G.R. No.

75919 May 7, 1987

MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners,

vs.
COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, ANDREW
LUISON, GRACE LUISON and JOSE DE MAISIP, respondents.

A complaint for specific performance was filed by Manchester Development Corporation

against City Land Development Corporation to compel the latter to execute a deed of sale in
favor Manchester. Manchester also alleged that City Land forfeited the former’s tender of
payment for a certain transaction thereby causing damages to Manchester amounting to
P78,750,000.00. This amount was alleged in the BODY of their Complaint but it was not
reiterated in the PRAYER of same complaint. Manchester paid a docket fee of P410.00 only.
Said docket fee is premised on the allegation of Manchester that their action is primarily for
specific performance hence it is incapable of pecuniary estimation. The court ruled that there
is an under assessment of docket fees hence it ordered Manchester to amend its complaint.
Manchester complied but what it did was to lower the amount of claim for damages to P10M.
Said amount was however again not stated in the PRAYER.
ISSUE: Whether or not the amended complaint should be admitted.
HELD: No. The docket fee, its computation, should be based on the original complaint. A
case is deemed filed only upon payment of the appropriate docket fee regardless of the actual
date of filing in court. Here, since the proper docket fee was not paid for the original complaint,
it’s as if there is no complaint to speak of. As a consequence, there is no original complaint
duly filed which can be amended. So, any subsequent proceeding taken in consideration of
the amended complaint is void.
Manchester’s defense that this case is primarily an action for specific performance is not
merited. The Supreme Court ruled that based on the allegations and the prayer of the
complaint, this case is an action for damages and for specific performance. Hence, it is
capable of pecuniary estimation.
Further, the amount for damages in the original complaint was already provided in the body
of the complaint. Its omission in the PRAYER clearly constitutes an attempt to evade the
payment of the proper filing fees. To stop the happenstance of similar irregularities in the
future, the Supreme Court ruled that from this case on, all complaints, petitions, answers and
other similar pleadings should specify the amount of damages being prayed for not only in
the body of the pleading but also in the prayer, and said damages shall be considered in the
assessment of the filing fees in any case. Any pleading that fails to comply with this
requirement shall not bib accepted nor admitted, or shall otherwise be expunged from the
record.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 75919 May 7, 1987

MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners,

vs.
COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, ANDREW
LUISON, GRACE LUISON and JOSE DE MAISIP, respondents.

Tanjuatco, Oreta and Tanjuatco for petitioners.

Pecabar Law Offices for private respondents.

RESOLUTION

GANCAYCO, J.:

Acting on the motion for reconsideration of the resolution of the Second Division of January
28,1987 and another motion to refer the case to and to be heard in oral argument by the
Court En Banc filed by petitioners, the motion to refer the case to the Court en banc is granted
but the motion to set the case for oral argument is denied.

Petitioners in support of their contention that the filing fee must be assessed on the basis of the
amended complaint cite the case of Magaspi vs. Ramolete. 1 They contend that the Court of
Appeals erred in that the filing fee should be levied by considering the amount of damages
sought in the original complaint.

The environmental facts of said case differ from the present in that —

1. The Magaspi case was an action for recovery of ownership and possession of a parcel of land
with damages.2While the present case is an action for torts and damages and specific
performance with prayer for temporary restraining order, etc.3

2. In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of the
defendant to the property, the declaration of ownership and delivery of possession thereof to
plaintiffs but also asks for the payment of actual moral, exemplary damages and attorney's fees
arising therefrom in the amounts specified therein. 4However, in the present case, the prayer is
for the issuance of a writ of preliminary prohibitory injunction during the pendency of the action
against the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for
the property in question, to attach such property of defendants that maybe sufficient to satisfy
any judgment that maybe rendered, and after hearing, to order defendants to execute a
contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of
the money of plaintiff, ordering defendants jointly and severally to pay plaintiff actual,
compensatory and exemplary damages as well as 25% of said amounts as maybe proved during
the trial as attorney's fees and declaring the tender of payment of the purchase price of plaintiff
valid and producing the effect of payment and to make the injunction permanent. The amount
of damages sought is not specified in the prayer although the body of the complaint alleges the
total amount of over P78 Million as damages suffered by plaintiff.5

3. Upon the filing of the complaint there was an honest difference of opinion as to the nature of
the action in the Magaspi case. The complaint was considered as primarily an action for recovery
of ownership and possession of a parcel of land. The damages stated were treated as merely to
the main cause of action. Thus, the docket fee of only P60.00 and P10.00 for the sheriff's fee
were paid. 6

In the present case there can be no such honest difference of opinion. As maybe gleaned from
the allegations of the complaint as well as the designation thereof, it is both an action for
damages and specific performance. The docket fee paid upon filing of complaint in the amount
only of P410.00 by considering the action to be merely one for specific performance where the
amount involved is not capable of pecuniary estimation is obviously erroneous. Although the
total amount of damages sought is not stated in the prayer of the complaint yet it is spelled out
in the body of the complaint totalling in the amount of P78,750,000.00 which should be the basis
of assessment of the filing fee.

4. When this under-re assessment of the filing fee in this case was brought to the attention of
this Court together with similar other cases an investigation was immediately ordered by the
Court. Meanwhile plaintiff through another counsel with leave of court filed an amended
complaint on September 12, 1985 for the inclusion of Philips Wire and Cable Corporation as co-
plaintiff and by emanating any mention of the amount of damages in the body of the complaint.
The prayer in the original complaint was maintained. After this Court issued an order on October
15, 1985 ordering the re- assessment of the docket fee in the present case and other cases that
were investigated, on November 12, 1985 the trial court directed plaintiffs to rectify the
amended complaint by stating the amounts which they are asking for. It was only then that
plaintiffs specified the amount of damages in the body of the complaint in the reduced amount
of P10,000,000.00. 7 Still no amount of damages were specified in the prayer. Said amended
complaint was admitted.

On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay the amount
of P3,104.00 as filing fee covering the damages alleged in the original complaint as it did not
consider the damages to be merely an or incidental to the action for recovery of ownership and
possession of real property. 8 An amended complaint was filed by plaintiff with leave of court to
include the government of the Republic as defendant and reducing the amount of damages, and
attorney's fees prayed for to P100,000.00. Said amended complaint was also admitted. 9

In the Magaspi case, the action was considered not only one for recovery of ownership but also
for damages, so that the filing fee for the damages should be the basis of assessment. Although
the payment of the docketing fee of P60.00 was found to be insufficient, nevertheless, it was
held that since the payment was the result of an "honest difference of opinion as to the correct
amount to be paid as docket fee" the court "had acquired jurisdiction over the case and the
proceedings thereafter had were proper and regular." 10 Hence, as the amended complaint
superseded the original complaint, the allegations of damages in the amended complaint should
be the basis of the computation of the filing fee. 11

In the present case no such honest difference of opinion was possible as the allegations of the
complaint, the designation and the prayer show clearly that it is an action for damages and
specific performance. The docketing fee should be assessed by considering the amount of
damages as alleged in the original complaint.

As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon
payment of the docket fee regardless of the actual date of filing in court . 12 Thus, in the present
case the trial court did not acquire jurisdiction over the case by the payment of only P410.00 as
docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the
Court. 13 For an legal purposes there is no such original complaint that was duly filed which
could be amended. Consequently, the order admitting the amended complaint and all
subsequent proceedings and actions taken by the trial court are null and void.

The Court of Appeals therefore, aptly ruled in the present case that the basis of assessment of
the docket fee should be the amount of damages sought in the original complaint and not in the
amended complaint.

The Court cannot close this case without making the observation that it frowns at the practice of
counsel who filed the original complaint in this case of omitting any specification of the amount
of damages in the prayer although the amount of over P78 million is alleged in the body of the
complaint. This is clearly intended for no other purpose than to evade the payment of the
correct filing fees if not to mislead the docket clerk in the assessment of the filing fee. This
fraudulent practice was compounded when, even as this Court had taken cognizance of the
anomaly and ordered an investigation, petitioner through another counsel filed an amended
complaint, deleting all mention of the amount of damages being asked for in the body of the
complaint. It was only when in obedience to the order of this Court of October 18, 1985, the trial
court directed that the amount of damages be specified in the amended complaint, that
petitioners' counsel wrote the damages sought in the much reduced amount of P10,000,000.00
in the body of the complaint but not in the prayer thereof. The design to avoid payment of the
required docket fee is obvious.
The Court serves warning that it will take drastic action upon a repetition of this unethical
practice.

To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar
pleadings should specify the amount of damages being prayed for not only in the body of the
pleading but also in the prayer, and said damages shall be considered in the assessment of the
filing fees in any case. Any pleading that fails to comply with this requirement shall not bib
accepted nor admitted, or shall otherwise be expunged from the record.

The Court acquires jurisdiction over any case only upon the payment of the prescribed docket
fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the
Court, much less the payment of the docket fee based on the amounts sought in the amended
pleading. The ruling in the Magaspi case 14 in so far as it is inconsistent with this pronouncement
is overturned and reversed.

WHEREFORE, the motion for reconsideration is denied for lack of merit.

SO ORDERED.

Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
Bidin, Sarmiento and Cortes, JJ., concur.

Paras, J., took no part.

Sun Insurance v Asuncion Digest

G.R. Nos. 79937-38 February 13, 1989

Facts:
Petitioner Sun Insurance (or SIOL) files a complaint for the annulment of a decision on the
consignation of fire insurance policy. Subsequently, the Private Respondent (PR) files a complaint for
the refund of premiums and the issuance of a writ of preliminary attachment in a civil case against
SIOL. In addition, PR also claims for damages, attorney’s fees, litigation costs, etc., however, the
prayer did not state the amount of damages sought although from the body of the complaint it can be
inferred to be in amount of P 50 million. Hence, PR originally paid only PhP 210.00 in docket fees.The
complaint underwent a number of amendments to make way for subsequent re-assessments of the
amount of damages sought as well as the corresponding docket fees. The respondent demonstrated
his willingness to abide by the rules by paying the additional docket fees as required.

Issue: Did the Court acquire jurisdiction over the case even if private respondent did not pay
the correct or sufficient docket fees?

YES.
It was held that it is not simply the filing of the complaint or appropriate initiatory pleading, but the
payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter
or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of
the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond
the applicable prescriptive or reglamentary period. Same rule goes for permissive counterclaims, third
party claims and similar pleadings.

In herein case, obviously, there was the intent on the part of PR to defraud the government of the
docket fee due not only in the filing of the original complaint but also in the filing of the second amended
complaint. However, a more liberal interpretation of the rules is called for considering that, unlike
in Manchester, the private respondent demonstrated his willingness to abide by the rules by paying
the additional docket fees as required.

Where a trial court acquires jurisdiction in like manner, but subsequently, the judgment awards a claim
not specified in the pleading, or if specified the same has been left for determination by the court, the
additional filing fee shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of
Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. Nos. 79937-38 February 13, 1989

SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners,
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court, Quezon City
and MANUEL CHUA UY PO TIONG, respondents.

Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners. Tanjuatco,
Oreta, Tanjuatco, Berenguer & Sanvicente Law Offices for private respondent.

GANCAYCO, J.:

Again the Court is asked to resolve the issue of whether or not a court acquires jurisdiction over
a case when the correct and proper docket fee has not been paid.

On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint
with the Regional Trial Court of Makati, Metro Manila for the consignation of a premium refund
on a fire insurance policy with a prayer for the judicial declaration of its nullity against private
respondent Manuel Uy Po Tiong. Private respondent as declared in default for failure to file the
required answer within the reglementary period.

On the other hand, on March 28, 1984, private respondent filed a complaint in the Regional Trial
Court of Quezon City for the refund of premiums and the issuance of a writ of preliminary
attachment which was docketed as Civil Case No. Q-41177, initially against petitioner SIOL, and
thereafter including E.B. Philipps and D.J. Warby as additional defendants. The complaint sought,
among others, the payment of actual, compensatory, moral, exemplary and liquidated damages,
attorney's fees, expenses of litigation and costs of the suit. Although the prayer in the complaint
did not quantify the amount of damages sought said amount may be inferred from the body of
the complaint to be about Fifty Million Pesos (P50,000,000.00).

Only the amount of P210.00 was paid by private respondent as docket fee which prompted
petitioners' counsel to raise his objection. Said objection was disregarded by respondent Judge
Jose P. Castro who was then presiding over said case. Upon the order of this Court, the records
of said case together with twenty-two other cases assigned to different branches of the Regional
Trial Court of Quezon City which were under investigation for under-assessment of docket fees
were transmitted to this Court. The Court thereafter returned the said records to the trial court
with the directive that they be re-raffled to the other judges in Quezon City, to the exclusion of
Judge Castro. Civil Case No. Q-41177 was re-raffled to Branch 104, a sala which was then vacant.

On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No. 85-10-
8752-RTC directing the judges in said cases to reassess the docket fees and that in case of
deficiency, to order its payment. The Resolution also requires all clerks of court to issue
certificates of re-assessment of docket fees. All litigants were likewise required to specify in their
pleadings the amount sought to be recovered in their complaints.

On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was
temporarily assigned, issuedan order to the Clerk of Court instructing him to issue a certificate of
assessment of the docket fee paid by private respondent and, in case of deficiency, to include
the same in said certificate.

On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On

August 30,1984, an amended complaint was filed by private respondent including the two
additional defendants aforestated.

Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his
assumption into office on January 16, 1986, issued a Supplemental Order requiring the parties in
the case to comment on the Clerk of Court's letter-report signifying her difficulty in complying
with the Resolution of this Court of October 15, 1985 since the pleadings filed by private
respondent did not indicate the exact amount sought to be recovered. On January 23, 1986,
private respondent filed a "Compliance" and a "Re-Amended Complaint" stating therein a claim
of "not less than Pl0,000,000. 00 as actual compensatory damages" in the prayer. In the body of
the said second amended complaint however, private respondent alleges actual and
compensatory damages and attorney's fees in the total amount of about P44,601,623.70.

On January 24, 1986, Judge Asuncion issued another Order admitting the second amended
complaint and stating therein that the same constituted proper compliance with the Resolution
of this Court and that a copy thereof should be furnished the Clerk of Court for the reassessment
of the docket fees. The reassessment by the Clerk of Court based on private respondent's claim
of "not less than P10,000,000.00 as actual and compensatory damages" amounted to
P39,786.00 as docket fee. This was subsequently paid by private respondent.

Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said
order of Judie Asuncion dated January 24, 1986.

On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim
of P20,000,000.00 as d.qmages so the total claim amounts to about P64,601,623.70. On October
16, 1986, or some seven months after filing the supplemental complaint, the private respondent
paid the additional docket fee of P80,396.00.1

On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows:

WHEREFORE, judgment is hereby rendered:

1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks
annulment of the order

(a) denying petitioners' motion to dismiss the complaint, as amended, and

(b) granting the writ of preliminary attachment, but giving due course to the portion thereof
questioning the reassessment of the docketing fee, and requiring the Honorable respondent
Court to reassess the docketing fee to be paid by private respondent on the basis of the amount
of P25,401,707.00. 2

Hence, the instant petition.

During the pendency of this petition and in conformity with the said judgment of respondent
court, private respondent paid the additional docket fee of P62,432.90 on April 28, 1988. 3

The main thrust of the petition is that the Court of Appeals erred in not finding that the lower
court did not acquire jurisdiction over Civil Case No. Q-41177 on the ground of nonpayment of
the correct and proper docket fee. Petitioners allege that while it may be true that private
respondent had paid the amount of P182,824.90 as docket fee as herein-above related, and
considering that the total amount sought to be recovered in the amended and supplemental
complaint is P64,601,623.70 the docket fee that should be paid by private respondent is
P257,810.49, more or less. Not having paid the same, petitioners contend that the complaint
should be dismissed and all incidents arising therefrom should be annulled. In support of their
theory, petitioners cite the latest ruling of the Court in Manchester Development Corporation vs.
CA, 4 as follows:

The Court acquires jurisdiction over any case only upon the payment of the prescribed docket
fee. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the
Court, much less the payment of the docket fee based on the amounts sought in the amended
pleading. The ruling in the Magaspi Case in so far as it is inconsistent with this pronouncement is
overturned and reversed.

On the other hand, private respondent claims that the ruling in Manchester cannot apply
retroactively to Civil Case No. Q41177 for at the time said civil case was filed in court there was
no such Manchester ruling as yet. Further, private respondent avers that what is applicable is the
ruling of this Court in Magaspi v. Ramolete, 5 wherein this Court held that the trial court
acquired jurisdiction over the case even if the docket fee paid was insufficient.

The contention that Manchester cannot apply retroactively to this case is untenable. Statutes
regulating the procedure of the courts will be construed as applicable to actions pending and
undetermined at the time of their passage. Procedural laws are retrospective in that sense and
to that extent. 6

In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the full amount of the
docket fee is an indispensable step for the perfection of an appeal. In a forcible entry and
detainer case before the justice of the peace court of Manaoag, Pangasinan, after notice of a
judgment dismissing the case, the plaintiff filed a notice of appeal with said court but he
deposited only P8.00 for the docket fee, instead of P16.00 as required, within the reglementary
period of appeal of five (5) days after receiving notice of judgment. Plaintiff deposited the
additional P8.00 to complete the amount of the docket fee only fourteen (14) days later. On the
basis of these facts, this court held that the Court of First Instance did notacquire jurisdiction to
hear and determine the appeal as the appeal was not thereby perfected.

In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to become a Filipino
citizen by sending it through registered mail to the Office of the Solicitor General in 1953 but the
required filing fee was paid only in 1956, barely 5V2 months prior to the filing of the petition for
citizenship. This Court ruled that the declaration was not filed in accordance with the legal
requirement that such declaration should be filed at least one year before the filing of the
petition for citizenship. Citing Lazaro, this Court concluded that the filing of petitioner's
declaration of intention on October 23, 1953 produced no legal effect until the required filing fee
was paid on May 23, 1956.

In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee were applied. It was
an original petition for quo warranto contesting the right to office of proclaimed candidates
which was mailed, addressed to the clerk of the Court of First Instance, within the one-week
period after the proclamation as provided therefor by law.10 However, the required docket fees
were paid only after the expiration of said period. Consequently, this Court held that the date of
such payment must be deemed to be the real date of filing of aforesaid petition and not the date
when it was mailed.

Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket fee must be paid
before a court will act on a petition or complaint. However, we also held that said rule is not
applicable when petitioner seeks the probate of several wills of the same decedent as he is not
required to file a separate action for each will but instead he may have other wills probated in
the same special proceeding then pending before the same court.
Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a case is deemed
filed only upon payment of the docket fee regardless of the actual date of its filing in court. Said
case involved a complaint for recovery of ownership and possession of a parcel of land with
damages filed in the Court of First Instance of Cebu. Upon the payment of P60.00 for the docket
fee and P10.00 for the sheriffs fee, the complaint was docketed as Civil Case No. R-11882. The
prayer of the complaint sought that the Transfer Certificate of Title issued in the name of the
defendant be declared as null and void. It was also prayed that plaintiff be declared as owner
thereof to whom the proper title should be issued, and that defendant be made to pay monthly
rentals of P3,500.00 from June 2, 1948 up to the time the property is delivered to plaintiff,
P500,000.00 as moral damages, attorney's fees in the amount of P250,000.00, the costs of the
action and exemplary damages in the amount of P500,000.00.

The defendant then filed a motion to compel the plaintiff to pay the correct amount of the
docket fee to which an opposition was filed by the plaintiff alleging that the action was for the
recovery of a parcel of land so the docket fee must be based on its assessed value and that the
amount of P60.00 was the correct docketing fee. The trial court ordered the plaintiff to pay
P3,104.00 as filing fee.

The plaintiff then filed a motion to admit the amended complaint to include the Republic as the
defendant. In the prayer of the amended complaint the exemplary damages earlier sought was
eliminated. The amended prayer merely sought moral damages as the court may determine,
attorney's fees of P100,000.00 and the costs of the action. The defendant filed an opposition to
the amended complaint. The opposition notwithstanding, the amended complaint was admitted
by the trial court. The trial court reiterated its order for the payment of the additional docket fee
which plaintiff assailed and then challenged before this Court. Plaintiff alleged that he paid the
total docket fee in the amount of P60.00 and that if he has to pay the additional fee it must be
based on the amended complaint.

The question posed, therefore, was whether or not the plaintiff may be considered to have filed
the case even if the docketing fee paid was not sufficient. In Magaspi, We reiterated the rule that
the case was deemed filed only upon the payment of the correct amount for the docket fee
regardless of the actual date of the filing of the complaint; that there was an honest difference
of opinion as to the correct amount to be paid as docket fee in that as the action appears to be
one for the recovery of property the docket fee of P60.00 was correct; and that as the action is
also one, for damages, We upheld the assessment of the additional docket fee based on the
damages alleged in the amended complaint as against the assessment of the trial court which
was based on the damages alleged in the original complaint.
However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an
action for torts and damages and specific performance with a prayer for the issuance of a
temporary restraining order, etc. The prayer in said case is for the issuance of a writ of
preliminary prohibitory injunction during the pendency of the action against the defendants'
announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property in question,
the attachment of such property of defendants that may be sufficient to satisfy any judgment
that may be rendered, and, after hearing, the issuance of an order requiring defendants to
execute a contract of purchase and sale of the subject property and annul defendants' illegal
forfeiture of the money of plaintiff. It was also prayed that the defendants be made to pay the
plaintiff jointly and severally, actual, compensatory and exemplary damages as well as 25% of
said amounts as may be proved during the trial for attorney's fees. The plaintiff also asked the
trial court to declare the tender of payment of the purchase price of plaintiff valid and sufficient
for purposes of payment, and to make the injunction permanent. The amount of damages
sought is not specified in the prayer although the body of the complaint alleges the total amount
of over P78 Millon allegedly suffered by plaintiff.

Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee
based on the nature of the action for specific performance where the amount involved is not
capable of pecuniary estimation. However, it was obvious from the allegations of the complaint
as well as its designation that the action was one for damages and specific performance. Thus,
this court held the plaintiff must be assessed the correct docket fee computed against the
amount of damages of about P78 Million, although the same was not spelled out in the prayer of
the complaint.

Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint
on September 12, 1985 by the inclusion of another co-plaintiff and eliminating any mention of
the amount of damages in the body of the complaint. The prayer in the original complaint was
maintained.

On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case
and other cases that were investigated. On November 12, 1985, the trial court directed the
plaintiff to rectify the amended complaint by stating the amounts which they were asking for.
This plaintiff did as instructed. In the body of the complaint the amount of damages alleged was
reduced to P10,000,000.00 but still no amount of damages was specified in the prayer. Said
amended complaint was admitted.
Applying the principle in Magaspi that "the case is deemed filed only upon payment of the
docket fee regardless of the actual date of filing in court," this Court held that the trial court did
not acquire jurisdiction over the case by payment of only P410.00 for the docket fee. Neither can
the amendment of the complaint thereby vest jurisdiction upon the Court. For all legal purposes
there was no such original complaint duly filed which could be amended. Consequently, the
order admitting the amended complaint and all subsequent proceedings and actions taken by
the trial court were declared null and void.13

The present case, as above discussed, is among the several cases of under-assessment of docket
fee which were investigated by this Court together with Manchester. The facts and
circumstances of this case are similar to Manchester. In the body of the original complaint, the
total amount of damages sought amounted to about P50 Million. In the prayer, the amount of
damages asked for was not stated. The action was for the refund of the premium and the
issuance of the writ of preliminary attachment with damages. The amount of only P210.00 was
paid for the docket fee. On January 23, 1986, private respondent filed an amended complaint
wherein in the prayer it is asked that he be awarded no less than P10,000,000.00 as actual and
exemplary damages but in the body of the complaint the amount of his pecuniary claim is
approximately P44,601,623.70. Said amended complaint was admitted and the private
respondent was reassessed the additional docket fee of P39,786.00 based on his prayer of not
less than P10,000,000.00 in damages, which he paid.

On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim
of P20,000,000.00 in damages so that his total claim is approximately P64,601,620.70. On
October 16, 1986, private respondent paid an additional docket fee of P80,396.00. After the
promulgation of the decision of the respondent court on August 31, 1987 wherein private
respondent was ordered to be reassessed for additional docket fee, and during the pendency of
this petition, and after the promulgation of Manchester, on April 28, 1988, private respondent
paid an additional docket fee of P62,132.92. Although private respondent appears to have paid a
total amount of P182,824.90 for the docket fee considering the total amount of his claim in the
amended and supplemental complaint amounting to about P64,601,620.70, petitioner insists
that private respondent must pay a docket fee of P257,810.49.

The principle in Manchester could very well be applied in the present case. The pattern and the
intent to defraud the government of the docket fee due it is obvious not only in the filing of the
original complaint but also in the filing of the second amended complaint.
However, in Manchester, petitioner did not pay any additional docket fee until] the case was
decided by this Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the
government, this Court held that the court a quo did not acquire jurisdiction over the case and
that the amended complaint could not have been admitted inasmuch as the original complaint
was null and void.

In the present case, a more liberal interpretation of the rules is called for considering that, unlike
Manchester, private respondent demonstrated his willingness to abide by the rules by paying the
additional docket fees as required. The promulgation of the decision in Manchester must have
had that sobering influence on private respondent who thus paid the additional docket fee as
ordered by the respondent court. It triggered his change of stance by manifesting his willingness
to pay such additional docket fee as may be ordered.

Nevertheless, petitioners contend that the docket fee that was paid is still insufficient
considering the total amount of the claim. This is a matter which the clerk of court of the lower
court and/or his duly authorized docket clerk or clerk in-charge should determine and,
thereafter, if any amount is found due, he must require the private respondent to pay the same.

Thus, the Court rules as follows:

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.

WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is
hereby instructed to reassess and determine the additional filing fee that should be paid by
private respondent considering the total amount of the claim sought in the original complaint
and the supplemental complaint as may be gleaned from the allegations and the prayer thereof
and to require private respondent to pay the deficiency, if any, without pronouncement as to
costs.

SO ORDERED
Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. Nos. 159669 & 163521 March 12, 2007

UNITED OVERSEAS BANK PHILS. (formerly WESTMONT BANK), Petitioner,

vs.
ROSEMOORE MINING & DEVELOPMENT CORP. and DRA. LOURDES PASCUAL, Respondents.

DECISION

TINGA, J.:

We resolve these two consolidated cases, which though with distinct courts of origin, pertain to
issues stemming from the same loan transaction.

The antecedent facts follow.

Respondent Rosemoor Mining and Development Corporation (Rosemoor), a Philippine mining

corporation with offices at Quezon City, applied for and was granted by petitioner Westmont
Bank1 (Bank) a credit facility in the total amount of ₱80 million consisting of ₱50,000,000.00 as
long term loan and ₱30,000,000.00 as revolving credit line.2

To secure the credit facility, a lone real estate mortgage agreement was executed by Rosemoor
and Dr. Lourdes Pascual (Dr. Pascual), Rosemoor’s president, as mortgagors in favor of the Bank
as mortgagee in the City of Manila.3 The agreement, however, covered six (6) parcels of land
located in San Miguel, Bulacan4 (Bulacan properties), all registered under the name of
Rosemoor,5 and two (2) parcels of land6 situated in Gapan, Nueva Ecija (Nueva Ecija properties),
owned and registered under the name of Dr. Pascual.7

Rosemoor subsequently opened with the Bank four (4) irrevocable Letters of Credit (LCs) totaling
US$1,943,508.11.8 To cover payments by the Bank under the LCs, Rosemoor proceeded to draw
against its credit facility and thereafter executed promissory notes amounting collectively to
₱49,862,682.50.9 Two (2) other promissory notes were also executed by Rosemoor in the
amounts of ₱10,000,000.00 and ₱3,500,000.00, respectively, to be drawn from its revolving
credit line.10

Rosemoor defaulted in the payment of its various drawings under the LCs and promissory notes.
In view of the default, the Bank caused the extra-judicial foreclosure of the Nueva Ecija
properties on 22 May 1998 and the Bulacan properties on 10 August 1998. The Bank was the
highest bidder on both occasions.11

On 8 October 1999, the Bank caused the annotation of the Notarial Certificate of Sale covering
the Nueva Ecija properties on the certificates of title concerned. Later, on 16 March 2001, the
Notarial Certificate of Sale covering the Bulacan properties was annotated on the certificates of
title of said properties.12

The foregoing facts led to Rosemoor’s filing of separate complaints against the Bank, one before
the Regional Trial Court of Manila (Manila RTC) and the other before the Regional Trial Court of
Malolos, Bulacan (Malolos RTC).

The Manila Case (G.R. No. 163521)

On 5 August 1998, Rosemoor and Dr. Pascual filed a Complaint, originally captioned as one for
"Damages, Accounting and Release of Balance of Loan and Machinery and for Injunction" before
the Manila RTC.13 Impleaded as defendants were the Bank and Notary Public Jose Sineneng,
whose office was used to foreclose the mortgage.14 The complaint was twice amended, the
caption eventually reflecting an action for "Accounting, Specific Performance and Damages."15
Through the amendments, Pascual was dropped as a plaintiff while several officers of the Bank
were included as defendants.16
The Bank moved for the dismissal of the original and amended complaints on the ground that
the venue had been improperly laid.17 The motion was denied by the trial court through an
Omnibus Resolution dated 24 January 2000.18

Rosemoor’s prayer in the Second Amended Complaint, which was filed in November of 1999,
reads as follows:

WHEREFORE, plaintiff Rosemoor Mining & Development Corporation respectfully prays that,
after trial of the issues, this court promulgate judgment –

1. Directing Westmont to render an accounting of the loan account of Rosemoor under the Long
Term Loan Facility and the Revolving Credit Line at least up to the dates of foreclosure of
Rosemoor’s mortgaged properties on May 22, 1998 and August 18, 1998, showing among others
(a) the sums of money paid by Rosemoor or otherwise debited from its deposit account in
payment of the loans it had obtained from Westmont to cover the cost of the machinery to be
imported under the Unpaid LCs and under LC No. 97-058 for the tiling plant, as well as for
working capital, and (b) all interests, penalties and charges imposed on the loans pertaining to
the Unpaid LCs and LC No. 97-058 and for which Westmont had foreclosed Rosemoor’s and Dra.
Pascual’s real estate mortgage; (c) the amount of import and customs duties, demurrage,
storage and other fees which Rosemoor had paid or which was otherwise debited from
Rosemoor’s deposit account, in connection with the importation of the tiling plant and as a
consequence of the non-release thereof by Westmont;

2. Ordering all the defendants jointly and severally to pay to Rosemoor, by way of actual
damages, the dollar equivalent of the amounts in (1) (a), (b) and (c) at the exchange rate
prevailing at the time of the opening of the LCs;

3. Ordering defendants jointly and severally to pay to Rosemoor actual damages for operational
losses suffered by Rosemoor due to its failure to use the tiling plaint which Westmont had
refused to release to Rosemoor, in such amount as may be proven at the trial;

4. Directing the defendants jointly and severally to pay, by way of correction for the public good,
exemplary damages in the amount of ₱ 500,000.00 each;
5. Ordering defendants jointly and severally to indemnify Rosemoor in the sum of ₱350,000.00,
representing attorney’s fees and litigation expenses incurred by Rosemoor for the protection
and enforcement of its rights and interests.

Plaintiff prays for further and other relief as may be just and equitable under the circumstances.
19

On 15 August 2002, the Bank filed another motion to dismiss the Second Amended Complaint on
the ground of forum-shopping since, according to it, Rosemoor had filed another petition earlier
on 11 March 2002 before the Malolos RTC.20 The Bank contended that as between the action
before the Manila RTC and the petition before the Malolos RTC, there is identity of parties, rights
asserted, and reliefs prayed for, the relief being founded on the same set of facts. The Bank
further claimed that any judgment that may be rendered in either case will amount to res
judicata in the other case.21 Still, the

Manila RTC denied the motion to dismiss.22 It also denied the

Bank’s motion for reconsideration of the order of denial.23

The Bank challenged the Manila RTC’s denial of the Bank’s second motion to dismiss before the
Court of Appeals, through a petition for certiorari. The appellate court dismissed the petition in a
Decision dated 26 February 2004.24 The Bank filed a motion for reconsideration which,
however, was denied through a Resolution dated 30 April 2004.25

In the Petition for Review on Certiorari in G.R. No. 163521, the Bank argues that the Court of
Appeals erred in holding that no forum-shopping attended the actions brought by Rosemoor.26

The Malolos Case (G.R. No. 159669)

After the complaint with the Manila RTC had been lodged, on 11 March 2002, Rosemoor and Dr.
Pascual filed another action against the Bank, this time before the Malolos RTC. Impleaded
together with the Bank as respondent was the Register of Deeds for the Province of Bulacan in
the Petition for Injunction with Damages,

with Urgent Prayer for Temporary Restraining Order and/or Preliminary Injunction.27

In the Malolos case, Rosemoor and Dr. Pascual alleged that the redemption period for the
Bulacan properties would expire on 16 March 2002. They claimed that the threatened
consolidation of titles by the Bank is illegal, stressing that the foreclosure of the real estate
mortgage by the Bank was fraudulent and without basis,28 as the Bank had made them sign two
blank forms of Real Estate Mortgage and several promissory notes also in blank forms. It
appeared later, according to Rosemoor and Dr. Pascual, that the two Real Estate Mortgage blank
forms were made as security for two loans, one for ₱80 million and the other for ₱48 million,
when the total approved loan was only for ₱80 million. The Bank later released only the amount
of ₱10 million out of the ₱30 million revolving credit line, to the prejudice of Rosemoor, they
added.29

The Petition’s prayer reads as follows:

WHEREFORE, premises considered, it is most respectfully prayed that this Honorable Court –

1. Issue ex-parte a temporary restraining order before the matter could be heard on notice to
restrain and enjoin respondent BANK from proceeding with its threatened consolidation of its
titles over the subject properties of petitioner Rosemoor in San Miguel, Bulacan covered by TCT
Nos. 42132; 42133; 42134; 42135; 42136 and RT 34569 (T-222448) on March 16, 2002 or at any
time thereafter; that the respondent Register of Deeds for the Province of Bulacan be enjoined
and restrained from registering any document(s) submitted and/or to be submitted by
respondent BANK consolidating its titles over the above-named properties of petitioner
Rosemoor in San Miguel, Bulacan; and likewise, that the Register of Deeds for the province of
Bulacan be restrained and enjoined from canceling the titles of Rosemoor over its properties,
namely, TCT Nos. 42132; 42133; 42134; 42135; 42136 and RT 34569 (T-222448);

2. That after due notice, a writ of preliminary injunction be issued upon the posting of a bond in
such amount as may be fixed by this Court;
3. That after due hearing and trial, judgment be rendered in favor of petitioners and against
respondent BANK –

a. Permanently enjoining respondent BANK from proceeding with the consolidation of its titles to
the subject properties of Rosemoor covered by TCT Nos. 42132; 42133; 42134; 42135; 42136
and RT 34569 (T-222448); and permanently restraining respondent Register of Deeds for the
Province of Bulacan from registering any document(s) submitted and/or to be submitted by
respondent BANK consolidating its titles over the above-named properties of petitioner
Rosemoor in San Miguel, Bulacan; and likewise, that the Register of Deeds for the province of
Bulacan be restrained and enjoined from cancelling the titles of Rosemoor over its properties,
namely, TCT Nos. 42132; 42133; 42134; 42135; 42136 and RT 34569 (T-222448);

b. Declaring the foreclosures of Real Estate Mortgages on the properties of petitioners

Rosemoor and Dra. Pascual to be null and void;

c. Recognizing the ownership in fee simple of the petitioners over their properties above-
mentioned;

d. Awarding to petitioners the damages prayed for, including attorney’s fees and costs and
expenses of litigation.

Petitioners pray for such other reliefs and remedies as may be deemed just and equitable in the
premises.30

As it did before the Manila RTC, the Bank filed a motion to dismiss on 26 March 2002 on the
ground that Rosemoor had engaged in forum-shopping, adverting to the pending Manila case.31
The Bank further alleged that Dr. Pascual has no cause of action since the properties registered
in her name are located in Nueva Ecija. The Malolos RTC denied the motion to dismiss in an
Order dated 13 May 2002.32 In the same Order, the Malolos RTC directed the Bank to file its
answer to the petition within five (5) days from notice.33

Despite receipt of the Order on 21 May 2002, the Bank opted not to file its answer as it filed
instead a motion for reconsideration on 5 June 2002.34 Meanwhile, Rosemoor and Dr. Pascual
moved to declare the Bank in default for its failure to timely file its answer.35 On 10 September
2002, the Malolos RTC issued an order denying the Bank’s motion for reconsideration for lack of
merit and at the same time declaring the Bank in default for failure to file its answer.36

Hence, the Bank filed a second petition for certiorari before the Court of Appeals, where it
assailed the Orders dated 13 May 2002 and 10 September 2002 of the Malolos RTC. During the
pendency of this petition for certiorari, the Malolos RTC decided the Malolos case on the merits
in favor of Rosemoor.37 The decision in the Malolos case was also appealed to the Court of
Appeals.38 Based on these developments, the appellate court considered the prayer for
preliminary injunction as moot and academic and proceeded with the resolution of the petition,
by then docketed as CA-G.R. SP No.73358, on the merits. The appellate court dismissed the
petition in a Decision dated 20 June 2003.39 Undaunted, the Bank filed the petition in G.R. No.
159669 before this Court.

The two petitions before this Court have been consolidated. We find one common issue in G.R.
No. 159669 and G.R. No. 163521 – whether Rosemoor committed forum-shopping in filing the
two cases against the Bank. The other issues for resolution were raised in G.R. No. 159669,
pertaining as they do to the orders issued by the Malolos RTC. These issues are whether the
action to invalidate the foreclosure sale was properly laid with the Malolos RTC even as regards
the Nueva Ecija properties; whether it was proper for the Malolos RTC to declare the Bank in
default; and whether it was proper for the Malolos RTC to deny the Bank’s motion to dismiss
through a minute resolution.40

Forum-Shopping

The central issue in these consolidated cases is whether Rosemoor committed forum-shopping
in filing the Malolos case during the pendency of the Manila case.

The essence of forum-shopping is the filing of multiple suits involving the same parties for the
same cause of action, either simultaneously or successively, for the purpose of obtaining a
favorable judgment.41 The elements of forum-shopping are: (a) identity of parties, or at least
such parties as represent the same interests in both actions; (b) identity of rights asserted and
reliefs prayed for, the reliefs being founded on the same facts; and (c) the identity with respect
to the two preceding particulars in the two cases is such that any judgment rendered in the
pending cases, regardless of which party is successful, amount to res judicata in the other
case.42
As to the existence of identity of parties, several bank officers and employees impleaded in the
Amended Complaint in the Manila case were not included in the Malolos case. These bank
officers and employees were sued in Manila in their personal capacity. A finding of negligence or
bad faith in their participation in the preparation and execution of the loan agreement would
render them personally liable. Dr. Pascual, on the other hand, was included as petitioner only in
the Malolos case because it involved properties registered in her name. As correctly pointed out
by the Court of Appeals, Dr. Pascual is a real party-in-interest in the Malolos case because she
stood to benefit or suffer from the judgment in the suit. Dr. Pascual, however, was not included
as plaintiff in the Manila case because her interest therein was not personal but merely in her
capacity as officer of Rosemoor.

As regards the identity of rights asserted and reliefs prayed for, the main contention of
Rosemoor in the Manila case is that the Bank had failed to deliver the full amount of the loan, as
a consequence of which Rosemoor demanded the remittance of the unreleased portion of the
loan and payment of damages consequent thereto.43 In contrast, the Malolos case was filed for
the purpose of restraining the Bank from proceeding with the consolidation of the titles over the
foreclosed Bulacan properties because the loan secured by the mortgage had not yet become
due and demandable.44 While the right asserted in the Manila case is to receive the proceeds of
the loan, the right sought in the Malolos case is to restrain the foreclosure of the properties
mortgaged to secure a loan that was not yet due.

Moreover, the Malolos case is an action to annul the foreclosure sale that is necessarily an action
affecting the title of the property sold.45 It is therefore a real action which should be
commenced and

tried in the province where the property or part thereof lies.46 The Manila case, on the other
hand, is a personal action47 involving as it does the enforcement of a contract between
Rosemoor, whose office is in Quezon City, and the Bank, whose principal office is in Binondo,
Manila.48 Personal actions may be commenced and tried where the plaintiff or any of the
principal plaintiffs resides, or where the defendants or any of the principal defendants resides, at
the election of the plaintiff.49

It was subsequent to the filing of the Manila case that Rosemoor and Dr. Pascual saw the need to
secure a writ of injunction because the consolidation of the titles to the mortgaged properties in
favor of the Bank was in the offing. But then, this action can only be commenced where the
properties, or a portion thereof, is located. Otherwise, the petition for injunction would be
dismissed for improper venue. Rosemoor, therefore, was warranted in filing the Malolos case
and cannot in turn be accused of forum-shopping.

Clearly, with the foregoing premises, it cannot be said that respondents committed forum-
shopping.

Action to nullify foreclosure sale of mortgaged properties in Bulacan and Nueva Ecija before the
Malolos RTC

The Bank challenges the Malolos RTC’s jurisdiction over the action to nullify the foreclosure sale
of the Nueva Ecija properties along with the Bulacan properties. This question is actually a
question of venue and not of jurisdiction,50 which if improperly laid, could lead to the dismissal
of the case.51

The rule on venue of real actions is provided in Section 1, Rule 4 of the 1997 Rules of Civil
Procedure, which reads in part:

Section 1. Venue of Real Actions. Actions affecting title to or possession of real property, or
interest therein, shall be commenced and tried in the proper court which has jurisdiction over
the area wherein the real property involved, or a portion thereof, is situated.

xxx

The venue of the action for the nullification of the foreclosure sale is properly laid with the
Malolos RTC although two of the properties together with the Bulacan properties are situated in
Nueva Ecija. Following the above-quoted provision of the Rules of Court, the venue of real
actions affecting properties found in different provinces

is determined by the singularity or plurality of the transactions involving said parcels of land.
Where said parcels are the object of one and the same transaction, the venue is in the court of
any of the provinces wherein a parcel of land is situated.52
Ironically, the Bank itself correctly summarized the applicable jurisprudential rule in one of the
pleadings before the Court.53 Yet the Bank itself has provided the noose on which it would be
hung. Resorting to deliberate misrepresentation, the Bank stated in the same pleading that "the
Bulacan and Nueva Ecija [p]roperties were not the subject of one single real estate mortgage
contract."54

In the present case, there is only one proceeding sought to be nullified and that is the extra-
judicial mortgage foreclosure sale. And there is only one initial transaction which served as the
basis of the foreclosure sale and that is the mortgage contract. Indeed, Rosemoor, through Dr.
Pascual, executed a lone mortgage contract where it undertook to "mortgage the land/real
property situated in Bulacan and Nueva Ecija," with the list of mortgaged properties annexed
thereto revealing six (6) properties in Bulacan and two (2) properties in Nueva Ecija subject of
the mortgage.

This apparent deliberate misrepresentation cannot simply pass without action. The real estate
mortgage form supplied to Rosemoor is the Bank’s standard pre-printed form. Yet the Bank
perpetrated the misrepresentation. Blame must be placed on its doorstep. But as the Bank’s
pleading was obviously prepared by its counsel, the latter should also share the blame. A lawyer
shall not do any falsehood, nor consent to the doing of any in court; nor shall he mislead, or
allow the Court to be misled by any artifice.55 Both the Bank’s president and counsel should be
made to explain why they should not be sanctioned for contempt of court.

Propriety of Default Order

The Court of Appeals did not touch upon the soundness or unsoundness of the order of default
although it is one of the orders assailed by the Bank. However, the silence of the appellate court
on the issue does not improve the legal situation of the Bank.

To recall, the Bank filed a motion to dismiss the Malolos case. The Malolos RTC denied the
motion in an Order dated 13 May 2002.56 In the same Order, the Malolos RTC directed the Bank
to file
its answer to the petition within five (5) days from the receipt of the Order.57 The Bank received
a copy of the Order on 21 May 2002. Instead of filing an answer, the Bank filed a motion for
reconsideration but only on 5 June 2002.58

The motion for reconsideration59 could not have tolled the running of the period to answer for
two reasons. One, it was filed late, nine (9) days after the due date of the answer. Two, it was a
mere rehash of the motion to dismiss; hence, pro forma in nature. Thus, the Malolos RTC did not
err in declaring the Bank in default.

Deviation from the Prescribed Content of an Order Denying a Motion to Dismiss

Finally, the Bank questions the Malolos RTC’s Order dated 13 May 2002 denying its motion to
dismiss on the ground that it is contrary to law and jurisprudence because it had failed to apprise
the Bank of the legal basis for the denial.

The Bank adverts to the content requirement of an order denying a motion to dismiss prescribed
by Sec. 3, Rule 16 of the Rules of Court. The Court in Lu Ym v. Nabua60 made a thorough
discussion on the matter, to quote:

Sec. 3, Rule 16 of the Rules provides:

Sec. 3. Resolution of motion.—After the hearing, the court may dismiss the action or claim, deny
the motion or order the amendment of the pleading.

The court shall not defer the resolution of the motion for the reason that the ground relied upon
is not indubitable.

In every case, the resolution shall state clearly and distinctly the reasons therefor.

xxxx
Further, it is now specifically required that the resolution on the motion shall clearly and
distinctly state the reasons therefor. This proscribes the common practice of perfunctorily
dismissing the motion for "lack of merit." Such cavalier dispositions can often pose difficulty and
misunderstanding on the part of the aggrieved party in taking recourse therefrom and likewise
on the higher court called upon to resolve the same, usually on certiorari.61

The questioned order of the trial court denying the motion to dismiss with a mere statement
that there are justiciable questions which require a full blown trial falls short of the requirement
of Rule 16 set forth above. Owing to the terseness of its expressed justification, the challenged
order ironically suffers from undefined breadth which is a hallmark of imprecision. With its
unspecific and amorphous thrust, the issuance is inappropriate to the grounds detailed in the
motion to dismiss.

While the requirement to state clearly and distinctly the reasons for the trial court’s resolutory
order under Sec. 3, Rule 16 of the Rules does call for a liberal interpretation, especially since
jurisprudence dictates that it is decisions on cases submitted for

decision that are subject to the stringent requirement of specificity of rulings under Sec. 1, Rule
3662 of the Rules, the trial court’s order in this case leaves too much to the imagination.
(Emphasis supplied.)63

The assailed order disposed of the motion to dismiss in this wise:

xxxx

After a careful scrutiny of the grounds cited in the Motion to Dismiss and the arguments en
contra contained in the Opposition thereto and finding the Motion to Dismiss to be not well
taken as grounds cited are not applicable to the case at bar, the Court hereby DENIES the instant
Motion to Dismiss.

x x x x64
Clearly, the subject order falls short of the content requirement as expounded in Lu Ym v. Nabua.
Despite the aberration, however, the Bank was not misled, though it could have encountered
difficulties or inconvenience because of it. Comprehending, as it did, that the Malolos RTC did
not share its position that Rosemoor had engaged in forum-shopping, it went to great lengths to
impress upon the Court of

Appeals that there was indeed forum-shopping on Rosemoor’s part. But the appellate court did
not likewise agree with the Bank as it soundly debunked the forum-shopping charge. In fact, the
same forum-shopping argument has been fully ventilated before the Court but we are utterly
unimpressed as we made short shrift of the argument earlier on. In the ultimate analysis,
therefore, the trial court’s blunder may be overlooked as it proved to be harmless.

WHEREFORE, considering the foregoing, the Decision of the Court of Appeals in G.R. 163521
dated 26 February 2004 and in G.R No. 159669 dated 20 June 2003 are AFFIRMED. Costs against
petitioner. Petitioner, United Overseas Bank, Phils. and its counsel, Siguion Reyna Montecillo &
Ongsiako Law Offices, are given ten (10) days from notice to EXPLAIN why they should not be
held in contempt of court for making a misrepresentation before the Court as adverted to in this
Decision.

SO ORDERED.

DANTE O. TINGA
Associate Justice

WE CONCUR: