FAR EAST BANK AND TRUST

COMPANY,
Petitioner,

-versus-

SHEMBERG MARKETING
CORPORATION, MACKIE
INDUSTRIES CORPORATION,
BENSON INDUSTRIES, INC.,
KAMARO ENTERPRISES CORP.,
POLYSACCHARIDE CORP.,
PRIME CRAFTS, INC., CEBU
UNITED POLYMER CORP.,
SHEMBERG NATURES CRAFT
INC., MARY U. DACAY[1], HENRY
U. DACAY, BENSON U. DACAY,
RAMON U. DACAY and
ERNESTO U. DACAY, JR.,
Respondents.

mortgage. However, Shemberg

filed a Civil Case in the RTC,
alleging that the employees of
FACTS: Far East Bank required them to
Far East Bank & Trust Company sign "standard pre-printed forms
(FEBTC) petitioner, is a domestic in fine print" such as Promissory
banking corporation organized Notes, Mortgage Forms, Trust
and existing under Philippine Receipts, etc.
laws. It is now managed and It turned out that the Bank's
operated by the Bank of the employees filled the blanks with
Philippine Islands with main office "false and inaccurate entries." Far
in Makati City. East Bank then filed a Motion to
Shemberg and Co. are owners of Dismiss alleging that the docket
parcels of land in Mandue City. fee that Shemberg paid was
Shemberg obtained loans from deficient. According to the Bank,
Far East Bank. In order to secure In real actions, the assessed
the loans, Shemberg mortgaged value of the property or if there is
these lands to Far East Bank. none, the estimated value
Unfortunately, Shemberg failed to thereof, must be alleged in the
pay the loan, thus forcing Far complaint and shall serve as the
East Bank to foreclose the basis for computing the fees.
 Shemberg's defense is that the Hence, the non-payment or insufficient
action is incapable of pecuniary payment of docket fees can entail
estimation because the suit tremendous losses to the government in
primarily involves cancellation of general and to the judiciary in particular.
mortgages. Therefore, there is no
deficiency in the payment of
docket fees. Under Section 19 (1) of Batas
Pambansa Blg. 180, as amended by
ISSUE: whether the trial court has Republic Act No. 7691, Regional Trial
jurisdiction over Civil Case No. MAN- Courts have sole, exclusive, and original
4045 jurisdiction to hear, try, and decide all
civil actions in which the subject of the
HELD: The petitioner contends that in litigation is incapable of pecuniary
real actions, the assessed value of the estimation.
property or if there is none, the
estimated value thereof, must be alleged In Singsong v. Isabela Sawmill, this
in the complaint, and shall serve as the Court laid the test for determining
basis for computing the fees. Nowhere whether the subject matter of an action
in the complaint in Civil Case No. MAN- is incapable of pecuniary estimation:
4045 did respondents allege the 1. Ascertain the nature of the principal
assessed values of their realties. Hence, action or remedy sought.
there is no adequate basis for 2. If the action is primarily for recovery of
computing the proper filing fees. It a sum of money, the claim is
necessarily follows that the fees paid are considered capable of pecuniary
deficient. The trial court, therefore, did estimation. Whether he trial court
not acquire jurisdiction over the case. has jurisdiction would depend
upon the amount of the claim
Respondents counter that a perusal of 3. However, there the basic issue is
the complaint in Civil Case No. MAN- something other than the right to recover
4045 shows that the suit primarily a sum of money, where the money claim
involves cancellation of mortgages, an is only incidental or a consequence of
action incapable of pecuniary the principal relief sought, the action is
estimation. Consequently, petitioners incapable of pecuniary estimation.
contention that there is a deficiency in Here, the primary reliefs prayed for is
the payment of docket fees is without the cancellation of the mortgages for
merit. want of consideration. Jurisprudence
provides that where the issue involves
A court acquires jurisdiction over a case the validity of the mortgage, the action is
only upon the payment of the prescribed one incapable of pecuniary estimation.
fees. The importance of filing fees WHEREFORE, this Court DENIES the
cannot be gainsaid for these are petition. The assailed Decision and
intended to take care of court expenses Resolution of the Court of Appeals in
in the handling of cases in terms of CA-G.R. SP No. 67270
costs of supplies, use of equipment, are AFFIRMED. Costs against
salaries and fringe benefits of personnel, petitioner, now the Bank of the
and others, computed as to man-hours Philippine Islands.
used in the handling of each case.
 City for exercising sole custody
HERALD BLACK DACASIN, G.R. No. over Stephanie contrary to their
168785 Agreement. Respondent sought
Petitioner, the dismissal of the complaint
Present: due to lack of jurisdiction, since
CARPIO, J., Chairperson, Illinois Court hold the jurisdiction
BRION, in enforcing the divorce decree.
- versus - DEL CASTILLO, The trial court held that (1) it is
ABAD, and precluded from taking cognizance
PEREZ, JJ. over the suit considering the
Illinois courts retention of
jurisdiction to enforce its divorce
SHARON DEL MUNDO decree, including its order
DACASIN, Promulgated: awarding sole custody of
Respondent. February 5, 2010 Stephanie to respondent; (2) the
divorce decree is binding on
FACTS: petitioner following the
For review is a dismissal of a nationality rule prevailing in this
suit to enforce a post-foreign jurisdiction; and (3) the
divorce child custody agreement Agreement is void for
for lack of jurisdiction. contravening Article 2035,
On April 1994, petitioner Herald, paragraph 5 of the Civil Code
an American and respondent, prohibiting compromise
Sharon, a Filipino, got married agreements on jurisdiction.
here in the Philippines. The
following year, Sharon got ISSUE: Whether the Trial Court has
pregnant and gave birth to a baby jurisdiction to take cognizance of
girl they named Stephanie. petitioners suit and enforce the
In June of 1999 Sharon sought agreement on the joint custody of the
and obtained from the Illinois parties child.
Court a divorce decree against HELD:
petitioner. In its ruling, apart from
dissolving the marriage of The trial court has jurisdiction but it
petitioner and respondent, the cannot enforce a void agreement
Illinois court also awarded to The RTC is vested with jurisdiction to
respondent sole custody of enforce contracts.
Stephanie and retained Subject matter jurisdiction is conferred
jurisdiction over the case for by law. When petitioner filed suit, the
enforcement purposes. RTC has exclusive original jurisdiction
On 28th of January 2002, over civil actions incapable of pecuniary
petitioner and respondent estimation. An action for specific
executed in Manila a contract performance, such as petitioners suit to
(Agreement) for the joint custody enforce the Agreement on joint child
of Stephanie. Two years after, custody, belongs to this species of
Herald sued Sharon in the actions. Thus jurisdiction-wise, petitioner
Regional Trial Court of Makati went to the right court.
Also, petitioners suit seeks the
enforcement not of the various against respondent British
provisions of the divorce decree but of Airways before the RTC
the post-divorce Agreement on joint of Makati City. She alleged
child custody. Thus, the action lies that on February 28, 2005,
beyond the zone of the Illinois courts she took respondents flight
so-called retained jurisdiction and 548 from London, United
making the case within the jurisdiction of Kingdom to Rome, Italy. Onc
RTC. e on board, she allegedly
Note: Even as the court cannot enforce requested Julian Halliday,
a void agreement, it still ruled that one of the respondents flight
factual and equity considerations militate attendants, to assist her in
against the dismissal of petitioners suit placing her hand-carried
and called for the case to be remanded luggage in the overhead
to settle the question of Stephanies bin. However, Halliday allege
custody. dly refused to help and assist
her, and even sarcastically
EDNA G.R. No. 171092 remarked that If I were to
DIAGO help all 300 passengers in
LHUILLIER, this flight, I would have a
Petitioner, broken back!

Present: Petitioner further alleged that

when the plane was about to
CARPIO, J., Chairperson, land in Rome, Italy, another
- versus - BRION, flight attendant, Nickolas
DEL CASTILLO, Kerrigan, singled her out
ABAD, and from among all the
PEREZ, JJ. passengers in the business
class section to lecture on
Promulgated: plane safety. Allegedly,
Kerrigan made her appear to
the other passengers to be
BRITISH ignorant, uneducated, stupid,
AIRWAYS, and in need of lecturing on
Respondent. March 15, 2010 the safety rules and
regulations of the
FACTS: plane. Affronted, petitioner
Jurisdictio est potestas de publico intro assured Kerrigan that she
ducta cum knew the planes safety
necessitate juris dicendi.Jurisdiction is regulations being a frequent
a power introduced for the public good, traveler. Thereupon,
on account of the necessity of Kerrigan allegedly thrust his
dispensing justice face a mere few centimeters
away from that of the
Edna Diago Lhuillier filed a petitioner and menacingly
Complaintfor damages told her that We dont like
 your attitude. Upon arrival before the court of the place
in Rome, petitioner of destination.
complained to respondents
ground manager and Thus, since a) respondent is
demanded an domiciled in London; b)
apology. However, the latter respondents principal place
declared that the flight of business is in London; c)
stewards were only doing petitioner bought her ticket in
their job. Italy (through Jeepney Travel
S.A.S, in Rome) and d)
Thus, petitioner filed the Rome, Italy is petitioners
complaint for damages, place of destination, then it
praying that respondent be follows that the complaint
ordered to pay P5 million as should only be filed in the
moral damages, P2 million proper courts of London,
as nominal damages, P1 United Kingdom or Rome,
million as exemplary Italy. Likewise, it was alleged
damages, P300,000.00 as that the case must be
attorneys fees, P200,000.00 dismissed for lack of
as litigation expenses, and jurisdiction over the person
cost of the suit. of the respondent because
On May 30, 2005, the summons was
respondent, by way of erroneously served on Euro-
special appearance through Philippine Airline Services,
counsel, filed a Motion to Inc.which is not its resident
Dismiss on grounds of lack agent in the Philippines.
of jurisdiction over the case
and over the person of the
respondent. Respondent RTC of Makati City, Branch
alleged that only the courts 132, issued an
of London, United Order[granting respondents
Kingdom or Rome, Italy, Motion to Dismiss . Petitioner
have jurisdiction over the filed a Motion for
complaint for damages Reconsideration but the
pursuant to the Warsaw motion was denied in an
Convention, Article 28(1) of Order[11] dated January 4,
which provides: An action for 2006.
damages must be brought at
the option of the plaintiff, Issues: WON special appearance of the
either before the court of counsel of respondent in filing the Motion to
domicile of the carrier or his Dismiss and other pleadings before the trial
principal place of business, court can be deemed to be voluntary
or where he has a place of submission to the jurisdiction of the said trial
business through which the court
contract has been made, or HELD: In La Naval Drug Corporation v.
Court of Appeals[48] and elucidated thus:
 rule on voluntary
Special Appearance to appearance the first
Question a Courts sentence of the above-
Jurisdiction Is Not quoted rule means is that
Voluntary Appearance the voluntary appearance
of the defendant in court is
The second sentence of without qualification, in
Sec. 20, Rule 14 of the which case he is deemed
Revised Rules of Civil to have waived his
Procedure clearly provides: defense of lack of
jurisdiction over his person
Sec. due to improper service of
20. Voluntary summons.
appearance. T
he defendants The pleadings filed by
voluntary petitioner in the subject
appearance in forfeiture cases, however, do
the action not show that she voluntarily
shall be appeared without
equivalent to qualification. Petitioner filed
service of the following pleadings in
summons. Forfeiture I: (a) motion to
The inclusion dismiss; (b) motion for
in a motion to reconsideration and/or to
dismiss of admit answer; (c) second
other grounds motion for reconsideration;
aside from (d) motion to consolidate
lack of forfeiture case with plunder
jurisdiction case; and (e) motion to
over the dismiss and/or to quash
person of the Forfeiture I. And in Forfeiture
defendant II: (a) motion to dismiss
shall not be and/or to quash Forfeiture II;
deemed a and (b) motion for partial
voluntary reconsideration.
appearance.
The foregoing pleadings,
Thus, a defendant who particularly the motions to
files a motion to dismiss, dismiss, were filed by
assailing the jurisdiction of petitioner solely for special
the court over his person, appearance with the purpose
together with other of challenging the jurisdiction
grounds raised therein, is of the SB over her person
not deemed to have and that of her three
appeared voluntarily children. Petitioner asserts
before the court. What the therein that SB did not
 acquire jurisdiction over her
person and of her three WHEREFORE, the petition
children for lack of valid is DENIED. The October 14, 2005 Order of
service of summons through the Regional Trial Court of Makati City,
improvident substituted Branch 132, dismissing the complaint for
service of summons in both lack of jurisdiction, is AFFIRMED.
Forfeiture I and Forfeiture II.
This stance the petitioner
never abandoned when she
filed her motions for
reconsideration, even with a
prayer to admit their attached SPOUSES ANTONIO F. ALGURA G.R.
Answer No. 150135
Ex Abundante Ad Cautelam and LORENCITA S.J. ALGURA,
dated January 22, Petitioners,
2005 setting forth affirmative Present:
defenses with a claim for - versus - QUISUMBING, J.,
damages. And the other Chairperson,
subsequent pleadings, CARPIO,
likewise, did not abandon her CARPIO MORALES,
stance and defense of lack THE LOCAL GOVERNMENT TINGA,
of jurisdiction due to and
improper substituted UNIT OF THE CITY
services of summons in the OF NAGA, VELASCO, JR., JJ.
forfeiture cases. Evidently, ATTY. MANUEL TEOXON,
from the foregoing Sec. 20, ENGR. LEON PALMIANO,
Rule 14 of the 1997 Revised NATHAN SERGIO and Promulgated:
Rules on Civil Procedure, BENJAMIN NAVARRO, SR.,
petitioner and her sons did Respondents. October 30, 2006
not voluntarily appear before
the SB constitutive of or FACTS:
equivalent to service of Antonio F. Algura and Lorencita
summons. S.J. Algura filed a Verified
Complaint for damages against
In this case, the special appearance the Naga City Government and
of the counsel of respondent in filing the its officers, arising from the
Motion to Dismiss and other pleadings alleged illegal demolition of their
before the trial court cannot be deemed to residence and boarding house
be voluntary submission to the jurisdiction and for payment of lost income
of the said trial court. We hence disagree derived from fees paid by their
with the contention of the petitioner and rule boarders amounting to PhP
that there was no voluntary appearance 7,000.00 monthly.
before the trial court that could
constitute estoppel or a waiver of Simultaneously, petitioners filed
respondents objection to jurisdiction over its an Ex-Parte Motion to Litigate as
person. Indigent Litigants, showing a
 gross monthly income PhP disqualify them for non-payment
10,474.00 and a net pay of PhP of filing fees. Naga City RTC
3,616.99 for [July 1999. Also a issued an Order disqualifying
Certification issued by the Office petitioners as indigent litigants on
of the City Assessor of Naga City, the ground that they failed to
which stated that petitioners had substantiate their claim for
no property declared in their exemption from payment of legal
name for taxation purposes. fees and to comply with the third
paragraph of Rule 141, Section
Finding that petitioners motion to 18 of the Revised Rules of Court
litigate as indigent litigants was directing them to pay the requisite
meritorious, Executive Judge filing fees.
Jose T. Atienza of the Naga City
RTC, in the September 1, 1999
Order, granted petitioners plea for ISSUE: whether or not petitioners
exemption from filing fees. should be considered as indigent
litigants who qualify for exemption from
Petitioners then filed their Reply paying filing fees.
with Ex-Parte Request for a Pre-
Trial Setting, a pre-trial was held HELD: YES. When the Rules of Court
wherein respondents asked for took effect on January 1, 1964, the rule
five (5) days within which to file a on pauper litigants was found in Rule 3,
Motion to Disqualify Petitioners Section 22 which provided that:
as Indigent Litigants.
On March 13, 2000, respondents SECTION 22. Pauper
filed a Motion to Disqualify the litigant. Any court
Plaintiffs for Non-Payment of may authorize a
Filing Fees. They asserted that in litigant to prosecute
addition to the more than PhP his action or defense
3,000.00 net income of petitioner as a pauper upon a
Antonio Algura, who is a member proper showing that
of the Philippine National Police, he has no means to
spouse Lorencita Algura also had that effect by
a mini-store and a computer. In affidavits, certificate
addition, it was claimed that of the corresponding
petitioners derived additional provincial, city or
income from their computer shop municipal treasurer,
patronized by students and from or otherwise. Such
several boarders who paid rentals authority[,] once
to them. Hence, respondents given[,] shall include
concluded that petitioners were an exemption from
not indigent litigants. payment of legal fees
and from filing appeal
Petitioners subsequently bond, printed record
interposed their Opposition to the and printed brief. The
Motion to respondents motion to legal fees shall be a
 lien to any judgment value of not more
rendered in the case than P24,000.00, or
[favorable] to the not more than
pauper, unless the P18,000.00 as the
court otherwise case may be.
provides. Such exemption shall
include exemption
from payment of fees
From the same Rules of Court, for filing appeal bond,
Rule 141 on Legal Fees, on the other printed record and
hand, did not contain any provision on printed brief.
pauper litigants.
The legal fees shall
On July 19, 1984, the Court, in be a lien on the
Administrative Matter No. 83-6-389-0 monetary or property
(formerly G.R. No. 64274), approved the judgment rendered in
recommendation of the Committee on favor of the pauper-
the Revision of Rates and Charges of litigant.
Court Fees, through its Chairman, then
Justice Felix V. Makasiar, to revise the To be entitled to the
fees in Rule 141 of the Rules of Court to exemption herein
generate funds to effectively cover provided, the pauper-
administrative costs for services litigant shall execute
[20]
rendered by the courts. A provision on an affidavit that he
pauper litigants was inserted which does not earn the
reads: gross income
abovementioned, nor
SECTION own any real property
16. Pauper-litigants with the assessed
exempt from value afore-
payment of court mentioned [sic],
fees.Pauper-litigants supported by a
include wage earners certification to that
whose gross income effect by the
do not exceed provincial, city or
P2,000.00 a month or town assessor or
P24,000.00 a year for treasurer.
those residing in
Metro Manila, and
P1,500.00 a month or When the Rules of Court on Civil
P18,000.00 a year for Procedure were amended by the 1997
those residing Rules of Civil Procedure (inclusive of
outside Metro Manila, Rules 1 to 71) in Supreme Court
or those who do not Resolution in Bar Matter No. 803 dated
own real property April 8, 1997, which became effective on
with an assessed July 1, 1997, Rule 3, Section 22 of the
Revised Rules of Court was superseded Any adverse party
by Rule 3, Section 21 of said 1997 may contest the grant
Rules of Civil Procedure, as follows: of such authority at
any time before
SECTION judgment is rendered
21. Indigent party.A by the trial court. If
party may be the court should
authorized to litigate determine after
his action, claim or hearing that the party
defense as an declared as an
indigent if the court, indigent is in fact a
upon an ex person with sufficient
parte application and income or property,
hearing, is satisfied the proper docket
that the party is one and other lawful fees
who has no money or shall be assessed
property sufficient and collected by the
and available for clerk of court. If
food, shelter and payment is not made
basic necessities for within the time fixed
himself and his by the court,
family. execution shall issue
for the payment
Such authority shall thereof, without
include an exemption prejudice to such
from payment of other sanctions as
docket and other the court may
lawful fees, and of impose.
transcripts of
stenographic notes
which the court may At the time the Rules on Civil Procedure
order to be furnished were amended by the Court in Bar
him. The amount of Matter No. 803, however, there was no
the docket and other amendment made on Rule 141, Section
lawful fees which the 16 on pauper litigants.
indigent was On March 1, 2000, Rule 141 on Legal
exempted from Fees was amended by the Court in A.M.
paying shall be a lien No. 00-2-01-SC, whereby certain fees
on any judgment were increased or adjusted. In this
rendered in the case Resolution, the Court amended Section
favorable to the 16 of Rule 141, making it Section 18,
indigent, unless the which now reads:
court otherwise
provides. SECTION
18. Pauper-litigants
exempt from
payment of legal affidavit of a
fees.Pauper litigants disinterested person
(a) whose gross attesting to the truth
income and that of of the litigants
their immediate affidavit.
family do not exceed
four thousand Any falsity in the
(P4,000.00) pesos a affidavit of a litigant
month if residing in or disinterested
Metro Manila, and person shall be
three thousand sufficient cause to
(P3,000.00) pesos a strike out the
month if residing pleading of that party,
outside Metro Manila, without prejudice to
and (b) who do not whatever criminal
own real property liability may have
with an assessed been incurred.
value of more than
fifty thousand
(P50,000.00) pesos It can be readily seen that the rule on
shall be exempt from pauper litigants was inserted in Rule
the payment of legal 141 without revoking or
fees. amending Section 21 of Rule 3, which
provides for the exemption of pauper
The legal fees shall litigants from payment of filing fees.
be a lien on any Thus, on March 1, 2000, there were
judgment rendered in two existing rules on pauper
the case favorably to litigants; namely, Rule 3, Section
the pauper litigant, 21 andRule 141, Section 18.
unless the court
otherwise provides. On August 16, 2004, Section 18 of Rule
141 was further amended in
To be entitled to the Administrative Matter No. 04-2-04-SC,
exemption herein which became effective on the same
provided, the litigant date. It then became Section 19 of Rule
shall execute an 141, to wit:
affidavit that he and
his immediate family
do not earn the gross
income SEC. 19. Indigent litigants
abovementioned, nor exempt from payment of
do they own any real legal fees.INDIGENT
property with the LITIGANTS (A) WHOSE
assessed value GROSS INCOME AND THAT
aforementioned, OF THEIR IMMEDIATE
supported by an FAMILY DO NOT EXCEED
AN AMOUNT DOUBLE THE without prejudice to
MONTHLY MINIMUM WAGE whatever criminal
OF AN EMPLOYEE AND (B) liability may have
WHO DO NOT OWN REAL been
PROPERTY WITH A FAIR incurred.(Emphasis
MARKET VALUE AS STATED supplied.)
IN THE CURRENT TAX
DECLARATION OF MORE
THAN THREE HUNDRED Amendments to Rule 141 (including the
THOUSAND (P300,000.00) amendment to Rule 141, Section 18)
PESOS SHALL BE EXEMPT were made to implement RA 9227 which
FROM PAYMENT OF LEGAL brought about new increases in filing
FEES. fees. Specifically, in the August 16, 2004
amendment, the ceiling for the gross
The legal fees shall be a lien income of litigants applying for
on any judgment rendered in exemption and that of their immediate
the case favorable to the family was increased from PhP 4,000.00
indigent litigant unless the a month in Metro Manila and PhP
court otherwise provides. 3,000.00 a month outside Metro Manila,
to double the monthly minimum wage of
To be entitled to the an employee; and the maximum value of
exemption herein provided, the property owned by the applicant was
the litigant shall execute an increased from an assessed value of
affidavit that he and his PhP 50,000.00 to a maximum market
immediate family do not value of PhP 300,000.00, to be able to
earn a gross income accommodate more indigent litigants
abovementioned, and they and promote easier access to justice by
do not own any real property the poor and the marginalized in the
with the fair value wake of these new increases in filing
aforementioned, supported fees.
by an affidavit of a
disinterested person Even if there was an amendment to
attesting to the truth of the Rule 141 on August 16, 2004, there was
litigants affidavit. The current still no amendment or recall of Rule 3,
tax declaration, if any, shall be Section 21 on indigent litigants.
attached to the litigants Recapitulating the rules on indigent
affidavit. litigants, therefore, if the applicant for
exemption meets the salary and
Any falsity in the property requirements under Section 19
affidavit of litigant or of Rule 141, then the grant of the
disinterested person application is mandatory. On the other
shall be sufficient hand, when the application does not
cause to dismiss the satisfy one or both requirements, then
complaint or action or the application should not be denied
to strike out the outright; instead, the court should apply
pleading of that party, the indigency test under Section 21 of
Rule 3 and use its sound discretion in Filed by, spouses Ederlinda
determining the merits of the prayer for Gallardo-Manzo and Daniel
exemption. Manzo, against the petitioners,
WHEREFORE, the petition spouses Ramon and Eulogia
is GRANTED and the April 14, 2000 Manila, before the Metropolitan
Order granting the disqualification of Trial Court (MeTC) of Las Pias
petitioners, the July 17, 2000 Order City, Branch 79 (Civil Case No.
denying petitioners Motion for 3537).
Reconsideration, and the September 11, On June 30, 1982, Ederlinda
2001 Order dismissing the case in Civil Gallardo leased two (2) parcels of
Case No. RTC-99-4403 before the Naga land situated along Real St.,
City RTC, Branch 27 Manuyo, Las Pias, Metro Manila,
are ANNULLED and SET to Eulogia Manila for a period of
ASIDE. Furthermore, the Naga City ten (10) years at a monthly
RTC is ordered to set the Ex- rental(s) of P2,000.00 for the first
Parte Motion to Litigate as Indigent two years, and thereafter an
Litigants for hearing and apply Rule 3, increase of ten (10) percent every
Section 21 of the 1997 Rules of Civil after two years. They also agreed
Procedure to determine whether that the lessee shall have the
petitioners can qualify as indigent option to buy the property within
litigants. two (2) years from the date of
execution of the contract of lease
at a fair market value of One
SPOUSES G.R. No. 163602 Hundred and Fifty Thousand
EULOGIA Pesos (P150,000.00)
MANILA and Present: The contract of lease expired on
RAMON July 1, 1992 but the lessee
MANILA, CORONA, C.J., continued in possession of the
Petitioners, Chairperson, property despite a formal demand
LEONARDO-DE letter dated August 8, 1992, to
CASTRO, vacate the same and pay the
BERSAMIN, rental arrearages. In a letter reply
- versus - DEL CASTILLO, dated August 12, 1992, herein
and defendant claimed that no rental
VILLARAMA, fee is due because she allegedly
JR., JJ. became the owner of the property
at the time she communicated to
SPOUSES Promulgated: the plaintiff her desire to exercise
EDERLINDA the option to buy the said
GALLARDO- September 7, 2011 property. Their disagreement was
MANZO and later brought to the Barangay for
DANIEL MANZO, conciliation but the parties failed
Respondents. to reach a compromise, hence
the present action.[
FACTS: MeTC rendered its decision in
favor of the plaintiffs.
 Petitioners appealed to the appropriate remedies.[13]The only
Regional Trial Court (RTC) of grounds provided in Sec. 2, Rule 47 are
Makati City, Branch 63 (Civil Case extrinsic fraud and lack of jurisdiction.
No. 93-3733) which reversed the In any event, the petition for
MeTC. The RTC found that annulment was based not on fraudulent
petitioners have in fact exercised assurances or negligent acts of their
their option to buy the leased counsel, but on lack of jurisdiction.
property but the respondents Petitioners assail the CA in
refused to honor the same. holding that the RTC decision is void
Respondents filed a motion for because it granted a relief inconsistent
reconsideration on December 23, with the nature of an ejectment suit and
1994. In its Order dated March 24, not even prayed for by the respondents
1995, the RTC denied the motion in their answer. They contend that
for having been filed beyond the whatever maybe questionable in the
fifteen (15)-day period considering decision is a ground for assignment of
that respondents received a copy errors on appeal or in certain cases, as
of the decision on December 7, ground for a special civil action for
1994. Consequently, the certiorari under Rule 65 and not as
November 18, 1994 decision of ground for its annulment. On the other
the RTC became final and hand, respondents assert that the CA,
executory.[9] being a higher court, has the power to
CA granted the petition, annulled adopt, reverse or modify the findings of
the November 18, 1994 RTC the RTC in this case. They point out that
decision and reinstated the July the CA in the exercise of its sound
14, 1993 MeTC decision. With discretion found the RTCs findings
the denial of their motion for unsupported by the evidence on record
reconsideration, petitioners filed which also indicated that the loss of
the present petition ordinary remedies of appeal, new trial
and petition for review was not due to
the fault of the respondents.
issues:
Lack of jurisdiction as a ground
WON Petition is meritorius. for annulment of judgment refers to
either lack of jurisdiction over the person
of the defending party or over the
HELD: Yes. A petition for annulment of subject matter of the claim.[16] In a
judgments or final orders of a Regional petition for annulment of judgment
Trial Court in civil actions can only be based on lack of jurisdiction, petitioner
availed of where the ordinary remedies must show not merely an abuse of
of new trial, appeal, petition for relief or jurisdictional discretion but an
other appropriate remedies are no absolute lack of jurisdiction. Lack of
longer available through no fault of the jurisdiction means absence of or no
petitioner.[12] It is a remedy granted only jurisdiction, that is, the court should not
under exceptional circumstances and have taken cognizance of the petition
such action is never resorted to as a because the law does not vest it with
substitute for a partys own neglect in not jurisdiction over the subject
promptly availing of the ordinary or other matter. Jurisdiction over the nature of
the action or subject matter is conferred option to buy the leased premises within
by law.[17] a certain period (two years from date of
There is no dispute that the RTC execution) and for a fixed price
is vested with appellate jurisdiction over (P150,000.00).[23] This cannot be done
ejectment cases decided by the MeTC, in an ejectment case where the only
MTC or MCTC. We note that petitioners issue for resolution is who between the
attack on the validity of the RTC parties is entitled to the physical
decision pertains to a relief erroneously possession of the property.
granted on appeal, and beyond the Such erroneous grant of relief to
scope of judgment provided in Section 6 the defendants on appeal, however, is
(now Section 17) of Rule 70.[18] While but an exercise of jurisdiction by the
the court in an ejectment case may RTC. Jurisdiction is not the same as the
delve on the issue of ownership or exercise of jurisdiction. As distinguished
possession de jure solely for the from the exercise of jurisdiction,
purpose of resolving the issue of jurisdiction is the authority to decide a
possession de facto, it has no cause, and not the decision rendered
jurisdiction to settle with finality the issue therein.[24] The ground for annulment of
of ownership[19] and any pronouncement the decision is absence of, or no,
made by it on the question of ownership jurisdiction; that is, the court should not
is provisional in nature.[20] A judgment in have taken cognizance of the petition
a forcible entry or detainer case because the law does not vest it with
disposes of no other issue than jurisdiction over the subject matter.[25]
possession and establishes only who
has the right of possession, but by no MEMORACI G.R. No. 173292
means constitutes a bar to an action for ON Z.
determination of who has the right or CRUZ,
title of ownership.[21] We have held represented
that although it was proper for the RTC, by
on appeal in the ejectment suit, to delve EDGARDO
on the issue of ownership and receive Z. CRUZ,
evidence on possession de jure, it Petitioner, Present:
cannot adjudicate with semblance of
finality the ownership of the property to CARPIO, J.,
either party by ordering the cancellation Chairperson,NACH
of the TCT.[22] URA,
In this case, the RTC acted in - versus - BERSAMIN,*
excess of its jurisdiction in deciding the ABAD,
appeal of respondents when, instead of and MENDOZA, JJ.
simply dismissing the complaint and
awarding any counterclaim for costs due OSWALDO Promulgated:
to the defendants (petitioners), it Z. CRUZ,
ordered the respondents-lessors to Respondent. September 1, 2010
execute a deed of absolute sale in favor
of the petitioners-lessees, on the basis FACTS:
of its own interpretation of the Contract On October 18, 1993,
of Lease which granted petitioners the Memoracion Z. Cruz filed
 with the Regional Trial unsettled, the barangay x x
Court in Manila a x issued x x x a
Complaint against her son, certification to file [an]
defendant-appellee action in court, now the
Oswaldo Z. Cruz, for subject of controversy.
Annulment of Sale,
Reconveyance and After Memoracion x x x
Damages. finished presenting her
evidence in chief, she died
Memoracion claimed that on October 30,
during her union with her 1996. Through a
common-law husband Manifestation,
(deceased) Architect Memoracions counsel,
Guido M. Cruz, she Atty. Roberto T. Neri,
acquired a parcel of land notified the trial court on
located at Tabora corner January 13, 1997 of the
Limay Streets, Bo. Obrero, fact of such death,
Tondo Manila; that evidenced by a certificate
sometime in July 1992, thereof.
she discovered that the
title to the said property For his part, appellee filed
was transferred by a Motion to Dismiss on the
appellee and the latters grounds that (1) the
wife in their names in plaintiffs reconveyance
August 1991 under TCT action is a personal action
No. 0-199377 by virtue of which does not survive a
a Deed of Sale dated partys death, pursuant to
February 12, 1973; that Section 21, Rule 3 of the
the said deed was Revised Rules of Court,
executed through fraud, and (2) to allow the case to
forgery, misrepresentation continue would result in
and simulation, hence, null legal absurdity whereby
and void; that she, with the one heir is representing
help of her husbands the defendant [and is a]
relatives, asked appellee co-plaintiff in this case.
to settle the problem; that
despite repeated pleas On June 2, 1997, the trial
and demands, appellee court issued the appealed
refused to reconvey to her Order in a disposition that
the said property; that she reads: Wherefore, in view
filed a complaint against of the foregoing, this case
appellee before the office is ordered dismissed
of the Barangay having without prejudice to the
jurisdiction over the prosecution thereof in the
subject property; and that proper estate proceedings.
since the matter was
 On October 17, 1997, Petitioners Motion for
Memoracions son-heir, Reconsideration was denied by
Edgardo Z. Cruz, the CA in its Resolution of 21
manifested to the trial June 2006. Hence, this appeal.
court that he is retaining
the services of Atty. Neri
for the
plaintiff.Simultaneously,
Atty. Neri filed a Motion for
Reconsideration of the ISSUE: Whether or not the Court of
June 2, 1997 Appeals erred in affirming with
Order. However, the said modification the RTC Order dismissing
motion was subsequently the Petition for Annulment of Deed of
denied by Acting Presiding Sale, Reconveyance and Damages.
Judge Cielito N. Mindaro-
Grulla [on October 31,
2000]. HELD: The CA erred in affirming
RTCs dismissal of thePetition for
Thereafter, Edgardo Cruz, Annulment of Deed of Sale,
as an heir of Memoracion Reconveyance and Damages
Cruz, filed a notice of
appeal in behalf of the
deceased plaintiff, signed When a party dies during the pendency
by Atty. Neri, but the of a case, Section 16, Rule 3 of the
appeal was dismissed by 1997 Revised Rules of Civil Procedure
Judge Mindaro-Grulla, necessarily applies, viz:
[stating that] the proper Sec. 16. Death of party;
remedy being certiorari duty of counsel. -
under Rule 65 of the Rules Whenever a party to a
of Court. On appellants pending action dies, and
motion for reconsideration, the claim is not thereby
Judge Lucia Pena extinguished, it shall be
Purugganan granted the the duty of his counsel to
same, stating that the inform the court within
remedy under the thirty (30) days after such
circumstances is ordinary death of the fact thereof,
appeal.[4] and to give the name and
address of his legal
representative or
The Court of Appeals Ruling - representatives. Failure of
the CA rendered judgment counsel to comply with
affirming with modification the this duty shall be a
RTC decision. ground for disciplinary
action.

The heirs of the deceased

 may be allowed to be SEC. 17. Death of party. -
substituted for the After a party dies and the
deceased, without claim is not thereby
requiring the appointment extinguished, the court shall
of an executor or order, upon proper notice, the
administrator and the legal representative of the
court may appoint a deceased to appear and to be
guardian ad litem for the substituted for the deceased,
minor heirs. within a period of thirty (30)
days, or within such time as
The court shall forthwith may be granted. If the legal
order said legal representative fails to appear
representative or within said time, the court
representatives to appear may order the opposing party
and be substituted within to procure the appointment of
a period of thirty (30) days a legal representative of the
from notice. deceased within a time to be
specified by the court, and
If no legal representative the representative shall
is named by the counsel immediately appear for and
for the deceased party, or on behalf of the interest of the
if the one so named shall deceased. The court charges
fail to appear within the involved in procuring such
specified period, the court appointment, if defrayed by
may order the opposing the opposing party, may be
party, within a specified recovered as costs. The heirs
time, to procure the of the deceased may be
appointment of an allowed to be substituted for
executor or administrator the deceased, without
for the estate of the requiring the appointment of
deceased and the latter an executor or administrator
shall immediately appear and the court may appoint
for and on behalf of the guardian ad litem for the
deceased. The court minor heirs.
charges in procuring such
appointment, if defrayed If the action survives despite death of a
by the opposing party, party, it is the duty of the deceaseds
may be recovered as counsel to inform the court of such
costs. death, and to give the names and
addresses of the deceaseds legal
representatives. The deceased may be
substituted by his heirs in the pending
The foregoing section is a revision of action. As explained in Bonilla:
Section 17, Rule 3 of the old Rules of
Court: x x x Article 777 of the Civil
Code provides that the rights
 to the succession are appointment of an executor or
transmitted from the moment administrator for the estate of the
of the death of the decedent. deceased. The reason for this rule is to
From the moment of the protect all concerned who may be
death of the decedent, the affected by the intervening death,
heirs become the absolute particularly the deceased and his
owners of his property, estate.[11]
subject to the rights and In the instant case, petitioner (plaintiff)
obligations of the decedent, Memoracion Z. Cruz died on 30 October
and they cannot be deprived 1996. Her counsel, Atty. Roberto T.
of their rights thereto except Neri, notified the trial court of such death
by the methods provided for on 13 January 1997
by law. The moment of death
is the determining factor On 24 January 1997, respondent
when the heirs acquire a (defendant) Oswaldo Z. Cruz
definite right to the moved to dismiss the case
inheritance whether such alleging that it did not survive
right be pure or contingent. Memoracions death. The RTC
The right of the heirs to the granted the motion to dismiss in
property of the deceased the assailed Order dated 2 June
vests in them even before 1997.
judicial declaration of their
being heirs in the testate or We rule that it was error for the RTC to
intestate proceedings. When dismiss the case. As mentioned earlier,
[plaintiff], therefore, died[,] her the petition for annulment of deed of
claim or right to the parcels of sale involves property and property
land x x x was not rights, and hence, survives the death of
extinguished by her death but petitioner Memoracion. The RTC was
was transmitted to her heirs informed, albeit belatedly,[13] of the
upon her death. Her heirs death of Memoracion, and was supplied
have thus acquired interest in with the name and address of her legal
the properties in litigation and representative, Edgardo Cruz. What the
became parties in interest in RTC could have done was to require
the case. There is, therefore, Edgardo Cruz to appear in court and
no reason for the respondent substitute Memoracion as party to the
Court not to allow their pending case, pursuant to Section 16,
substitution as parties in Rule 3 of the 1997 Revised Rules of
interest for the deceased Civil Procedure, and established
plaintiff.[10] jurisprudence.

If no legal representative is named by We note that on 17 October 1997,

the counsel of the deceased, or the legal Edgardo Cruz filed with the RTC a
representative fails to appear within a Manifestation, stating that he is retaining
specified period, it is the duty of the the services of Atty. Roberto T. Neri. We
court where the case is pending to order quote:[14]
the opposing party to procure the
 UNDERSIGNED HEIR of THE LOCAL GOVERNMENT TINGA,
the late Memoracion Z. and
Cruz respectfully manifests UNIT OF THE CITY
that he is retaining the OF NAGA, VELASCO, JR., JJ.
services ATTY. MANUEL TEOXON,
of ATTY. ROBERTO T. ENGR. LEON PALMIANO,
NERI as counsel for the NATHAN SERGIO and Promulgated:
plaintiff. BENJAMIN NAVARRO, SR.,
Respondents. October 30, 2006
(Sgd.) EDGARDO Z.
CRUZ
Plaintiff Souses Antonio F. Algura and
Lorencita S.J. Algura filed a
Consistent with our ruling in Heirs of Verified Complaint for damages
Haberer v. Court of Appeals,[15] we against the Naga City
consider such Manifestation, signed by Government and its officers,
Memoracions heir, Edgardo Cruz, and arising from the alleged illegal
retaining Atty. Neris services as demolition of their residence and
counsel, a formal boarding house and for payment
substitution of deceased Memoracion by of lost income derived from fees
her heir, Edgardo Cruz. It also needs paid by their boarders amounting
mention that Oswaldo Cruz, although to PhP 7,000.00 monthly.
also an heir of Memoracion, should be Simultaneously, petitioners filed
excluded as a legal representative in the an Ex-Parte Motion to Litigate as
case for being an adverse party Indigent Litigants, to which
therein.[16] petitioner Antonio Algura's Pay
Slip) was appended, showing a
WHEREFORE, we GRANT the gross monthly income of Ten
petition. We REVERSE the Court of Thousand Four Hundred Seventy
Appeals Decision dated 20 December Four Pesos (PhP 10,474.00) and
2005 and Resolution dated 21 June a net pay of Three Thousand Six
2006 in CA-G.R. CV No. Hundred Sixteen Pesos and
80355. We REMAND this case to the Ninety Nine Centavos (PhP
Regional Trial Court of the National 3,616.99) for [the month of] July
Capital Judicial Region, Branch 30, 1999. Also attached as Annex "B"
Manila, for further proceedings. to the motion was a July 1999
Certification issued by the Office
SPOUSES ANTONIO F. ALGURA G.R. of the City Assessor of Naga City,
No. 150135 which stated that petitioners had
and LORENCITA S.J. ALGURA, no property declared in their
Petitioners, name for taxation purposes.
Present: Finding that petitioners' motion to
- versus - QUISUMBING, J., litigate as indigent litigants was
Chairperson, meritorious, Executive Judge
CARPIO, Jose T. Atienza of the Naga City
CARPIO MORALES, RTC, in the September 1, 1999
 Order, granted petitioners' plea 3,000.00 net income of petitioner
for exemption from filing fees. Antonio Algura, who is a member
Meanwhile, as a result of of the Philippine National Police,
respondent Naga City spouse Lorencita Algura also had
Government's demolition of a a mini-store and a computer shop
portion of petitioners' house, the on the ground floor of their
Alguras allegedly lost a monthly residence along Bayawas St.,
income of PhP 7,000.00 from Sta. Cruz, Naga City. Also,
their boarders' rentals. With the respondents claimed that
loss of the rentals, the meager petitioners' second floor was
income from Lorencita used as their residence and as a
Algura's sari-sari store and boarding house, from which they
Antonio Algura's small take home earned more than PhP 3,000.00
pay became insufficient for the a month. In addition, it was
expenses of the Algura spouses claimed that petitioners derived
and their six (6) children for their additional income from their
basic needs including food, bills, computer shop patronized by
clothes, and schooling, among students and from several
others. boarders who paid rentals to
On October 1999, respondents them. Hence, respondents
filed an Answer with concluded that petitioners were
Counterclaim dated October 10, not indigent litigants.
1999, arguing that the defenses On March 2000, petitioners
of the petitioners in the complaint subsequently interposed their
had no cause of action, the Opposition to the Motion to
spouses' boarding house blocked respondents' motion to disqualify
the road right of way, and said them for non-payment of filing
structure was a nuisance per se. fees.
Praying that the counterclaim of On April 2000, the Naga City
defendants (respondents) be RTC issued an Order
dismissed, petitioners then filed disqualifying petitioners as
their Reply with Ex-Parte Request indigent litigants on the ground
for a Pre-Trial Setting before the that they failed to substantiate
Naga City RTC on October 19, their claim for exemption from
1999. On February 3, 2000, a payment of legal fees and to
pre-trial was held wherein comply with the third paragraph
respondents asked for five (5) of Rule 141, Section 18 of the
days within which to file a Motion Revised Rules of Court
to Disqualify Petitioners as directing them to pay the requisite
Indigent Litigants. filing fees.
On March 2000, respondents On April 2000, petitioners filed a
filed a Motion to Disqualify the Motion for Reconsideration of the
Plaintiffs for Non-Payment of April 2000 Order. On May 2000,
Filing Fees dated March 10, respondents then filed their
2000. They asserted that in Comment/Objections to
addition to the more than PhP
 petitioner's Motion for were her neighbors; that they
Reconsideration. derived substantial income from
On May 2000, the trial court their boarders; that they lost said
issued an Order giving petitioners income from their boarders'
the opportunity to comply with the rentals when the Local
requisites laid down in Section Government Unit of the City of
18, Rule 141, for them to qualify Naga, through its officers,
as indigent litigants. demolished part of their house
On May 2000, petitioners because from that time, only a
submitted their few boarders could be
15
Compliance attaching the accommodated; that the income
affidavits of petitioner Lorencita from the small store, the
Algura16 and Erlinda boarders, and the meager salary
Bangate,17 to comply with the of Antonio Algura were
requirements of then Rule 141, insufficient for their basic
Section 18 of the Rules of Court necessities like food and clothing,
and in support of their claim to be considering that the Algura
declared as indigent litigants. spouses had six (6) children; and
In her May 2000 Affidavit, that she knew that petitioners did
petitioner Lorencita Algura not own any real property.
claimed that the demolition of Thereafter, Naga City RTC Acting
their small dwelling deprived her Presiding Judge Andres B.
of a monthly income amounting to Barsaga, Jr. issued his July 17,
PhP 7,000.00. She, her husband, 200018 Order denying the
and their six (6) minor children petitioners' Motion for
had to rely mainly on her Reconsideration.
husband's salary as a policeman
which provided them a monthly Issue: WON petitioners Algura should
amount of PhP 3,500.00, more or be considered as indigent litigants who
less. Also, they did not own any qualify for exemption from paying filing
real property as certified by the fees.
assessor's office of Naga City.
More so, according to her, the
meager net income from her Held:
small sari-sari store and the Yes. Applying Rule 3, Section 21 of the
rentals of some boarders, plus 1997 Rules of Civil Procedure, The
the salary of her husband, were petitioner Algura should be declared and
not enough to pay the family's considered as indigent litigants who
basic necessities. qualify for exemption from paying filing
To buttress their position as fees. The court rule that if the applicant
qualified indigent litigants, for exemption meets the salary and
petitioners also submitted the property requirements under Section 19
affidavit of Erlinda Bangate, who of Rule 141, then the grant of the
attested under oath, that she application is mandatory. On the other
personally knew spouses Antonio hand, when the application does not
Algura and Lorencita Algura, who satisfy one or both requirements, then
the application should not be denied
outright; instead, the court should apply
the "indigency test" under Section 21 of
Rule 3 and use its sound discretion in
determining the merits of the prayer for
exemption.
In the Case at bar,the trial court should
have applied Rule 3, Section 21 to the
application of the Alguras after their
affidavits and supporting documents
showed that petitioners did not satisfy
the twin requirements on gross monthly
income and ownership of real property
under Rule 141. Instead of disqualifying
the Alguras as indigent litigants, the trial
court should have called a hearing as
required by Rule 3, Section 21 to enable
the petitioners to adduce evidence to
show that they didn't have property and
money sufficient and available for food,
shelter, and basic necessities for them
and their family. In that hearing, the
respondents would have had the right to
also present evidence to refute the
allegations and evidence in support of
the application of the petitioners to
litigate as indigent litigants. Since this
Court is not a trier of facts, it will have to
remand the case to the trial court to
determine whether petitioners can be
considered as indigent litigants using the
standards set in Rule 3, Section 21.