioners filed a Motion for Reconsideration[28] on July 2, 2009, which was denied in the assailed Resolution of February 17, 2010.[29]

            Hence, the instant petition.

Ruling in G.R. No. 190231 (Annulment Case)

 

            Contemporaneously with the proceedings of the Injunction Case, the earlier Annulment Case (Civil Case No. B-6242) was also dismissed by the trial court on the ground of forum shopping on August 16, 2007.[30] 

 

            Goodland filed an appeal[31] of the dismissal to the CA, which appeal was granted.  The CA ordered on August 11, 2009 the reinstatement of the Annulment Case in the trial court.[32]

            AUB then filed with this Court a Petition for Review,[33] docketed as G.R. No. 190231 and entitled Asia United Bank and Abraham Co v. Goodland Company, Inc. 

            On December 8, 2010, the Court’s First Division reversed the CA ruling and resolved the appeal in AUB’s favor.[34]  The sole issue resolved by the Court was whether Goodland committed willful and deliberate forum shopping by filing Civil Case Nos. B-6242 (Annulment Case) and B-7110 (Injunction Case).  The Court ruled that Goodland committed forum shopping because both cases asserted non-consent to the mortgage as the only basis for seeking the nullification of the REM, as well as the injunction of the foreclosure.  When Goodland did not notify the trial court of the subsequent filing of the injunction complaint, Goodland revealed its “furtive intent to conceal the filing of Civil Case No. B-7110 for the purpose of securing a favorable judgment.”  Thus, the Court concluded that the trial court was correct in dismissing the annulment case with prejudice. The dispositive portion of the said Resolution reads as follows:

                WHEREFORE, the petition is hereby GRANTED.  The August 11, 2009 decision and November 10, 2009 resolution of the Court of Appeals in CA-GR CV No. 9126[9] are REVERSED and SET ASIDE.  The August 16, 2007 and December 5, 2007 orders of the Regional Trial Court of Biñan, Laguna, Branch 25 in Civil Case No. B-6242 are REINSTATED.[35]

            Goodland filed a Motion for Reconsideration[36] but the same was denied with finality in the Court’s Resolution dated January 19, 2011.

Issue[37]

            The parties present several issues for the Court’s resolution.  Most of these address the procedural infirmities that attended Goodland’s appeal to the CA, making such appeal improper and dismissible.  The crux of the case, however, lies in the issue of whether the successive filing of the Annulment and Injunction Cases constitute forum shopping. 

Petitioners’ Arguments

 

            Petitioners maintain that Goodland is guilty of forum shopping because it sought in the Annulment Case to annul the REM on the ground that it was falsified and unlawfully filled-out; while in the Injunction Case, Goodland wanted to nullify the foreclosure sale arising from the same REM on the ground that the REM was falsified and unlawfully filled-out.  Clearly, Goodland’s complaints rise and fall on the issue of whether the REM is valid.  This requires the presentation of the same evidence in the Annulment and Injunction Cases.[38] 

Goodland’s Arguments

            Goodland counters that it did not commit forum shopping because the causes of action for the Injunction and Annulment Cases are different.  The Annulment Case is for the annulment of REM; while the Injunction Case is for the annulment of the extrajudicial foreclosure sale.  Goodland argues that any judgment in the Annulment Case, regardless of which party is successful, would not amount to res judicata in the Injunction Case.[39]

Our Ruling

 

            We grant the petition.

            There is forum shopping “when a party repetitively avails of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and the same essential facts and circumstances, and all raising substantially the same issues either pending in or already resolved adversely by some other court.”[40]  The different ways by which forum shopping may be committed were explained in Chua v. Metropolitan Bank & Trust Company:[41]

                Forum shopping can be committed in three ways:  (1) filing multiple cases based on the same cause of action and with the same prayer, the previous case not having been resolved yet (where the ground for dismissal is litis pendentia); (2) filing multiple cases based on the same cause of action and the same prayer, the previous case having been finally resolved (where the ground for dismissal is res judicata); and (3) filing multiple cases based on the same cause of action, but with different prayers (splitting causes of action, where the ground for dismissal is also either litis pendentia or res judicata).

Common in these types of forum shopping is the identity of the cause of action in the different cases filed.  Cause of action is defined as “the act or omission by which a party violates the right of another.”[42]          

            The cause of action in the earlier Annulment Case is the alleged nullity of the REM (due to its allegedly falsified or spurious nature) which is allegedly violative of Goodland’s right to the mortgaged property.  It serves as the basis for the prayer for the nullification of the REM.  The Injunction Case involves the same cause of action, inasmuch as it also invokes the nullity of the REM as the basis for the prayer for the nullification of the extrajudicial foreclosure and for injunction against consolidation of title.  While the main relief sought in the Annulment Case (nullification of the REM) is ostensibly different from the main relief sought in the Injunction Case (nullification of the extrajudicial foreclosure and injunction against consolidation of title), the cause of action which serves as the basis for the said reliefs remains the same — the alleged nullity of the REM.  Thus, what is involved here is the third way of committing forum shopping, i.e., filing multiple cases based on the same cause of action, but with different prayers.  As previously held by the Court, there is still forum shopping even if the reliefs prayed for in the two cases are different, so long as both cases raise substantially the same issues.[43]

            There can be no determination of the validity of the extrajudicial foreclosure and the propriety of injunction in the Injunction Case without necessarily ruling on the validity of the REM, which is already the subject of the Annulment Case.  The identity of the causes of action in the two cases entails that the validity of the mortgage will be ruled upon in both, and creates a possibility that the two rulings will conflict with each other.  This is precisely what is sought to be avoided by the rule against forum shopping. 

The substantial identity of the two cases remains even if the parties should add different grounds or legal theories for the nullity of the REM or should alter the designation or form of the action.  The well-entrenched rule is that “a party cannot, by varying the form of action, or adopting a different method of presenting his case, escape the operation of the principle that one and the same cause of action shall not be twice litigated.”[44]

            The CA ruled that the two cases are different because the events that gave rise to them are different.  The CA rationalized that the Annulment Case was brought about by the execution of a falsified document, while the Injunction Case arose from AUB’s foreclosure based on a falsified document.  The distinction is illusory.  The cause of action for both cases is the alleged nullity of the REM due to its falsified or spurious nature.  It is this nullity of the REM which Goodland sought to establish in the Annulment Case. It is also this nullity of the REM which Goodland asserted in the Injunction Case as basis for seeking to nullify the foreclosure and enjoin the consolidation of title.  Clearly, the trial court cannot decide the Injunction Case without ruling on the validity of the mortgage, which issue is already within the jurisdiction of the trial court in the Annulment Case. 

            The recent development in Asia United Bank v. Goodland Company, Inc.,[45] which involved substantially the same parties and the same issue is another reason for Goodland’s loss in the instant case.  The issue that Goodland committed deliberate forum shopping when it successively filed the Annulment and Injunction Cases against AUB and its officers was decided with finality therein.  This ruling is conclusive on the petitioners and Goodland considering that they are substantially the same parties in that earlier case.

            Given our ruling above that the Injunction Case ought to be dismissed for forum shopping, there is no need to rule further on the procedural infirmities raised by petitioners against Goodland’s appeal. 

            WHEREFORE, premises considered, the Petition is GRANTED.  The June 5, 2009 Decision of the Court of Appeals and its February 17, 2010 Resolution in CA-G.R. CV No. 90114 are hereby REVERSED and SET ASIDE.  The March 15, 2007 Order of Branch 25 of the Regional Trial Court of Biñan, Laguna DISMISSING Civil Case No. B-7110 is hereby REINSTATED and AFFIRMED. 

SO ORDERED.

                                     MARIANO C. DEL CASTILLO

             Associate Justice

WE CONCUR:

 

RENATO C. CORONA

Chief Justice

Chairperson

 

 

 

 

PRESBITERO J. VELASCO, JR.

Associate Justice

 TERESITA J. LEONARDO-DE CASTRO  

Associate Justice       

 

 

 

JOSE PORTUGAL PEREZ

Associate Justice

 

 

 

 

 

 

 

 

C E R T I F I C A T I O N

 

            Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s attestation, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

 

RENATO C. CORONA

Chief Justice

[1]       Rollo of G.R. No. 191388, pp. 44-95.  The prayer of the petition reads:

                WHEREFORE, petitioners respectfully pray that this Honorable Court REVERSE and SET ASIDE the assailed Decision dated 5 June 2009 and Resolution dated 17 February 2010 issued by the Court of Appeals in CA-G.R. CV No. 90114, and in lieu thereof, REINSTATE the Order dated 15 March 2007 of the Regional Trial Court of Biñan, Laguna, Branch 25, in Civil Case No. B-7110.

                Petitioners pray for such further or other reliefs as may be deemed just or equitable.  (Petition, p. 50; id. at 93).

[2]       Id. at 9-25; penned by Associate Justice Rebecca De Guia-Salvador and concurred in by Associate Justices Japar B. Dimaampao and Sixto C. Marella, Jr.

[3]       Id. at 27-32; penned by Associate Justice Rebecca De Guia-Salvador and concurred in by Associate Justices Japar B. Dimaampao and Normandie B. Pizzaro.

[4]       Id. at 24.

[5]       Id. at 516-520.

[6]       Id. at 521-525.

[7]       Id. at 518, 523.

[8]       Id. at 256-271.

[9]       Id. at 502-505. 

[10]     Id. at 282-306.

[11]     Id. at 599-602.

[12]     Id. at 603-606.

[13]     Id. at 370-431.

[14]     Id. at 916-917. The dispositive portion of the trial court’s Order states:

                WHEREFORE, finding the Motion to Dismiss filed by the defendants to be meritorious and well-taken, the same is hereby GRANTED.  Consequently, the above-entitled case is hereby ordered DISMISSED, with prejudice. 

                No costs.

                SO ORDERED.  (Id. at 917; penned by Acting  Presiding Judge Romeo C. De Leon.)

[15]     Id. at 9-25.

[16]     Id. at 958- 993.

[17]     Id. at 9-25.

[18]     RULES OF COURT, Rule 50, Section 2.  Dismissal of improper appeal to the Court of Appeals.  – An appeal under Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only questions of law shall be dismissed, issues purely of law not being reviewable by said court.  x x x

                An appeal erroneously taken to the Court of Appeals shall not be transferred to the appropriate court but shall be dismissed outright.

[19]     RULES OF COURT, Rule 41, Section 2.  Modes of Appeal. –

                (a)  Ordinary appeal. –  x x x

                (b)  Petition for review.  – x x x

                (c)  Appeal by certiorari.  – In all cases where only questions of law are raised or involved, the appeal shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45.

[20]     Rollo of G.R. No. 191388, pp. 15-16.

[21]     RULES OF COURT, Rule 50, Section 1.  Grounds for dismissal of appeal.  – An appeal may be dismissed by the Court of Appeals, on its own motion or on that of the appellee, on the following grounds:

                x x x x

                (e)  Failure of the appellant to serve and file the required number of copies of his brief or memorandum within the time provided by these Rules;

                (f)  Absence x x x of page references to the record as required in section 13, paragraphs (a), (c), (d) and (f) of Rule 44.

[22]     Rollo of G.R. No. 191388, p. 16.

[23]     Id. at 17.

[24]     Id. at 18-22.

[25]     Id. at 22.

[26]     Id. at 22-23.

[27]     Id. at 24.

[28]     Id. at 123-158.

[29]     Id. at 27-32.

[30]     Id. at 1069-1074; penned by Presiding Judge Teodoro N. Solis. 

[31]     Id. at 1078-1105.

[32]     Rollo of G.R. No. 190231, pp. 40-51; penned by Associate Justice Juan Q. Enriquez, Jr. and concurred in by Associate Justices Celia C. Librea-Leagogo and Antonio L. Villamor.

[33]     Id. at 3-38.

[34]     Id. at 584-592.

[35]     Id. at 591.

[36]     Id. at 593-611.

[37]     Rollo of G.R. No. 191388, p. 60.

[38]     Id. at 67-81.

[39]     Id. at 1486.

[40]     Chua v. Metropolitan Bank & Trust Company, G.R. No. 182311, August 19, 2009, 596 SCRA 524, 535.   

[41]     Id. at 535-536.

[42]     RULES OF COURT, Rule 2, Section 2.

[43]     See Prubankers Association v. Prudential Bank and Trust Company, 361 Phil. 744, 756 (1999).

[44]     Ramos v. Pangasinan Transportation Company, Inc., 169 Phil. 172, 179 (1977).

[45]     G.R. No. 190231, supra note 34.

Comment

LEGAL NOTE 0048: PRIMER ON COURT JURISDICTION AND FILING FEES

Filed under: LEGAL NOTES — Leave a comment
March 27, 2011

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).

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

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 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?

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