IN RE: EXEMPTION OF A.M. NO. 05-10-20-SC paying the legal fees provided in this rule.
paying the legal fees provided in this rule. Local government units and
THE NATIONAL POWER
CORPORATION FROM PAYMENT Present:
OF FILING/ DOCKET FEES
March 10, 2010
x ---------------------------------------------------------------------------------------- x
RESOLUTION
MENDOZA, J.:
The National Power Corporation (NPC) seeks clarification from the Court on whether or
not it is exempt from the payment of filing fees, appeal bonds and supersedeas bonds.
On December 6, 2005, the Court issued A.M. No. 05-10-20-SC, In re:
Exemption of the National Power Corporation from the Payment of Filing/Docket
Fees, on the basis of Section 13, Republic Act No. 6395 (An Act Revising the Charter of
the National Power Corporation). It reads:
The Court Resolved, upon the recommendation of the Office
of the Court Administrator, to DECLARE that the National Power
Corporation (NPC) is still exempt from the payment of filing fees,
appeals bond, and supersedeas bonds.
On October 27, 2009, however, the Court issued A.M. No. 05-10-20-
SC stating that:
The Court Resolved, upon recommendation of the Committee on the Revision of the
Rules of Court, to DENY the request of the National Power Corporation (NPC) for
exemption from the payment of filing fees pursuant to Section 10 of Republic Act No.
6395, as amended by Section 13 of Presidential Decree No. 938. The request appears
to run counter to Section 5(5), Article VIII of the Constitution, in the rule-making power of
the Supreme Court over the rules on pleading, practice and procedure in all courts, which
includes the sole power to fix the filing fees of cases in courts.
Hence, the subject letter of NPC for clarification as to its exemption from the
payment of filing fees and court fees.
Section 22 of Rule 141 reads:
Sec. 22. Government exempt. The Republic of
the Philippines, its agencies and instrumentalities are exempt from
government-owned or controlled corporations with or without
independent charters are not exempt from paying such fees.
(emphasis supplied)
Section 70 of Republic Act No. 9136 (Electric Power Industry Reform Act of 2001), on
privatization of NPC assets, expressly states that the NPC shall remain as a national
government-owned and controlled corporation.
Thus, NPC is not exempt from payment of filing fees.
The non-exemption of NPC is further fortified by the promulgation on February
11, 2010 of A.M. No. 08-2-01-0, In re: Petition for Recognition of the Exemption of the
Government Service Insurance System (GSIS) from Payment of Legal Fees. In said
case, the Court, citing Echegaray v. Secretary of Justice,[1] stressed that the 1987
Constitution took away the power of Congress to repeal, alter or supplement rules
concerning pleading, practice, and procedure; and that the power to promulgate these
rules is no longer shared by the Court with Congress and the Executive, thus:
Since the payment of legal fees is a vital component of the rules
promulgated by this Court concerning pleading, practice and
procedure, it cannot be validly annulled, changed or modified by
Congress. As one of the safeguards of this Courts institutional
independence, the power to promulgate rules of pleading, practice and
procedure is now the Courts exclusive domain. That power is no longer
shared by this Court with Congress, much less the Executive.
Speaking for the Court, then Associate Justice (now Chief Justice)
Reynato S. Puno traced the history of the rule-making power of this
Court and highlighted its evolution and development in Echegaray v.
Secretary of Justice:
Under the 1935 Constitution, the power of this Court
to promulgate rules concerning pleading, practice
and procedure was granted but it appeared to be co-
existent with legislative power for it was subject to
the power of Congress to repeal, alter or
supplement. Thus, its Section 13, Article VIII
provides:
Sec.13. The Supreme Court shall
have the power to promulgate
rules concerning pleading,
practice and procedure in all
courts, and the admission to the
practice of law. Said rules shall be
uniform for all courts of the same
grade and shall not diminish,
increase, or modify substantive
rights. The existing laws on
 pleading, practice, and procedure
are hereby repealed as statutes,
and are declared Rules of Court,
subject to the power of the
Supreme Court to alter and
modify the same. The Congress
shall have the power to repeal,
alter or supplement the rules
concerning pleading, practice and
procedure, and the admission to
the practice of law in
the Philippines.
xxxxxxxxx
[T]he 1973 Constitution reiterated the power of
this Court to promulgate rules concerning pleading,
practice, and procedure in all courts, x x x which,
however, may be repealed, altered or supplemented
by the Batasang Pambansa x x x. More completely,
Section 5(2) [sic] 5 of its Article X provided:
xxxxxxxxx
Sec. 5. The Supreme
Court shall have the following
powers.
xxxxxxxxx
(5) Promulgate rules
concerning pleading, practice,
and procedure in all courts, the
admission to the practice of law,
and the integration of the Bar,
which, however, may be
repealed, altered, or
supplemented by the Batasang
Pambansa. Such rules shall
provide a simplified and
inexpensive procedure for the
speedy disposition of case, shall
be uniform for all courts of the
same grade, and shall not
diminish, increase, or modify
substantive rights.
xxxxxxxx
The 1987 Constitution molded an
even stronger and more independent
judiciary. Among others, it enhanced the rule
making power of this Court. Its Section 5(5),
Article VIII provides:
xxxxxxxxx
Section 5. The Supreme Court
shall have the following powers.
xxxxxxxxx
(5) Promulgate rules
concerning the protection and
enforcement of constitutional
rights, pleading, practice, and
procedure in all courts, the
admission to the practice of law,
the Integrated Bar, and legal
assistance to the
underprivileged. Such rules shall
provide a simplified and
inexpensive procedure for the
speedy disposition of cases, shall
be uniform for all courts of the
same grade, and shall not
diminish, increase, or modify
substantive rights. Rules of
procedure of special courts
and quasi-judicial bodies shall
remain effective unless
disapproved by the Supreme
Court.
The rule making power of this Court was expanded. This
Court for the first time was given the power to promulgate
rules concerning the protection and enforcement of
constitutional rights. The Court was also granted for the first
time the power to disapprove rules of procedure of special
courts and quasi-judicial bodies. But most importantly, the
1987 Constitution took away the power of Congress to
repeal, alter, or supplement rules concerning pleading,
practice and procedure. In fine, the power to promulgate
rules of pleading, practice and procedure is no longer shared
by this Court with Congress, more so with the Executive.
The separation of powers among the three co-equal
branches of our government has erected an impregnable
wall that keeps the power to promulgate rules of pleading,
practice and procedure within the sole province of this
Court. The other branches trespass upon this prerogative if
 they enact laws or issue orders that effectively repeal, alter
or modify any of the procedural rules promulgated by this
Court.Viewed from this perspective, the claim of a legislative
grant of exemption from the payment of legal fees under
Section 39 of RA 8291 necessarily fails.
With the foregoing categorical pronouncement of the Court, it is clear that NPC
can no longer invoke Republic Act No. 6395 (NPC Charter), as amended by Presidential
Decree No. 938, as its basis for exemption from the payment of legal fees.
WHEREFORE, it is hereby CLARIFIED that the National Power Corporation is
not exempt from the payment of legal fees.
SO ORDERED.
G.R. Nos. 175277 & 175285 September 11, 2013
UNICAPITAL, INC., UNICAPITAL REALTY, INC., and JAIME J. MARTINEZ,
Petitioners,
vs.
RAFAEL JOSE CONSING, JR., and THE PRESIDING JUDGE OF THE REGIONAL
TRIAL COURT OF PASIG CITY, BRANCH 168, Respondents.
x-----------------------x
G.R. No. 192073
RAFAEL JOSE CONSING, JR., Petitioner,
vs.
HON. MARISSA MACARAIG-GUILLEN, in her capacity as the Presiding Judge of
the Regional Trial Court of Makati City, Branch 60 and UNICAPITAL, INC.,
Respondents.
DECISION
PERLAS-BERNABE, J.:
Before the Court are consolidated petitions for review on certiorari1 assailing separate
issuances of the Court of Appeals (CA) as follows:
(a) The petitions in G.R. Nos. 175277 and 175285 filed by Unicapital, Inc., (Unicapital),
Unicapital Realty, Inc. (URI), and Unicapital Director and Treasurer Jaime J. Martirez
(Martirez)assail the CA’s Joint Decision2 dated October 20, 2005 and Resolution3 dated
October 25, 2006 in CA-G.R. SP Nos. 64019and 64451 which affirmed the Resolution4
dated September 14,1999 and Order5 dated February 15, 2001 of the Regional Trial
Court (RTC) of Pasig City, Branch 68 (RTC-Pasig City) in SCA No. 1759, upholding the
denial of their motion to dismiss; and
(b) The petition in G.R. No. 192073 filed by Rafael Jose Consing, Jr. (Consing, Jr.) assails
the CA’s Decision6 dated September 30, 2009 and Resolution7 dated April 28, 2010
inCA-G.R. SP No. 101355 which affirmed the Orders dated July16, 20078 and
September 4, 20079 of the RTC of Makati City, Branch 60 (RTC-Makati City) in Civil
Case No. 99-1418,upholding the denial of his motion for consolidation.
The Facts
In 1997, Consing, Jr., an investment banker, and his mother, Cecilia Dela Cruz (Dela
Cruz), obtained an ₱18,000,000.00 loan from Unicapital,₱12,000,000.00 of which was
acquired on July 24, 1997 and the remaining₱6,000,000.00 on August 1, 1997. The said
loan was secured by Promissory Notes10 and a Real Estate Mortgage11 over a 42,443
square meter-parcel of land located at Imus, Cavite, registered in the name of Dela Cruz
as per Transfer Certificate of Title (TCT) No. T-687599 (subject property).12 Prior to
these transactions, Plus Builders, Inc. (PBI), a real estate company, was already
interested to develop the subject property into a residential subdivision.13 In this regard,
PBI entered into a joint venture agreement with Unicapital, through its real estate
development arm, URI. In view of the foregoing, the loan and mortgage over the subject
property was later on modified into an Option to Buy Real Property14 and, after further
negotiations, Dela Cruz decided to sell the same to Unicapital and PBI. For this purpose,
Dela Cruz appointed Consing, Jr. as her attorney-in-fact.15
Eventually, Unicapital, through URI, purchased one-half of the subject property for a
consideration of ₱21,221,500.00 (against which Dela Cruz’s outstanding loan obligations
were first offset), while PBI bought the remaining half for the price of ₱21,047,000.00.16
In this relation, Dela Cruz caused TCT No. T-687599 to be divided into three separate
titles as follows: (a) TCT No. T-851861 for URI;17 (b) TCT No. T-851862 for PBI;18 and
(c)TCT No. T-51863 which was designated as a road lot.19 However, even before URI
and PBI were able to have the titles transferred to their names, Juanito Tan Teng (Teng)
and Po Willie Yu (Yu) informed Unicapital that they are the lawful owners of the subject
property as evidenced by TCT No.T-114708;20 that they did not sell the subject property;
and that Dela Cruz’s title, i.e., TCT No. T-687599, thereto was a mere forgery.21
Prompted by Teng and Yu’s assertions, PBI conducted further investigations on the
subject property which later revealed that Dela Cruz's title was actually of dubious origin.
Based on this finding, PBI and Unicapital sent separate demand letters22 to Dela Cruz
and Consing, Jr., seeking the return of the purchase price they had paid for the subject
property.
From the above-stated incidents stemmed the present controversies as detailed
hereunder.
The Proceedings Antecedent to G.R. Nos. 175277 & 175285
On May 3, 1999, Consing, Jr. filed a complaint, denominated as a Complex Action for
Declaratory Relief23 and later amended to Complex Action for Injunctive Relief24
(Consing, Jr.’s complaint) before the RTC-Pasig City against Unicapital, URI, PBI,
Martirez, PBI General Manager Mariano Martinez (Martinez), Dela Cruz and Does 1-20,
docketed as SCA No. 1759. In his complaint, Consing, Jr. claimed that the incessant
demands/recovery efforts made upon him by Unicapital and PBI to return to them the
purchase price they had paid for the subject property constituted harassment and
oppression which severely affected his personal and professional life.25 He also averred
that he was coerced to commit a violation of Batas Pambansa Blg. 2226 as Unicapital
and PBI, over threats of filing acase against him, kept on forcing him to issue a post-
dated check in the amount sought to be recovered, notwithstanding their knowledge that
he had no funds for the same.27 He further alleged that Unicapital and URI required him
to sign blank deeds of sale and transfers without cancelling the old one sin violation of
the laws on land registration and real estate development.28 Likewise, Consing, Jr.
added that Unicapital and PBI’s representatives were" speaking of him in a manner that
was inappropriate and libelous,"29 and that some John Does "deliberately engaged in a
fraudulent scheme to compromise Consing, Jr.’s honor, integrity and fortune x x x
consisting of falsifying or causing to be falsified, or attempting to present as falsified
certain transfers of Land Titles and Deeds for profit,"30 classifying the foregoing as ultra
vires acts which should warrant sanctions under the corporation law, Revised Securities
Act and related laws.31 Accordingly, Consing, Jr. prayed that: (a) he be declared as a
mere agent of Dela Cruz, and as such, devoid of any obligation to Unicapital, URI, and
PBI for the transactions entered into concerning the subject property; (b) Unicapital, URI,
and PBI be enjoined from harassing or coercing him, and from speaking about him in a
derogatory fashion; and (c) Unicapital, URI, and PBI pay him actual and consequential
damages in the amount of ₱2,000,000.00, moral damages of at least ₱1,000,000.00,
exemplary damages of ₱1,000,000.00, all per month, reckoned from May 1, 1999 and
until the controversy is resolved, and attorney's fees and costs of suit.32
For their part, Unicapital, URI, and Martirez (Unicapital, et al.) filed separate Motions to
Dismiss33 Consing, Jr.’s complaint (Unicapital, et al.’s motion to dismiss) on the ground
of failure to state a cause of action, considering that: (a) no document was attached
against which Consing, Jr. supposedly derived his right and against which his rights may
be as certained; (b) the demands to pay against Consing, Jr. and for him to tender post-
dated checks to cover the amount due were well within the rights of Unicapital as an
unpaid creditor, as Consing, Jr. had already admitted his dealings with them; (c) the
utterances purportedly constituting libel were not set out in the complaint; and (d) the
laws supposedly violated were not properly identified. Moreover, Unicapital, et al. posited
that the RTC-PasigCity did not acquire jurisdiction over the case given that Consing, Jr.
failed to pay the proper amount of docket fees. In the same vein, they maintained that
the RTC-Pasig City had no jurisdiction over their supposed violations of the Corporation
Code and Revised Securities Act, which, discounting its merits, should have been
supposedly lodged with the Securities and Exchange Commission. Finally, they pointed
out that Consing, Jr.’s complaint suffers from a defective verification and, thus,
dismissible.34
Similar to Unicapital et al.’s course of action, PBI and its General Manager, Martinez
(Unicapital and PBI, et al.), sought the dismissal of Consing, Jr.’s complaint on the ground
that it does not state a cause of action. They also denied having singled out Consing, Jr.
because their collection efforts were directed at both Consing, Jr. and Dela Cruz, which
should be deemed as valid and, therefore, should not be restrained.35
On September 14, 1999, the RTC-Pasig City issued a Resolution36 denying the above
mentioned motions to dismiss, holding that Consing, Jr.’s complaint sufficiently stated a
cause of action for tort and damages pursuant to Article 19 of the Civil Code. It ruled that
where there is abusive behavior, a complainant, like Consing, Jr., has the right to seek
refuge from the courts. It also noted that the elements of libel in a criminal case are not
the same as those for a civil action founded on the provisions of the Civil Code, and
therefore, necessitates a different treatment. It equally refused to dismiss the action on
the ground of non-payment of docket fees, despite Consing, Jr.’s escalated claims for
damages therein, as jurisdiction was already vested in it upon the filing of the original
complaint. Moreover, it resolved to apply the liberal construction rule as regards the
subject complaint’s verification and certification, despite its improper wording,
considering further that such defect was not raised at the first opportunity. Consequently,
it ordered Unicapital and PBI, et al. to file their Answer and, in addition, to submit" any
Comment or Reaction within five (5) days from receipt hereof on the allegations of
Consing, Jr. in his rejoinder of September 9, 1999regarding the supposed filing of an
identical case in Makati City,"37 i.e., Civil Case No. 99-1418. Unperturbed, Unicapital
and PBI, et al. moved for reconsideration therefrom which was, however, denied by the
RTC-Pasig City in an Order38 dated February 15, 2001 for lack of merit. Aggrieved, they
elevated the denial of their motions to dismiss before the CA via a petition for certiorari
and prohibition,39 docketed as CA-G.R. SP Nos. 64019 and 64451.
On October 20, 2005, the CA rendered a Joint Decision40 holding that no grave abuse
of discretion was committed by the RTC-Pasig City in refusing to dismiss Consing, Jr.'s
complaint.1âwphi1 At the outset, it ruled that while the payment of the prescribed docket
fee is a jurisdictional requirement, its non-payment will not automatically cause the
dismissal of the case. In this regard, it considered that should there be any deficiency in
the payment of such fees, the same shall constitute a lien on the judgment award.41 It
also refused to dismiss the complaint for lack of proper verification upon a finding that
the copy of the amended complaint submitted to the RTC-Pasig City was properly
notarized.42 Moreover, it upheld the order of the RTC-Pasig City for Unicapital and PBI,
et al. to submit their comment due to the alleged existence of a similar case filed before
the RTC-Makati City.43
Anent the substantive issues of the case, the CA concurred with the RTC-Pasig City that
Consing Jr.'s complaint states a cause of action. It found that Unicapital and PBI, et al.’s
purportedly abusive manner in enforcing their claims against Consing, Jr. was properly
constitutive of a cause of action as the same, if sufficiently proven, would have subjected
him to "defamation of his name in business circles, the threats and coercion against him
to reimburse the purchase price, fraud and falsification and breach of fiduciary
obligation." It also found that the fact that Consing Jr.'s complaint contains "nebulous"
allegations will not warrant its dismissal as any vagueness therein can be clarified
through a motion for a bill of particulars."44 Furthermore, it noted that Consing, Jr. does
not seek to recover his claims against any particular provision of the corporation code or
the securities act but against the actions of Unicapital and PBI, et al.; hence, Consing,
Jr.’s complaint was principally one for damages over which the RTC has jurisdiction, and,
in turn, there lies no misjoinder of causes of action.45
Dissatisfied, only Unicapital, et al. sought reconsideration therefrom but the same was
denied by the CA in a Resolution46 dated October 25,2006. Hence, the present petitions
for review on certiorari in G.R. Nos.175277 and 175285.
The Proceedings Antecedent to G.R. No. 192073
On the other hand, on August 4, 1999, Unicapital filed a complaint47 for sum of money
with damages against Consing, Jr. and Dela Cruz before the RTC-Makati City, docketed
as Civil Case No. 99-1418, seeking to recover (a) the amount of ₱42,195,397.16,
representing the value of their indebtedness based on the Promissory Notes (subject
promissory notes) plus interests; (b) ₱5,000,000.00 as exemplary damages; (c)
attorney's fees; and (d) costs of suit.48
PBI also filed a complaint for damages and attachment against Consing, Jr. and Dela
Cruz before the RTC of Manila, Branch 12, docketed as Civil Case No. 99-95381, also
predicated on the same set of facts as above narrated.49 In its complaint, PBI prayed
that it be allowed to recover the following: (a) ₱13,369,641.79, representing the total
amount of installment payments made as actual damages plus interests; (b) ₱200,000.00
as exemplary damages; (c) ₱200,000.00 as moral damages; (d) attorney's fees; and (e)
costs of suit.50 Civil Case No. 99-95381 was subsequently consolidated with SCA No.
1759 pending before the RTC-Pasig City.51
For his part, Consing, Jr. filed a Motion to Dismiss Civil Case No. 99-1418 which was,
however, denied by the RTC-Makati City in an Order52 dated November 16, 1999.
Thereafter, he filed a Motion for Consolidation53 (motion for consolidation) of Civil Case
No. 99-1418 with his own initiated SCA No. 1759 pending before the RTC-Pasig City.
In an Order54 dated July 16, 2007, the RTC-Makati City dismissed Consing, Jr.’s motion
for consolidation and, in so doing, ruled that the cases sought to be consolidated had no
identity of rights or causes of action and the reliefs sought for by Consing, Jr. from the
RTC-Pasig City will not bar Unicapital from pursuing its money claims against him.
Moreover, the RTC-Makati City noted that Consing, Jr. filed his motion only as an after
thought as it was made after the mediation proceedings between him and Unicapital
failed. Consing, Jr.'s motion for reconsideration therefrom was denied in an Order55
dated September 4, 2007. Hence, he filed a petition for certiorari before the CA, docketed
as CA-G.R. SP No. 101355, ascribing grave abuse of discretion on the part of the RTC-
Makati City in refusing to consolidate Civil Case No. 99-1418 with SCA No. 1759 in Pasig
City.
On September 30, 2009, the CA rendered a Decision56 sustaining the Orders dated July
16, 2007 and September 4, 2007 of the RTC-Makati City which denied Consing, Jr.’s
motion for consolidation. It held that consolidation is a matter of sound discretion on the
part of the trial court which could be gleaned from the use of the word "may" in Section
1, Rule38 of the Rules of Court. Considering that preliminary steps (such as mediation)
have already been undertaken by the parties in Civil Case No.99-1418 pending before
the RTC-Makati City, its consolidation with SCA No. 1759 pending before the RTC-Pasig
City "would merely result in complications in the work of the latter court or squander the
resources or remedies already utilized in the Makati case."57 Moreover, it noted that the
records of the consolidated Pasig and Manila cases, i.e., SCA No. 1759 and Civil Case
No. 99-95381, respectively, had already been elevated to the Court, that joint
proceedings have been conducted in those cases and that the pre-trial therein had been
terminated as early as October 23, 2007.Therefore, due to these reasons, the
consolidation prayed for would be impracticable and would only cause a procedural faux
pas. Undaunted, Consing, Jr. filed a motion for reconsideration therefrom but was denied
by the CA in a Resolution58 dated April 28, 2010. Hence, the present petition for review
on certiorari in G.R. No. 192073.
The Proceedings Before the Court
After the filing of the foregoing cases, the parties were required to file their respective
comments and replies. Further, considering that G.R. No.192073 (Makati case) involves
the same parties and set of facts with those in G.R. Nos. 175277 & 175285 (Pasig case),
these cases were ordered consolidated per the Court's Resolution59 dated November
17, 2010. On March 9, 2011, the Court resolved to give due course to the instant petitions
and required the parties to submit their respective memoranda.60
The Issues Before the Court
The essential issues in these cases are as follows: (a) in G.R. Nos.175277 and 175285,
whether or not the CA erred in upholding the RTC-Pasig City’s denial of Unicapital, et
al.’s motion to dismiss; and (b) in G.R. No. 192073, whether or not the CA erred in
upholding the RTC-Makati City’s denial of Consing, Jr.’s motion for consolidation.
The Court’s Ruling
A. Propriety of the denial of
Unicapital, et al.’s motion to
dismiss and ancillary issues.
A cause of action is defined as the act or omission by which a party violates a right of
another.61 It is well-settled that the existence of a cause of action is determined by the
allegations in the complaint.62 In this relation, a complaint is said to sufficiently assert a
cause of action if, admitting what appears solely on its face to be correct, the plaintiff
would be entitled to the relief prayed for.63 Thus, if the allegations furnish adequate basis
by which the complaint can be maintained, then the same should not be dismissed,
regardless of the defenses that may be averred by the defendants.64 As edified in the
case of Pioneer Concrete Philippines, Inc. v. Todaro,65 citing Hongkong and Shanghai
Banking Corporation, Limited. v. Catalan66 (HSBC):
The elementary test for failure to state a cause of action is whether the complaint alleges
facts which if true would justify the relief demanded. Stated otherwise, may the court
render a valid judgment upon the facts alleged therein? The inquiry is into the sufficiency,
not the veracity of the material allegations. If the allegations in the complaint furnish
sufficient basis on which it can be maintained, it should not be dismissed regardless of
the defense that may be presented by the defendants.67 (Emphasis supplied)
Stated otherwise, the resolution on this matter should stem from an analysis on whether
or not the complaint is able to convey a cause of action; and not that the complainant has
no cause of action. Lest it be misunderstood, failure to state a cause of action is properly
a ground for a motion to dismiss under Section 1(g), Rule 1668 of the Rules of
Court(Rules), while the latter is not a ground for dismissal under the same rule.
In this case, the Court finds that Consing, Jr.’s complaint in SCA No.1759 properly states
a cause of action since the allegations there insufficiently bear out a case for damages
under Articles 19 and 26 of the Civil Code.
Records disclose that Consing, Jr.’s complaint contains allegations which aim to
demonstrate the abusive manner in which Unicapital and PBI, et al. enforced their
demands against him. Among others, the complaint states that Consing, Jr. "has
constantly been harassed and bothered by Unicapital and PBI, et al.; x x x besieged by
phone calls from them; x x x has had constant meetings with them variously, and on a
continuing basis, such that he is unable to attend to his work as an investment banker."69
In the same pleading, he also alleged that Unicapital and PBI, et al.’s act of "demanding
a postdated check knowing fully well that he does not have the necessary funds to cover
the same, nor is he expecting to have them is equivalent to asking him to commit a crime
under unlawful coercive force."70 Accordingly, these specific allegations, if hypothetically
admitted, may result into the recovery of damages pursuant to Article 19 of the Civil Code
which states that "every person must, in the exercise of his rights and in the performance
of his duties, act with justice, give everyone his due, and observe honesty and good faith."
As explained in the HSBC case:
When a right is exercised in a manner which does not conform with the norms enshrined
in Article 19 and results in damage to another, a legal wrong is thereby committed for
which the wrongdoer must beheld responsible. But a right, though by itself legal because
it is recognized or granted by law as such, may nevertheless become the source of some
illegality. A person should be protected only when he acts in the legitimate exercise of
his right, that is, when he acts with prudence and in good faith; but not when he acts with
negligence or abuse. There is an abuse of right when it is exercised for the only purpose
of prejudicing or injuring another. The exercise of a right must be in accordance with the
purpose for which it was established, and must not be excessive or unduly harsh; there
must be no intention to injure another.71 (Emphasis supplied)
Likewise, Consing, Jr.’s complaint states a cause of action for damages under Article 26
of the Civil Code which provides that:
Article 26. Every person shall respect the dignity, personality, privacy and peace of mind
of his neighbors and other persons. The following and similar acts, though they may not
constitute a criminal offense, shall produce a cause of action for damages, prevention
and other relief:
(1) Prying into the privacy of another's residence;
(2) Meddling with or disturbing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his religious beliefs, lowly station in life,
place of birth, physical defect, or other personal condition.
The rationale therefor was explained in the case of Manaloto v. Veloso III,72 citing
Concepcion v. CA,73 to wit:
The philosophy behind Art. 26 underscores the necessity for its inclusion in our civil law.
The Code Commission stressed in no uncertain terms that the human personality must
be exalted. The sacredness of human personality is a concomitant consideration of every
plan for human amelioration. The touchstone of every system of law, of the culture and
civilization of every country, is how far it dignifies man. If the statutes insufficiently protect
a person from being unjustly humiliated, in short, if human personality is not exalted -
then the laws are indeed defective. Thus, under this article, the rights of persons are
amply protected, and damages are provided for violations of a person's dignity,
personality, privacy and peace of mind.74
To add, a violation of Article 26 of the Civil Code may also lead to the payment of moral
damages under Article 2219(10)75 of the Civil Code.
Records reveal that Consing, Jr., in his complaint, alleged that "he has come to discover
that Unicapital and PBI, et al. are speaking of him in a manner that is inappropriate and
libelous; and that they have spread their virulent version of events in the business and
financial community such that he has suffered and continues to suffer injury upon his
good name and reputation which, after all, is the most sacred and valuable wealth he
possesses - especially considering that he is an investment banker."76 In similar regard,
the hypothetical admission of these allegations may result into the recovery of damages
pursuant to Article 26, and even Article2219(10), of the Civil Code.
Corollary thereto, Unicapital, et al.’s contention77 that the case should be dismissed on
the ground that it failed to set out the actual libelous statements complained about cannot
be given credence. These incidents, as well as the specific circumstances surrounding
the manner in which Unicapital and PBI, et al. pursued their claims against Consing, Jr.
may be better ventilated during trial. It is a standing rule that issues that require the
contravention of the allegations of the complaint, as well as the full ventilation, in effect,
of the main merits of the case, should not be within the province of a mere motion to
dismiss,78 as in this case. Hence, as what is only required is that the allegations furnish
adequate basis by which the complaint can be maintained, the Court – in view of the
above-stated reasons – finds that the RTC-Pasig City’s denial of Unicapital, et al.’s
motion to dismiss on the ground of failure to state a cause of action was not tainted with
grave abuse of discretion which would necessitate the reversal of the CA’s ruling. Verily,
for grave abuse of discretion to exist, the abuse of discretion must be patent and gross
so as to amount to an evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law, or to act at all in contemplation of law.79 This the Court does not
perceive in the case at bar.
Further, so as to obviate any confusion on the matter, the Court equally finds that the
causes of action in SCA No. 1759 were not – as Unicapital, et al. claim – misjoined even
if Consing, Jr. averred that Unicapital and PBI, et al. violated certain provisions of the
Corporation Law and the Revised Securities Act.80
The rule is that a party’s failure to observe the following conditions under Section 5, Rule
2 of the Rules results in a misjoinder of causes of action:81
SEC. 5. Joinder of causes of action . - A party may in one pleading assert, in the
alternative or otherwise, as many causes of action as he may have against an opposing
party, subject to the following conditions:
(a) The party joining the causes of action shall comply with the rules on joinder of parties;
(b) The joinder shall not include special civil actions governed by special rules;
(c) Where the causes of action are between the same parties but pertain to different
venues or jurisdictions, the joinder may be allowed in the Regional Trial Court provided
one of the causes of action falls within the jurisdiction of said court and the venue lies
therein; and
(d) Where the claims in all the causes of action are principally for recovery of money the
aggregate amount claimed shall be the test of jurisdiction. (Emphasis supplied)
A careful perusal of his complaint discloses that Consing, Jr. did not seek to hold
Unicapital and PBI, et al. liable for any specific violation of the Corporation Code or the
Revised Securities Act. Rather, he merely sought damages for Unicapital and PBI, et
al.’s alleged acts of making him sign numerous documents and their use of the same
against him. In this respect, Consing, Jr. actually advances an injunction and damages
case82 which properly falls under the jurisdiction of the RTC-Pasig City.83 Therefore,
there was no violation of Section 5, Rule 2 of the Rules, particularly, paragraph (c)
thereof. Besides, even on the assumption that there was a misjoinder of causes of action,
still, such defect should not result in the dismissal of Consing, Jr.’s complaint. Section 6,
Rule 2 of the Rules explicitly states that a "misjoinder of causes of action is not a ground
for dismissal of an action" and that "a misjoined cause of action may, on motion of a party
or on the initiative of the court, be severed and proceeded with separately."
Neither should Consing, Jr.’s failure to pay the required docket fees lead to the dismissal
of his complaint.1âwphi1 It has long been settled that while the court acquires jurisdiction
over any case only upon the payment of the prescribed docket fees, its non-payment at
the time of the filing of the complaint does not automatically cause the dismissal of the
complaint provided that the fees are paid within a reasonable period.84 Consequently,
Unicapital, et al.’s insistence that the stringent rule on non-payment of docket fees
enunciated in the case of Manchester Development Corporation v. CA85 should be
applied in this case cannot be sustained in the absence of proof that Consing, Jr.
intended to defraud the government by his failure to pay the correct amount of filing fees.
As pronounced in the case of Heirs of Bertuldo Hinog v. Hon. Melicor:86
Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement,
even its
non-payment at the time of filing does not automatically cause the dismissal of the case,
as long as the fee is paid within the applicable prescriptive or reglementary period, more
so when the party involved demonstrates a willingness to abide by the rules prescribing
such payment.
Thus, when insufficient filing fees were initially paid by the plaintiffs and there was no
intention to defraud the government, the Manchester rule does not apply.87 (Emphasis
and italics in the original)
Indeed, while the Court acknowledges Unicapital, et al.'s apprehension that Consing,
Jr.'s "metered" claim for damages to the tune of around ₱2,000,000.00 per month88 may
balloon to a rather huge amount by the time that this case is finally disposed of, still, any
amount that may by then fall due shall be subject to assessment and any additional fees
determined shall constitute as a lien against the judgment as explicitly provided under
Section 2,89 Rule 141 of the Rules.
Finally, on the question of whether or not Consing, Jr.'s complaint was properly verified,
suffice it to state that since the copy submitted to the trial court was duly notarized by one
Atty. Allan B. Gepty and that it was only Unicapital, et al.’s copy which lacks the
notarization, then there was sufficient compliance with the requirements of the rules on
pleadings.90
In fine, the Court finds no reversible error on the part of the CA in sustaining the RTC-
Pasig City’s denial of Unicapital et al.’s motion to dismiss. As such, the petitions in G.R.
Nos. 175277 and 175285 must be denied.
B. Propriety of the denial of
Consing, Jr.’s motion for
consolidation.
The crux of G.R. No. 192073 is the propriety of the RTC-Makati City’s denial of Consing,
Jr.’s motion for the consolidation of the Pasig case, i.e., SCA No. 1759, and the Makati
case, i.e., Civil Case No. 99-1418.Records show that the CA upheld the RTC-Makati
City’s denial of the foregoing motion, finding that the consolidation of these cases was
merely discretionary on the part of the trial court. It added that it was "impracticable and
would cause a procedural faux pas
"if it were to "allow the RTC-Pasig City to preside over the Makati case."91
The CA’s ruling is proper.
It is hornbook principle that when or two or more cases involve the same parties and
affect closely related subject matters, the same must be consolidated and jointly tried, in
order to serve the best interest of the parties and to settle the issues between them
promptly, thus, resulting in a speedy and inexpensive determination of cases. In addition,
consolidation serves the purpose of avoiding the possibility of conflicting decisions
rendered by the courts in two or more cases, which otherwise could be disposed of in a
single suit.92 The governing rule is Section 1, Rule 31 of the Rules which provides:
SEC. 1. Consolidation. - When actions involving a common question of law or fact are
pending before the court, it may order a joint hearing or trial of any or all the matters in
issue in the actions; it may order all the actions consolidated; and it may make such
orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.
In the present case, the Court observes that the subject cases, i.e., SCA No. 1759 and
Civil Case No. 99-1418, although involving the same parties and proceeding from a
similar factual milieu, should remain unconsolidated since they proceed from different
sources of obligations and, hence, would not yield conflicting dispositions. SCA No. 1759
is an injunction and damages case based on the Civil Code provisions on abuse of right
and defamation, while Civil Case No. 99-1418 is a collection and damages suit based on
actionable documents, i.e., the subject promissory notes. In particular, SCA No. 1759
deals with whether or not Unicapital and BPI, et al, abused the manner in which they
demanded payment from Consing, Jr., while Civil Case No. 99-1418 deals with whether
or not Unicapital may demand payment from Consing, Jr. based on the subject
promissory notes. Clearly, a resolution in one case would have no practical effect as the
core issues and reliefs sought in each case are separate and distinct from the other.
Likewise, as the CA correctly pointed out, the RTC-Makati City could not have been
failured in retaining Civil Case No. 99-1418 in its dockets since pre-trial procedures have
already been undertaken therein and, thus, its consolidation with SCA No. 1759 pending
before the RTC-Pasig City would merely result in complications on the part of the latter
court or squander the resources or remedies already utilized in Civil Case No. 99-1418.93
In this light, aside from the perceived improbability of having conflicting decisions, the
consolidation of SCA No. 1759 and Civil Case No. 99-1418 would, contrary to its
objective, only delay the proceedings and entail unnecessary costs.
All told, the Court finds the consolidation of SCA No. 1759 and Civil Case No. 99-1418
to be improper, impelling the affirmance of the CA’s ruling. Consequently, the petition in
G.R. No. 192073 must also be denied.
WHEREFORE, the petitions in G.R. Nos. 175277, 175285 and 192073 are DENIED.
Accordingly, the Court of Appeals’ Joint Decision dated October 20, 2005 and Resolution
dated October 25, 2006 in CA-G.R. SP Nos. 64019 and 64451 and the Decision dated
September 30, 2009 and Resolution dated April 28, 2010 in CA-G.R. No. 101355 are
hereby AFFIRMED. The Makati RTC Clerk of Court assessed the docket fees which BNP paid at
₱352,116.307 which was computed as follows:8

WHEREFORE, the petition is GRANTED in part. The July 25, 2001 Decision and the First Cause of Action $ 844,674.07
December 18, 2001 Resolution of the Court Appeals are hereby MODIFIED. The Clerk Second Cause of Action 171,120.53
of Court of the Regional Trial Court of Makati City is ordered to reassess and determine Third Cause of Action 529,189.80
the docket fees that should be paid by respondent, BNP, in accordance with the Decision
of this Court, and direct respondent to pay the same within fifteen (15) days, provided the $1,544,984.40
applicable prescriptive or reglementary period has not yet expired. Thereafter, the trial 5% as Attorney's Fees $ 77,249.22
court is ordered to proceed with the case with utmost dispatch. TOTAL ………….. $1,622,233.62
Conversion rate to peso x 43_
TOTAL ………….. ₱69,756,000.00
SO ORDERED. (roundoff)
Computation based on Rule 141:

G.R. No. 151242 June 15, 2005

COURT JDF
PROTON PILIPINAS CORPORATION, AUTOMOTIVE PHILIPPINES, ASEA ONE ₱ 69,756,000.00 ₱ 69.606.000.00
CORPORATION and AUTOCORP, Petitioners, - 150,000.00 x .003
vs. 69,606,000.00 208,818.00
BANQUE NATIONALE DE PARIS,1 Respondent. x .002 + 450.00
139,212.00 ₱ 209,268.00
DECISION + 150.00
₱ 139,362.00
CARPIO MORALES, J.: LEGAL : ₱139,362.00
+ 209,268.00
It appears that sometime in 1995, petitioner Proton Pilipinas Corporation (Proton) availed ₱348,630.00 x 1% = ₱3,486.30
of the credit facilities of herein respondent, Banque Nationale de Paris (BNP). To ₱ 139,362.00
guarantee the payment of its obligation, its co-petitioners Automotive Corporation + 209,268.00
Philippines (Automotive), Asea One Corporation (Asea) and Autocorp Group (Autocorp) 3,486.00
executed a corporate guarantee2 to the extent of US$2,000,000.00. BNP and Proton ₱ 352,116.30 - Total fees paid by the plaintiff
subsequently entered into three trust receipt agreements dated June 4, 1996,3 January
14, 1997,4 and April 24, 1997.5 To the complaint, the defendants-herein petitioners filed on October 12, 1998 a Motion
to Dismiss9 on the ground that BNP failed to pay the correct docket fees to thus prevent
Under the terms of the trust receipt agreements, Proton would receive imported the trial court from acquiring jurisdiction over the case.10 As additional ground, petitioners
passenger motor vehicles and hold them in trust for BNP. Proton would be free to sell raised prematurity of the complaint, BNP not having priorly sent any demand letter.11
the vehicles subject to the condition that it would deliver the proceeds of the sale to BNP,
to be applied to its obligations to it. In case the vehicles are not sold, Proton would return By Order12 of August 3, 1999, Branch 148 of the Makati RTC denied petitioners' Motion
them to BNP, together with all the accompanying documents of title. to Dismiss, viz:

Allegedly, Proton failed to deliver the proceeds of the sale and return the unsold motor
vehicles.
Pursuant to the corporate guarantee, BNP demanded from Automotive, Asea and
Autocorp the payment of the amount of US$1,544,984.406 representing Proton's total
outstanding obligations. These guarantors refused to pay, however. Hence, BNP filed on
September 7, 1998 before the Makati Regional Trial Court (RTC) a complaint against
petitioners praying that they be ordered to pay (1) US$1,544,984.40 plus accrued interest
and other related charges thereon subsequent to August 15, 1998 until fully paid and (2)
an amount equivalent to 5% of all sums due from petitioners as attorney's fees.
Resolving the first ground relied upon by the defendant, this court believes and so hold
that the docket fees were properly paid. It is the Office of the Clerk of Court of this station
that computes the correct docket fees, and it is their duty to assess the docket fees
correctly, which they did.1avvphi1.zw+
Even granting arguendo that the docket fees were not properly paid, the court cannot just
dismiss the case. The Court has not yet ordered (and it will not in this case) to pay the
correct docket fees, thus the Motion to dismiss is premature, aside from being without
any legal basis.
As held in the case of National Steel Corporation vs. CA, G.R. No. 123215, February 2,
1999, the Supreme Court said:
xxx
Although the payment of the proper docket fees is a jurisdictional requirement, the trial
court may allow the plaintiff in an action to pay the same within a reasonable time within
the expiration of applicable prescription or reglementary period. If the plaintiff fails to
comply with this requirement, the defendant should timely raise the issue of jurisdiction
or else he would be considered in estoppel. In the latter case, the balance between
appropriate docket fees and the amount actually paid by the plaintiff will be considered a
lien or (sic) any award he may obtain in his favor.
As to the second ground relied upon by the defendants, in that a review of all annexes to
the complaint of the plaintiff reveals that there is not a single formal demand letter for
defendants to fulfill the terms and conditions of the three (3) trust agreements.
In this regard, the court cannot sustain the submission of defendant. As correctly pointed
out by the plaintiff, failure to make a formal demand for the debtor to pay the plaintiff is
not among the legal grounds for the dismissal of the case. Anyway, in the appreciation
of the court, this is simply evidentiary.
xxx
WHEREFORE, for lack of merit, the Motion to Dismiss interposed by the defendants is
hereby DENIED.13 (Underscoring supplied)
Petitioners filed a motion for reconsideration14 of the denial of their Motion to Dismiss,
but it was denied by the trial court by Order15 of October 3, 2000.
Petitioners thereupon brought the case on certiorari and mandamus16 to the Court of
Appeals which, by Decision17 of July 25, 2001, denied it in this wise:
… Section 7(a) of Rule 141 of the Rules of Court excludes interest accruing from the
principal amount being claimed in the pleading in the computation of the prescribed filing
fees. The complaint was submitted for the computation of the filing fee to the Office of
the Clerk of Court of the Regional Trial Court of Makati City which made an assessment
that respondent paid accordingly. What the Office of the Clerk of Court did and the ruling
of the respondent Judge find support in the decisions of the Supreme Court in Ng Soon
vs. Alday and Tacay vs. RTC of Tagum, Davao del Norte. In the latter case, the Supreme
Court explicitly ruled that "where the action is purely for recovery of money or damages,
the docket fees are assessed on the basis of the aggregate amount claimed, exclusive
only of interests and costs."
Assuming arguendo that the correct filing fees was not made, the rule is that the court
may allow a reasonable time for the payment of the prescribed fees, or the balance
thereof, and upon such payment, the defect is cured and the court may properly take
cognizance of the action unless in the meantime prescription has set in and consequently
barred the right of action. Here respondent Judge did not make any finding, and rightly
so, that the filing fee paid by private respondent was insufficient.
On the issue of the correct dollar-peso rate of exchange, the Office of the Clerk of Court
of the RTC of Makati pegged it at ₱ 43.21 to US$1. In the absence of any office guide of
the rate of exchange which said court functionary was duty bound to follow, the rate he
applied is presumptively correct.
Respondent Judge correctly ruled that the matter of demand letter is evidentiary and
does not form part of the required allegations in a complaint. Section 1, Rule 8 of the
1997 Rules of Civil Procedure pertinently provides:
"Every pleading shall contain in a methodical and logical form, a plain, concise and direct
statement of the ultimate facts on which the party pleading relies for his claim or defense,
as the case may be, omitted the statement of mere evidentiary facts."
Judging from the allegations of the complaint particularly paragraphs 6, 12, 18, and 23
where allegations of imputed demands were made upon the defendants to fulfill their
respective obligations, annexing the demand letters for the purpose of putting up a
sufficient cause of action is not required.
In fine, respondent Judge committed no grave abuse of discretion amounting to lack or
excess of jurisdiction to warrant certiorari and mandamus.18 (Underscoring supplied)
Their Motion for Reconsideration19 having been denied by the Court of Appeals,20
petitioners filed the present petition for review on certiorari21 and pray for the following
reliefs:
WHEREFORE, in view of all the foregoing, it is most respectfully prayed of this Honorable
Court to grant the instant petition by REVERSING and SETTING ASIDE the questioned
Decision of July 25, 2001 and the Resolution of December 18, 2001 for being contrary to
law, to Administrative Circular No. 11-94 and Circular No. 7 and instead direct the court
a quo to require Private Respondent Banque to pay the correct docket fee pursuant to
the correct exchange rate of the dollar to the peso on September 7, 1998 and to quantify
its claims for interests on the principal obligations in the first, second and third causes of
actions in its Complaint in Civil Case No. 98-2180.22 (Underscoring supplied)
Citing Administrative Circular No. 11-94,23 petitioners argue that BNP failed to pay the
correct docket fees as the said circular provides that in the assessment thereof, interest
claimed should be included. There being an underpayment of the docket fees, petitioners
conclude, the trial court did not acquire jurisdiction over the case.
Additionally, petitioners point out that the clerk of court, in converting BNP's claims from
US dollars to Philippine pesos, applied the wrong exchange rate of US $1 = ₱43.00, the
exchange rate on September 7, 1998 when the complaint was filed having been pegged
at US $1 = ₱43.21. Thus, by petitioners' computation, BNP's claim as of August 15, 1998
was actually ₱70,096,714.72,24 not ₱69,756,045.66.
Furthermore, petitioners submit that pursuant to Supreme Court Circular No. 7,25 the
complaint should have been dismissed for failure to specify the amount of interest in the
prayer.
Circular No. 7 reads:
TO: JUDGES AND CLERKS OF COURT OF THE COURT OF TAX APPEALS,
REGIONAL TRIAL COURTS, METROPOLITAN TRIAL COURTS IN CITIES,
MUNICIPAL TRIAL COURTS, MUNICIPAL CIRCUIT TRIAL COURTS, SHARI'A
DISTRICT COURTS;AND THE INTEGRATED BAR OF THE PHILIPPINES
SUBJECT: ALL COMPLAINTS MUST SPECIFY AMOUNT OF DAMAGES SOUGHT
NOT ONLY IN THE BODY OF THE PLEADING, BUT ALSO IN THE PRAYER IN ORDER
TO BE ACCEPTED AND ADMITTED FOR FILING. THE AMOUNT OF DAMAGES SO
SPECIFIED IN THE COMPLAINT SHALL BE THE BASIS FOR ASSESSING THE
AMOUNT OF THE FILING FEES.
In Manchester Development Corporation vs. Court of Appeals, No. L-75919, May 7,
1987, 149 SCRA 562, this Court condemned the practice of counsel who in filing the
original complaint omitted from the prayer any specification of the amount of damages
although the amount of over P78 million is alleged in the body of the complaint. This
Court observed that "(T)his 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. xxx"
For the guidance of all concerned, the WARNING given by the court in the afore-cited
case is reproduced hereunder:
"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 be 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 amount
sought in the amended pleading. The ruling in the Magaspi case (115 SCRA 193) in so
far as it is inconsistent with this pronouncement is overturned and reversed."
Strict compliance with this Circular is hereby enjoined.
Let this be circularized to all the courts hereinabove named and to the President and
Board of Governors of the Integrated Bar of the Philippines, which is hereby directed to
disseminate this Circular to all its members.
March 24, 1988.
(Sgd). CLAUDIO TEEHANKEE
Chief Justice
(Emphasis and underscoring supplied)
On the other hand, respondent maintains that it had paid the filing fee which was
assessed by the clerk of court, and that there was no violation of Supreme Court Circular
No. 7 because the amount of damages was clearly specified in the prayer, to wit:
2. On the FIRST CAUSE OF ACTION -
(c) Defendant PROTON be ordered to pay the sum of (i) US DOLLARS EIGHT
HUNDRED FORTY FOUR THOUSAND SIX HUNDRED SEVENTY FOUR AND SEVEN
CENTS (US$ 844,674.07), plus accrued interests and other related charges thereon
subsequent to August 15, 1998, until fully paid; and (ii) an amount equivalent to 5% of all
sums due from said Defendant, as and for attorney's fees;
3. On the SECOND CAUSE OF ACTION -
(d) Defendant PROTON be ordered to pay the sum of (i) US DOLLARS ONE HUNDRED
TWENTY AND FIFTY THREE CENTS (US$171,120.53), plus accrued interests and
other related charges thereon subsequent to August 15, 1998 until fully paid; and (ii) an
amount equivalent to 5% of all sums due from said Defendant, as and for attorney's fees;
4. On the THIRD CAUSE OF ACTION -
(e) Defendant PROTON be ordered to pay the sum of (i) US DOLLARS FIVE HUNDRED
TWENTY NINE THOUSAND ONE HUNDRED EIGHTY NINE AND EIGHTY CENTS
(US$529,189.80), plus accrued interests and other related charges thereon subsequent
to August 15, 1998 until fully paid; and (ii) an amount equivalent to 5% or all sums due
from said Defendant, as and for attorney's fees;
5. On ALL THE CAUSES OF ACTION -
Defendants AUTOMOTIVE CORPORATION PHILIPPINES, ASEA ONE
CORPORATION and AUTOCORP GROUP to be ordered to pay Plaintiff BNP the
aggregate sum of (i) US DOLLARS ONE MILLION FIVE HUNDRED FORTY FOUR
THOUSAND NINE HUNDRED EIGHTY FOUR AND FORTY CENTS (US$1,544,984.40)
(First through Third Causes of Action), plus accrued interest and other related charges
thereon subsequent to August 15, 1998 until fully paid; and (ii) an amount equivalent to
5% of all sums due from said Defendants, as and for attorney's fees.26
Moreover, respondent posits that the amount of US$1,544,984.40 represents not only
the principal but also interest and other related charges which had accrued as of August
15, 1998. Respondent goes even further by suggesting that in light of Tacay v. Regional
Trial Court of Tagum, Davao del Norte27 where the Supreme Court held,
Where the action is purely for the recovery of money or damages, the docket fees are
assessed on the basis of the aggregate amount claimed, exclusive only of interests and
costs.28 (Emphasis and underscoring supplied),
it made an overpayment.
When Tacay was decided in 1989, the pertinent rule applicable was Section 5 (a) of Rule
141 which provided for the following:
SEC. 5. Clerks of Regional Trial Courts. - (a) For filing an action or proceeding, or a
permissive counter-claim or cross-claim not arising out of the same transaction subject Sec. 8. Clerks of Metropolitan and Municipal Trial Courts
of the complaint, a third-party complaint and a complaint in intervention and for all
services in the same, if the sum claimed, exclusive of interest, of the value of the property (a) For each civil action or proceeding, where the value of the subject matter involved, or
in litigation, or the value of the estate, is: the amount of the demand, inclusive of interest, damages or whatever kind, attorney's
fees, litigation expenses, and costs, is:
1. Less than ₱ 5,000.00 ….……………………………… ₱ 32.00
2. ₱ 5,000.00 or more but less than ₱ 10,000.00 ………… 48.00 1. Not more than ₱ 20,000.00 …………………………… ... ₱ 120.00
3. ₱ 10,000.00 or more but less than ₱ 20,000.00 ……….. 64.00 2. More than ₱ 20,000.00 but not more than ₱ 100,000.00 …. 400.00
4. ₱ 20,000.00 or more but less than ₱ 40,000.00 ……….. 80.00 3. More than ₱ 100,000.00 but not more than ₱ 200,000.00 … 850.00
5. ₱ 40,000.00 or more but less than ₱ 60,000.00 ……….. 120.00 (Emphasis and underscoring supplied)
6. ₱ 60,000.00 or more but less than ₱ 80,000.00 ………. 160.00
7. ₱ 80,000.00 or more but less than ₱ 150,000.00 ……… 200.00 The clerk of court should thus have assessed the filing fee by taking into consideration
8. And for each ₱ 1,000.00 in excess of ₱ 150,000.00 ..... 4.00 "the total sum claimed, inclusive of interest, damages of whatever kind, attorney's fees,
9. When the value of the case cannot be estimated ……… 400.00 litigation expenses, and costs, or the stated value of the property in litigation."
10. When the case does not concern property Respondent's and the Court of Appeals' reliance then on Tacay was not in order.
(naturalization, adoption, legal separation, etc.) ..……... 64.00
11. In forcible entry and illegal detainer cases Neither was, for the same reason, the Court of Appeals' reliance on the 1989 case of Ng
appealed from inferior courts …………………………………. 40.00 Soon v. Alday,30 where this Court held:
If the case concerns real estate, the assessed value thereof shall be considered in
computing the fees. …The failure to state the rate of interest demanded was not fatal not only because it is
the Courts which ultimately fix the same, but also because Rule 141, Section 5(a) of the
In case the value of the property or estate or the sum claim is less or more in accordance Rules of Court, itemizing the filing fees, speaks of "the sum claimed, exclusive of
with the appraisal of the court, the difference of fees shall be refunded or paid as the interest." This clearly implies that the specification of the interest rate is not that
case may be. indispensable.

When the complaint in this case was filed in 1998, however, as correctly pointed out by Factually, therefore, not everything was left to "guesswork" as respondent Judge has
petitioners, Rule 141 had been amended by Administrative Circular No. 11-9429 which opined. The sums claimed were ascertainable, sufficient enough to allow a computation
provides: pursuant to Rule 141, section 5(a).

BY RESOLUTION OF THE COURT, DATED JUNE 28, 1994, PURSUANT TO SECTION Furthermore, contrary to the position taken by respondent Judge, the amounts claimed
5 (5) OF ARTICLE VIII OF THE CONSTITUTION, RULE 141, SECTION 7 (a) AND (d), need not be initially stated with mathematical precision. The same Rule 141, section 5(a)
and SECTION 8 (a) and (b) OF THE RULES OF COURT ARE HEREBY AMENDED TO (3rd paragraph), allows an appraisal "more or less."31 Thus:
READ AS FOLLOWS:
"In case the value of the property or estate or the sum claimed is less or more in
RULE 141 accordance with the appraisal of the court, the difference of fee shall be refunded or paid
LEGAL FEES as the case may be."

xxx In other words, a final determination is still to be made by the Court, and the fees
ultimately found to be payable will either be additionally paid by the party concerned or
Sec. 7. Clerks of Regional Trial Courts refunded to him, as the case may be. The above provision clearly allows an initial
payment of the filing fees corresponding to the estimated amount of the claim subject to
(a) For filing an action or a permissive counterclaim or money claim against an estate not adjustment as to what later may be proved.
based on judgment, or for filing with leave of court a third-party, fourth-party, etc.
complaint, or a complaint in intervention, and for all clerical services in the same, if the ". . . there is merit in petitioner's claim that the third paragraph of Rule 141, Section 5(a)
total sum claimed, inclusive of interest, damages of whatever kind, attorney's fees, clearly contemplates a situation where an amount is alleged or claimed in the complaint
litigation expenses, and costs, or the stated value of the property in litigation, is: but is less or more than what is later proved. If what is proved is less than what was
claimed, then a refund will be made; if more, additional fees will be exacted. Otherwise
1. Not more than ₱ 100,000.00 …………………………… ₱ 400.00 stated, what is subject to adjustment is the difference in the fee and not the whole
2. ₱ 100,000.00, or more but not more than ₱ 150,000.00 … 600.00 amount" (Pilipinas Shell Petroleum Corp., et als., vs. Court of Appeals, et als., G.R. No.
3. For each ₱ 1,000.00 in excess of ₱ 150,000.00 …………. 5.00 76119, April 10, 1989).32 (Emphasis and underscoring supplied)
xxx
Respecting the Court of Appeals' conclusion that the clerk of court did not err when he
applied the exchange rate of US $1 = ₱43.00 "[i]n the absence of any office guide of the
rate of exchange which said court functionary was duty bound to follow,[hence,] the rate
he applied is presumptively correct," the same does not lie. The presumption of regularity
of the clerk of court's application of the exchange rate is not conclusive.33 It is
disputable.34 As such, the presumption may be overturned by the requisite rebutting
evidence.35 In the case at bar, petitioners have adequately proven with documentary
evidence36 that the exchange rate when the complaint was filed on September 7, 1998
was US $1 = ₱43.21.
In fine, the docket fees paid by respondent were insufficient.
With respect to petitioner's argument that the trial court did not acquire jurisdiction over
the case in light of the insufficient docket fees, the same does not lie.
True, in Manchester Development Corporation v. Court of Appeals,37 this Court held that
the court acquires jurisdiction over any case only upon the payment of the prescribed
docket fees,38 hence, it concluded that the trial court did not acquire jurisdiction over the
case.
It bears emphasis, however, that the ruling in Manchester was clarified in Sun Insurance
Office, Ltd. (SIOL) v. Asuncion39 when this Court held that in the former there was clearly
an effort to defraud the government in avoiding to pay the correct docket fees, whereas
in the latter the plaintiff demonstrated his willingness to abide by paying the additional
fees as required.
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.40 (Emphasis and
underscoring supplied)
The ruling in Sun Insurance Office was echoed in the 2005 case of Heirs of Bertuldo
Hinog v. Hon. Achilles Melicor:41
Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement,
even its non-payment at the time of filing does not automatically cause the dismissal of
the case, as long as the fee is paid within the applicable prescriptive or reglementary
period, more so when the party involved demonstrates a willingness to abide by the rules
prescribing such payment. Thus, when insufficient filing fees were initially paid by the
plaintiffs and there was no intention to defraud the government, the Manchester rule does
not apply. (Emphasis and underscoring supplied; citations omitted)
In the case at bar, respondent merely relied on the assessment made by the clerk of
court which turned out to be incorrect. Under the circumstances, the clerk of court has
the responsibility of reassessing what respondent must pay within the prescriptive period,
failing which the complaint merits dismissal.
Parenthetically, in the complaint, respondent prayed for "accrued interest… subsequent
to August 15, 1998 until fully paid." The complaint having been filed on September 7,
1998, respondent's claim includes the interest from August 16, 1998 until such date of
filing.
Respondent did not, however, pay the filing fee corresponding to its claim for interest
from August 16, 1998 until the filing of the complaint on September 7, 1998. As priorly
discussed, this is required under Rule 141, as amended by Administrative Circular No.
11-94, which was the rule applicable at the time. Thus, as the complaint currently stands,
respondent cannot claim the interest from August 16, 1998 until September 7, 1998,
unless respondent is allowed by motion to amend its complaint within a reasonable time
and specify the precise amount of interest petitioners owe from August 16, 1998 to
September 7, 199842 and pay the corresponding docket fee therefor.
With respect to the interest accruing after the filing of the complaint, the same can only
be determined after a final judgment has been handed down. Respondent cannot thus
be made to pay the corresponding docket fee therefor. Pursuant, however, to Section 2,
Rule 141, as amended by Administrative Circular No. 11-94, respondent should be made
to pay additional fees which shall constitute a lien in the event the trial court adjudges
that it is entitled to interest accruing after the filing of the complaint.
Sec. 2. Fees as lien. - Where the court in its final judgment awards a claim not alleged,
or a relief different or more than that claimed in the pleading, the party concerned shall
pay the additional fees which shall constitute a lien on the judgment in satisfaction of said
lien. The clerk of court shall assess and collect the corresponding fees.
In Ayala Corporation v. Madayag,43 in interpreting the third rule laid down in Sun
Insurance regarding awards of claims not specified in the pleading, this Court held that
the same refers only to damages arising after the filing of the complaint or similar pleading
as to which the additional filing fee therefor shall constitute a lien on the judgment.
… The amount of any claim for damages, therefore, arising on or before the filing of the
complaint or any pleading should be specified. While it is true that the determination of
certain damages as exemplary or corrective damages is left to the sound discretion of
the court, it is the duty of the parties claiming such damages to specify the amount sought
on the basis of which the court may make a proper determination, and for the proper
assessment of the appropriate docket fees. The exception contemplated as to claims not
specified or to claims although specified are left for determination of the court is limited
only to any damages that may arise after the filing of the complaint or similar pleading for
then it will not be possible for the claimant to specify nor speculate as to the amount
thereof.44 (Emphasis and underscoring supplied; citation omitted)1avvphi1.zw+
WHEREFORE, the petition is GRANTED in part. The July 25, 2001 Decision and the
December 18, 2001 Resolution of the Court Appeals are hereby MODIFIED. The Clerk
of Court of the Regional Trial Court of Makati City is ordered to reassess and determine
the docket fees that should be paid by respondent, BNP, in accordance with the Decision
of this Court, and direct respondent to pay the same within fifteen (15) days, provided the
applicable prescriptive or reglementary period has not yet expired. Thereafter, the trial
court is ordered to proceed with the case with utmost dispatch.
SO ORDERED.
A.M. No. 08-11-7-SC August 28, 2009
RE: REQUEST OF NATIONAL COMMITTEE ON LEGAL AID1 TO EXEMPT LEGAL
AID CLIENTS FROM PAYING FILING, DOCKET AND OTHER FEES.
RESOLUTION
CORONA, J.:
On September 23, 2008 the Misamis Oriental Chapter of the Integrated Bar of the
Philippines (IBP) promulgated Resolution No. 24, series of 2008.2 The resolution
requested the IBP’s National Committee on Legal Aid3 (NCLA) to ask for the exemption
from the payment of filing, docket and other fees of clients of the legal aid offices in the
various IBP chapters. Resolution No. 24, series of 2008 provided:
RESOLUTION NO. 24, SERIES OF 2008
RESOLUTION OF THE IBP–MISAMIS ORIENTAL CHAPTER FOR THE IBP NATIONAL
LEGAL AID OFFICE TO REQUEST THE COURTS AND OTHER QUASI-JUDICIAL
BODIES, THE PHILIPPINE MEDIATION CENTER AND PROSECUTOR’S OFFICES TO
EXEMPT LEGAL AID CLIENTS FROM PAYING FILING, DOCKET AND OTHER FEES
INCIDENTAL TO THE FILING AND LITIGATION OF ACTIONS, AS ORIGINAL
PROCEEDINGS OR ON APPEAL.
WHEREAS, Section 1, Article I of the Guidelines Governing the Establishment and
Operation of Legal Aid Offices in All Chapters of the Integrated Bar of the Philippines
(otherwise known as ["]Guideline[s] on Legal Aid["]) provides: Legal aid is not a matter of
charity. It is a means for the correction of social imbalances that may often lead to
injustice, for which reason, it is a public responsibility of the Bar. The spirit of public
service should therefore unde[r]ly all legal aid offices. The same should be so
administered as to give maximum possible assistance to indigent and deserving
members of the community in all cases, matters and situations in which legal aid may be
necessary to forestall injustice.
WHEREAS, Section 2 of the same provides: In order to attain the objectives of legal aid,
legal aid office should be as close as possible to those who are in need thereof – the
masses. Hence, every chapter of the IBP must establish and operate an adequate legal
aid office.
WHEREAS, the Legal Aid Office of the IBP–Misamis Oriental Chapter has long been
operational, providing free legal services to numerous indigent clients, through the
chapter’s members who render volunteer services in the spirit of public service;
WHEREAS, the courts, quasi-judicial bodies, the various mediation centers and
prosecutor’s offices are collecting fees, be they filing, docket, motion, mediation or other
fees in cases, be they original proceedings or on appeal;
WHEREAS, IBP Legal Aid clients are qualified under the same indigency and merit tests
used by the Public Attorney’s Office (PAO), and would have qualified for PAO assistance,
but for reasons other than indigency, are disqualified from availing of the services of the
PAO, like the existence of a conflict of interests or conflicting defenses, and other similar
causes;
WHEREAS, PAO clients are automatically exempt from the payment of docket and other
fees for cases, be they original proceedings or on appeal, by virtue of the provisions of
Section 16–D of R.A. 9406 (PAO Law), without the need for the filing of any petition or
motion to declare them as pauper litigants;
WHEREAS, there is no similar provision in any substantive law or procedural law giving
IBP Legal Aid clients the same benefits or privileges enjoyed by PAO clients with respect
to the payment of docket and other fees before the courts, quasi-judicial bodies and
prosecutor’s offices;
WHEREAS, the collection of docket and other fees from the IBP Legal Aid clients poses
an additional strain to their next to non-existent finances;
WHEREAS, the quarterly allowance given by the National Legal Aid Office to the IBP
Misamis Oriental Chapter is insufficient to even cover the incidental expenses of
volunteer legal aid lawyers, much less answer for the payment of docket and other fees
collected by the courts, quasi-judicial bodies and prosecutor’s offices and mediation fees
collected by the Philippine Mediation Center;
NOW THEREFORE, on motion of the Board of Officers of the IBP–Misamis Oriental
Chapter, be it resolved as it is hereby resolved, to move the IBP National Legal Aid Office
to make the necessary requests or representations with the Supreme Court, the
Philippine Mediation Center, the Department of Justice and the National Prosecution
Service and other quasi-judicial agencies to effect the grant of a like exemption from the
payment of filing, docket and other fees to the IBP Legal Aid clients as that enjoyed by
PAO clients, towards the end that IBP Legal Aid clients be automatically exempted from
the filing of the abovementioned fees;
RESOLVED FURTHER, that copies of this Resolution be furnished to Supreme Court
Chief Justice Honorable Reynato S. Puno, IBP National President Feliciano M. Bautista,
the IBP Board of Governors, Secretary of Justice Hon. Raul M. Gonzalez, the National
Supervisor of the Philippine Mediation Center, the National Labor Relations Commission,
the Civil Service Commission and other quasi-judicial bodies and their local offices;
RESOLVED FINALLY to move the IBP Board of Governors and National Officers to make
the necessary representations with the National Legislature and its members to effect
the filing of a bill before the House of Representatives and the Senate granting exemption
to IBP Legal Aid clients from the payment of docket, filing and or other fees in cases
before the courts, quasi-judicial agencies and prosecutor’s offices and the mediation
centers.
Done this 23rd day of September 2008, Cagayan De Oro City.
Unanimously approved upon motion severally seconded.4
The Court noted Resolution No. 24, series of 2008 and required the IBP, through the
NCLA, to comment thereon.5
In a comment dated December 18, 2008,6 the IBP, through the NCLA, made the following
comments:
(a) Under Section 16-D of RA7 9406, clients of the Public Attorneys’ Office (PAO) are
exempt from the payment of docket and other fees incidental to the institution of action
in court and other quasi-judicial bodies. On the other hand, clients of legal aid offices in
the various IBP chapters do not enjoy the same exemption. IBP’s indigent clients are
advised to litigate as pauper litigants under Section 21, Rule 3 of the Rules of Court;
(b) They are further advised to submit documentary evidence to prove compliance with
the requirements under Section 21, Rule 3 of the Rules of Court, i.e., certifications from
the barangay and the Department of Social Welfare and Development. However, not only
does the process involve some expense which indigent clients could ill-afford, clients also
lack knowledge on how to go about the tedious process of obtaining these documents;
(c) Although the IBP is given an annual legal aid subsidy, the amount it receives from the
government is barely enough to cover various operating expenses;8
(d) While each IBP local chapter is given a quarterly allocation (from the legal aid
subsidy),9 said allocation covers neither the incidental expenses defrayed by legal aid
lawyers in handling legal aid cases nor the payment of docket and other fees collected
by the courts, quasi-judicial bodies and the prosecutor’s office, as well as mediation fees
and
(e) Considering the aforementioned factors, a directive may be issued by the Supreme
Court granting IBP’s indigent clients an exemption from the payment of docket and other
fees similar to that given to PAO clients under Section 16-D of RA 9406. In this
connection, the Supreme Court previously issued a circular exempting IBP clients from
the payment of transcript of stenographic notes.10
At the outset, we laud the Misamis Oriental Chapter of the IBP for its effort to help improve
the administration of justice, particularly, the access to justice by the poor. Its Resolution
No. 24, series of 2008 in fact echoes one of the noteworthy recommendations during the
Forum on Increasing Access to Justice spearheaded by the Court last year. In
promulgating Resolution No. 24, the Misamis Oriental Chapter of the IBP has effectively
performed its duty to "participate in the development of the legal system by initiating or
supporting efforts in law reform and in the administration of justice."11
We now move on to determine the merits of the request.
Access to Justice:
Making an Ideal a Reality
Access to justice by all, especially by the poor, is not simply an ideal in our society. Its
existence is essential in a democracy and in the rule of law. As such, it is guaranteed by
no less than the fundamental law:
Sec. 11. Free access to the courts and quasi-judicial bodies and adequate legal
assistance shall not be denied to any person by reason of poverty.12 (emphasis supplied)
The Court recognizes the right of access to justice as the most important pillar of legal
empowerment of the marginalized sectors of our society.13 Among others, it has
exercised its power to "promulgate rules concerning the protection and enforcement of
constitutional rights"14 to open the doors of justice to the underprivileged and to allow
them to step inside the courts to be heard of their plaints. In particular, indigent litigants
are permitted under Section 21, Rule 315 and Section 19, Rule 14116 of the Rules of
Court to bring suits in forma pauperis.
The IBP, pursuant to its general objectives to "improve the administration of justice and
enable the Bar to discharge its public responsibility more effectively,"17 assists the Court
in providing the poor access to justice. In particular, it renders free legal aid under the
supervision of the NCLA.
A New Rule, a New Tool
for Access to Justice
Under the IBP’s Guidelines Governing the Establishment and Operation of Legal Aid
Offices in All Chapters of the IBP (Guidelines on Legal Aid), the combined "means and
merit tests" shall be used to determine the eligibility of an applicant for legal aid:
ARTICLE VIII
TESTS
SEC. 19. Combined tests. – The Chapter Legal Aid Committee or the [NCLA], as the
case may be, shall pass upon the request for legal aid by the combined application of the
means test and merit test, and the consideration of other factors adverted to in the
following sections.
SEC. 20. Means test. – The means test aims at determining whether the applicant has
no visible means of support or his income is otherwise insufficient to provide the financial
resources necessary to engage competent private counsel owing to the demands for
subsistence of his family, considering the number of his dependents and the conditions
prevailing in the locality.
The means test shall not be applicable to applicants who fall under the Developmental
Legal Aid Program such as Overseas Filipino Workers, fishermen, farmers, women and
children and other disadvantaged groups.
SEC. 21. Merit test. – The merit test seeks to ascertain whether or not the applicant’s
cause of action or his defense is valid and chances of establishing the same appear
reasonable.
SEC. 22. Other factors. – The effect of the Legal Aid Service or of the failure to render
the same upon the Rule of Law, the proper administration of justice, the public interest
involved in given cases and the practice of law in the locality shall likewise be considered.
SEC. 23. Private practice. – Care shall be taken that the Legal aid is not availed of to the
detriment of the private practice of law, or taken advantage of by anyone for personal
ends.
SEC. 24. Denial. – Legal aid may be denied to an applicant already receiving adequate
assistance from any source other than the Integrated Bar.
The "means and merit tests" appear to be reasonable determinants of eligibility for
coverage under the legal aid program of the IBP. Nonetheless, they may be improved to
ensure that any exemption from the payment of legal fees that may be granted to clients
of the NCLA and the legal aid offices of the various IBP chapters will really further the
right of access to justice by the poor. This will guarantee that the exemption will neither
be abused nor trivialized. Towards this end, the following shall be observed by the NCLA
and the legal aid offices in IBP chapters nationwide in accepting clients and handling
cases for the said clients:
A.M. No. 08-11-7-SC (IRR): Re: Rule on the Exemption From the Payment of Legal Fees
of the Clients of the National Committee on Legal Aid and of the Legal Aid Offices in the
Local Chapters of the Integrated Bar of the Philippines
Rule on the Exemption From the Payment of Legal Fees of the Clients of the National
Committee on Legal Aid (NCLA) and of the Legal Aid Offices in the Local Chapters of the
Integrated Bar of the Philippines (IBP)
ARTICLE I
Purpose
Section 1. Purpose. – This Rule is issued for the purpose of enforcing the right of free
access to courts by the poor guaranteed under Section 11, Article III of the Constitution.
It is intended to increase the access to justice by the poor by exempting from the payment
of legal fees incidental to instituting an action in court, as an original proceeding or on
appeal, qualified indigent clients of the NCLA and of the legal aid offices in local IBP
chapters nationwide.
ARTICLE II
Definition of Terms
Section 1. Definition of important terms. – For purposes of this Rule and as used herein,
the following terms shall be understood to be how they are defined under this Section:
(a) "Developmental legal aid" means the rendition of legal services in public interest
causes involving overseas workers, fisherfolk, farmers, laborers, indigenous cultural
communities, women, children and other disadvantaged groups and marginalized
sectors;
(b) "Disinterested person" refers to the punong barangay having jurisdiction over the
place where an applicant for legal aid or client of the NCLA or chapter legal aid office
resides;
(c) "Falsity" refers to any material misrepresentation of fact or any fraudulent, deceitful,
false, wrong or misleading statement in the application or affidavits submitted to support
it or the affidavit of a disinterested person required to be submitted annually under this
Rule which may substantially affect the determination of the qualifications of the applicant
or the client under the means and merit tests;
(d) "Legal fees" refers to the legal fees imposed under Rule 141 of the Rules of Court as
a necessary incident of instituting an action in court either as an original proceeding or
on appeal. In particular, it includes filing or docket fees, appeal fees, fees for issuance of
provisional remedies, mediation fees, sheriff’s fees, stenographer’s fees (that is fees for
transcript of stenographic notes) and commissioner’s fees;
(e) "Means test" refers to the set of criteria used to determine whether the applicant is
one who has no money or property sufficient and available for food, shelter and basic
necessities for himself and his family;
(f) "Merit test" refers to the ascertainment of whether the applicant’s cause of action or
his defense is valid and whether the chances of establishing the same appear reasonable
and
(g) "Representative" refers to the person authorized to file an application for legal aid in
behalf of the applicant when the said applicant is prevented by a compelling reason from
personally filing his application. As a rule, it refers to the immediate family members of
the applicant. However, it may include any of the applicant’s relatives or any person or
concerned citizen of sufficient discretion who has first-hand knowledge of the personal
circumstances of the applicant as well as of the facts of the applicant’s case.
ARTICLE III
Coverage

Section 1. Persons qualified for exemption from payment of legal fees. – Persons who
shall enjoy the benefit of exemption from the payment of legal fees incidental to instituting
an action in court, as an original proceeding or on appeal, granted under this Rule shall
be limited only to clients of the NCLA and the chapter legal aid offices.
The said clients shall refer to those indigents qualified to receive free legal aid service
from the NCLA and the chapter legal aid offices. Their qualifications shall be determined
based on the tests provided in this Rule.
Section 2. Persons not covered by the Rule. – The following shall be disqualified from
the coverage of this Rule. Nor may they be accepted as clients by the NCLA and the
chapter legal aid offices.
(a) Juridical persons; except in cases covered by developmental legal aid or public
interest causes involving juridical entities which are non-stock, non-profit organizations,
non-governmental organizations and people’s organizations whose individual members
will pass the means test provided in this Rule;
(b) Persons who do not pass the means and merit tests;
(c) Parties already represented by a counsel de parte;
(d) Owners or lessors of residential lands or buildings with respect to the filing of
collection or unlawful detainer suits against their tenants and
(e) Persons who have been clients of the NCLA or chapter legal aid office previously in
a case where the NCLA or chapter legal aid office withdrew its representation because
of a falsity in the application or in any of the affidavits supporting the said application.
Section 3. Cases not covered by the Rule. – The NCLA and the chapter legal aid offices
shall not handle the following:
(a) Cases where conflicting interests will be represented by the NCLA and the chapter
legal aid offices and
(b) Prosecution of criminal cases in court.
ARTICLE IV
Tests of Indigency
Section 1. Tests for determining who may be clients of the NCLA and the legal aid offices
in local IBP chapters. – The NCLA or the chapter legal aid committee, as the case may
be, shall pass upon requests for legal aid by the combined application of the means and
merit tests and the consideration of other relevant factors provided for in the following
sections.
Section 2. Means test; exception. – (a) This test shall be based on the following criteria:
(i) the applicant and that of his immediate family must have a gross monthly income that
does not exceed an amount double the monthly minimum wage of an employee in the
place where the applicant resides and (ii) he does not own real property with a fair market
value as stated in the current tax declaration of more than Three Hundred Thousand
(₱300,000.00) Pesos.
In this connection, the applicant shall execute an affidavit of indigency (printed at the
back of the application form) stating that he and his immediate family do not earn a gross
income abovementioned, nor own any real property with the fair value aforementioned,
supported by an affidavit of a disinterested person attesting to the truth of the applicant’s
affidavit. The latest income tax return and/or current tax declaration, if any, shall be
attached to the applicant’s affidavit.
(b) The means test shall not be applicable to applicants who fall under the developmental
legal aid program such as overseas workers, fisherfolk, farmers, laborers, indigenous
cultural communities, women, children and other disadvantaged groups.
Section 3. Merit test. – A case shall be considered meritorious if an assessment of the
law and evidence at hand discloses that the legal service will be in aid of justice or in the
furtherance thereof, taking into consideration the interests of the party and those of
society. A case fails this test if, after consideration of the law and evidence presented by
the applicant, it appears that it is intended merely to harass or injure the opposite party
or to work oppression or wrong.
Section 4. Other relevant factors that may be considered. – The effect of legal aid or of
the failure to render the same upon the rule of law, the proper administration of justice,
the public interest involved in a given case and the practice of law in the locality shall
likewise be considered.
ARTICLE V
Acceptance and Handling of Cases
Section 1. Procedure in accepting cases. – The following procedure shall be observed in
the acceptance of cases for purposes of this Rule:
(a) Filing of application – An application shall be made personally by the applicant, unless
there is a compelling reason which prevents him from doing so, in which case his
representative may apply for him. It shall adhere substantially to the form made for that
purpose. It shall be prepared and signed by the applicant or, in proper cases, his duly
authorized representative in at least three copies.
Applications for legal aid shall be filed with the NCLA or with the chapter legal aid
committee.
The NCLA shall, as much as possible, concentrate on cases of paramount importance
or national impact.
Requests received by the IBP National Office shall be referred by the NCLA to the proper
chapter legal aid committee of the locality where the cases have to be filed or are
pending. The chapter president and the chairman of the chapter’s legal aid committee
shall be advised of such referral.
(b) Interview – The applicant shall be interviewed by a member of the chapter legal aid
committee or any chapter member authorized by the chapter legal aid committee to
determine the applicant’s qualifications based on the means and merit tests and other
relevant factors. He shall also be required to submit copies of his latest income tax returns
and/or current tax declaration, if available, and execute an affidavit of indigency printed
at the back of the application form with the supporting affidavit of a disinterested person
attesting to the truth of the applicant’s affidavit.lawph!l
After the interview, the applicant shall be informed that he can follow up the action on his
application after five (5) working days.
(c) Action on the application – The chapter legal aid committee shall pass upon every
request for legal aid and submit its recommendation to the chapter board of officers within
three (3) working days after the interview of the applicant. The basis of the
recommendation shall be stated.
The chapter board of officers shall review and act on the recommendation of the chapter
legal aid committee within two (2) working days from receipt thereof; Provided, however,
that in urgent matters requiring prompt or immediate action, the chapter’s executive
director of legal aid or whoever performs his functions may provisionally act on the
application, subject to review by the chapter legal aid committee and, thereafter, by the
chapter board of officers.
The action of the chapter board of officers on the application shall be final.
(d) Cases which may be provisionally accepted. – In the following cases, the NCLA or
the chapter legal aid office, through the chapter’s executive director of legal aid or
whoever performs his functions may accept cases provisionally pending verification of
the applicant’s indigency and an evaluation of the merit of his case.
(i) Where a warrant for the arrest of the applicant has been issued;
(ii) Where a pleading has to be filed immediately to avoid adverse effects to the applicant;
(iii) Where an appeal has to be urgently perfected or a petition for certiorari, prohibition
or mandamus filed has to be filed immediately; and
(iv) Other similar urgent cases.
(e) Assignment of control number – Upon approval of the chapter board of officers of a
person’s application and the applicant is found to be qualified for legal assistance, the
case shall be assigned a control number. The numbering shall be consecutive starting
from January to December of every year. The control number shall also indicate the
region and the chapter handling the case.
Example:
Region18 Chapter Year Month Number
GM - Manila - 2009 - 03 - 099
(f) Issuance of a certification – After an application is approved and a control number duly
assigned, the chapter board of officers shall issue a certification that the person (that is,
the successful applicant) is a client of the NCLA or of the chapter legal aid office. The
certification shall bear the control number of the case and shall state the name of the
client and the nature of the judicial action subject of the legal aid of the NCLA or the legal
aid office of a local IBP chapter.
The certification shall be issued to the successful applicant free of charge.
Section 2. Assignment of cases. – After a case is given a control number, the chapter
board of officers shall refer it back to the chapter legal aid committee. The chapter legal
aid committee shall assign the case to any chapter member who is willing to handle the
case.
In case no chapter member has signified an intention to handle the case voluntarily, the
chapter legal aid committee shall refer the matter to the chapter board of officers together
with the names of at least three members who, in the chapter legal aid committee’s
discretion, may competently render legal aid on the matter. The chapter board of officers
shall appoint one chapter member from among the list of names submitted by the chapter
legal aid committee. The chapter member chosen may not refuse the appointment except
on the ground of conflict of interest or other equally compelling grounds as provided in
the Code of Professional Responsibility,19 in which case the chapter board of officers
shall appoint his replacement from among the remaining names in the list previously
submitted by the chapter legal aid committee.
The chapter legal aid committee and the chapter board of officers shall take the
necessary measures to ensure that cases are well-distributed to chapter members.
Section 3. Policies and guidelines in the acceptance and handling of cases. – The
following policies and guidelines shall be observed in the acceptance and handling of
cases:
(a) First come, first served – Where both the complainant/plaintiff/petitioner and
defendant/ respondent apply for legal aid and both are qualified, the first to seek
assistance shall be given preference.
(b) Avoidance of conflict of interest – Where acceptance of a case will give rise to a
conflict of interest on the part of the chapter legal aid office, the applicant shall be duly
informed and advised to seek the services of a private counsel or another legal aid
organization.
Where handling of the case will give rise to a conflict of interest on the part of the chapter
member assigned to the case, the client shall be duly informed and advised about it. The
handling lawyer shall also inform the chapter legal aid committee so that another chapter
member may be assigned to handle the case. For purposes of choosing the substitute
handling lawyer, the rule in the immediately preceding section shall be observed.
(c) Legal aid is purely gratuitous and honorary – No member of the chapter or member
of the staff of the NCLA or chapter legal aid office shall directly or indirectly demand or
request from an applicant or client any compensation, gift or present for legal aid services
being applied for or rendered.
(d) Same standard of conduct and equal treatment – A chapter member who is tasked to
handle a case accepted by the NCLA or by the chapter legal aid office shall observe the
same standard of conduct governing his relations with paying clients. He shall treat the
client of the NCLA or of the chapter legal aid office and the said client’s case in a manner
that is equal and similar to his treatment of a paying client and his case.
(e) Falsity in the application or in the affidavits – Any falsity in the application or in the
affidavit of indigency or in the affidavit of a disinterested person shall be sufficient cause
for the NCLA or chapter legal aid office to withdraw or terminate the legal aid. For this
purpose, the chapter board of officers shall authorize the handling lawyer to file the proper
manifestation of withdrawal of appearance of the chapter legal aid office in the case with
a motion for the dismissal of the complaint or action of the erring client. The court, after
hearing, shall approve the withdrawal of appearance and grant the motion, without
prejudice to whatever criminal liability may have been incurred.
Violation of this policy shall disqualify the erring client from availing of the benefits of this
Rule in the future.
(f) Statement in the initiatory pleading – To avail of the benefits of the Rule, the initiatory
pleading shall state as an essential preliminary allegation that (i) the party initiating the
action is a client of the NCLA or of the chapter legal aid office and therefore entitled to
exemption from the payment of legal fees under this Rule and (ii) a certified true copy of
the certification issued pursuant to Section 1(e), of this Article is attached or annexed to
the pleading.
Failure to make the statement shall be a ground for the dismissal of the action without
prejudice to its refiling.
The same rule shall apply in case the client, through the NCLA or chapter legal aid office,
files an appeal.
(g) Attachment of certification in initiatory pleading – A certified true copy of the
certification issued pursuant to Section 1(e), of this Article shall be attached as an annex
to the initiatory pleading.
Failure to attach a certified true copy of the said certification shall be a ground for the
dismissal of the action without prejudice to its refiling.
The same rule shall apply in case the client, through the NCLA or chapter legal aid office,
files an appeal.
(h) Signing of pleadings – All complaints, petitions, answers, replies, memoranda and
other important pleadings or motions to be filed in courts shall be signed by the handling
lawyer and co-signed by the chairperson or a member of the chapter legal aid committee,
or in urgent cases, by the executive director of legal aid or whoever performs his
functions.
Ordinary motions such as motions for extension of time to file a pleading or for
postponement of hearing and manifestations may be signed by the handling lawyer
alone.
(i) Motions for extension of time or for postponement – The filing of motions for extension
of time to file a pleading or for postponement of hearing shall be avoided as much as
possible as they cause delay to the case and prolong the proceedings.
(j) Transfer of cases – Transfer of cases from one handling lawyer to another shall be
affected only upon approval of the chapter legal aid committee.
Section 4. Decision to appeal. – (a) All appeals must be made on the request of the client
himself. For this purpose, the client shall be made to fill up a request to appeal.
(b) Only meritorious cases shall be appealed. If the handling lawyer, in consultation with
the chapter legal aid committee, finds that there is no merit to the appeal, the client should
be immediately informed thereof in writing and the record of the case turned over to him,
under proper receipt. If the client insists on appealing the case, the lawyer handling the
case should perfect the appeal before turning over the records of the case to him.
Section 5. Protection of private practice. – Utmost care shall be taken to ensure that legal
aid is neither availed of to the detriment of the private practice of law nor taken advantage
of by anyone for purely personal ends.
ARTICLE VI
Withdrawal of Legal Aid and Termination of Exemption
Section 1. Withdrawal of legal aid. – The NCLA or the chapter legal aid committee may,
in justifiable instances as provided in the next Section, direct the handling lawyer to
withdraw representation of a client’s cause upon approval of the IBP Board of Governors
(in the case of the NCLA) or of the chapter board of officers (in the case of the chapter
legal aid committee) and through a proper motion filed in Court.
Section 2. Grounds for withdrawal of legal aid. – Withdrawal may be warranted in the
following situations:
(a) In a case that has been provisionally accepted, where it is subsequently ascertained
that the client is not qualified for legal aid;
(b) Where the client’s income or resources improve and he no longer qualifies for
continued assistance based on the means test. For this purpose, on or before January
15 every year, the client shall submit an affidavit of a disinterested person stating that the
client and his immediate family do not earn a gross income mentioned in Section 2, Article
V, nor own any real property with the fair market value mentioned in the same Section;
(c) When it is shown or found that the client committed a falsity in the application or in
the affidavits submitted to support the application;
(d) When the client subsequently engages a de parte counsel or is provided with a de
oficio counsel;
(e) When, despite proper advice from the handling lawyer, the client cannot be refrained
from doing things which the lawyer himself ought not do under the ethics of the legal
profession, particularly with reference to their conduct towards courts, judicial officers,
witnesses and litigants, or the client insists on having control of the trial, theory of the
case, or strategy in procedure which would tend to result in incalculable harm to the
interests of the client;
(f) When, despite notice from the handling lawyer, the client does not cooperate or
coordinate with the handling lawyer to the prejudice of the proper and effective rendition
of legal aid such as when the client fails to provide documents necessary to support his
case or unreasonably fails to attend hearings when his presence thereat is required; and
(g) When it becomes apparent that the representation of the client’s cause will result in a
representation of conflicting interests, as where the adverse party had previously
engaged the services of the NCLA or of the chapter legal aid office and the subject matter
of the litigation is directly related to the services previously rendered to the adverse party.
Section 3. Effect of withdrawal. – The court, after hearing, shall allow the NCLA or the
chapter legal aid office to withdraw if it is satisfied that the ground for such withdrawal
exists.
Except when the withdrawal is based on paragraphs (b), (d) and (g) of the immediately
preceding Section, the court shall also order the dismissal of the case. Such dismissal is
without prejudice to whatever criminal liability may have been incurred if the withdrawal
is based on paragraph (c) of the immediately preceding Section.
ARTICLE VII
Miscellaneous Provisions
Section 1. Lien on favorable judgment. – The amount of the docket and other lawful fees
which the client was exempted from paying shall be a lien on any judgment rendered in
the case favorable to the indigent, unless the court otherwise provides.
In case, attorney’s fees have been awarded to the client, the same shall belong to the
NCLA or to the chapter legal aid office that rendered the legal aid, as the case may be.
It shall form part of a special fund which shall be exclusively used to support the legal aid
program of the NCLA or the chapter legal aid office. In this connection, the chapter board
of officers shall report the receipt of attorney’s fees pursuant to this Section to the NCLA
within ten (10) days from receipt thereof. The NCLA shall, in turn, include the data on
attorney’s fees received by IBP chapters pursuant to this Section in its liquidation report
for the annual subsidy for legal aid.1awphi1
Section 2. Duty of NCLA to prepare forms. – The NCLA shall prepare the standard forms
to be used in connection with this Rule. In particular, the NCLA shall prepare the following
standard forms: the application form, the affidavit of indigency, the supporting affidavit of
a disinterested person, the affidavit of a disinterested person required to be submitted
annually under Section 2(b), Article VI, the certification issued by the NCLA or the chapter
board of officers under Section 1(f), Article V and the request to appeal.
The said forms, except the certification, shall be in Filipino. Within sixty (60) days from
receipt of the forms from the NCLA, the chapter legal aid offices shall make translations
of the said forms in the dominant dialect used in their respective localities.
Section 3. Effect of Rule on right to bring suits in forma pauperis. – Nothing in this Rule
shall be considered to preclude those persons not covered either by this Rule or by the
exemption from the payment of legal fees granted to clients of the Public Attorney’s Office
under Section 16-D of RA 9406 to litigate in forma pauperis under Section 21, Rule 3 and
Section 19 Rule 141 of the Rules of Court.
Section 4. Compliance with Rule on Mandatory Legal Aid Service. – Legal aid service
rendered by a lawyer under this Rule either as a handling lawyer or as an interviewer of
applicants under Section 1(b), Article IV hereof shall be credited for purposes of
compliance with the Rule on Mandatory Legal Aid Service.
The chairperson of the chapter legal aid office shall issue the certificate similar to that
issued by the Clerk of Court in Section 5(b) of the Rule on Mandatory Legal Aid Service.
ARTICLE VIII
Effectivity
Section 1. Effectivity. – This Rule shall become effective after fifteen days following its
publication in a newspaper of general circulation.
The above rule, in conjunction with Section 21, Rule 3 and Section 19, Rule 141 of the
Rules of Court, the Rule on Mandatory Legal Aid Service and the Rule of Procedure for
Small Claims Cases, shall form a solid base of rules upon which the right of access to
courts by the poor shall be implemented. With these rules, we equip the poor with the
tools to effectively, efficiently and easily enforce their rights in the judicial system.
A Final Word
Equity will not suffer a wrong to be without a remedy. Ubi jus ibi remedium. Where there
is a right, there must be a remedy. The remedy must not only be effective and efficient,
but also readily accessible. For a remedy that is inaccessible is no remedy at all.
The Constitution guarantees the rights of the poor to free access to the courts and to
adequate legal assistance. The legal aid service rendered by the NCLA and legal aid
offices of IBP chapters nationwide addresses only the right to adequate legal assistance.
Recipients of the service of the NCLA and legal aid offices of IBP chapters may enjoy
free access to courts by exempting them from the payment of fees assessed in
connection with the filing of a complaint or action in court. With these twin initiatives, the
guarantee of Section 11, Article III of Constitution is advanced and access to justice is
increased by bridging a significant gap and removing a major roadblock.
WHEREFORE, the Misamis Oriental Chapter of the Integrated Bar of the Philippines is
hereby COMMENDED for helping increase the access to justice by the poor. The request
of the Misamis Oriental Chapter for the exemption from the payment of filing, docket and
other fees of the clients of the legal aid offices of the various IBP chapters is GRANTED.
The Rule on the Exemption From the Payment of Legal Fees of the Clients of the National
Committee on Legal Aid (NCLA) and of the Legal Aid Offices in the Local Chapters of the
Integrated Bar of the Philippines (IBP) (which shall be assigned the docket number A.M.
No. 08-11-7-SC [IRR] provided in this resolution is hereby APPROVED. In this
connection, the Clerk of Court is DIRECTED to cause the publication of the said rule in
a newspaper of general circulation within five days from the promulgation of this
resolution.
The Office of the Court Administrator is hereby directed to promptly issue a circular to
inform all courts in the Philippines of the import of this resolution.
SO ORDERED.
A. M. No. 09-6-9-SC August 19, 2009
RE: Query of Mr. Roger C. Prioreschi Re Exemption from Legal and Filing Fees of
the Good Shepherd Foundation, Inc.
RESOLUTION
BERSAMIN, J.:
In his letter dated May 22, 2009 addressed to the Chief Justice, Mr. Roger C. Prioreschi,
administrator of the Good Shepherd Foundation, Inc., wrote:
The Good Shepherd Foundation, Inc. is very grateful for your 1rst. Indorsement to pay a
nominal fee of Php 5,000.00 and the balance upon the collection action of 10 million
pesos, thus giving us access to the Justice System previously denied by an up-front
excessive court fee.
The Hon. Court Administrator Jose Perez pointed out to the need of complying with OCA
Circular No. 42-2005 and Rule 141 that reserves this "privilege" to indigent persons.
While judges are appointed to interpret the law, this type of law seems to be extremely
detailed with requirements that do not leave much room for interpretations.
In addition, this law deals mainly with "individual indigent" and it does not include
Foundations or Associations that work with and for the most Indigent persons. As seen
in our Article of Incorporation, since 1985 the Good Shepherd Foundation, Inc. reached-
out to the poorest among the poor, to the newly born and abandoned babies, to children
who never saw the smile of their mother, to old people who cannot afford a few pesos to
pay for "common prescriptions", to broken families who returned to a normal life. In other
words, we have been working hard for the very Filipino people, that the Government and
the society cannot reach to, or have rejected or abandoned them.
Can the Courts grant to our Foundation who works for indigent and underprivileged
people, the same option granted to indigent people?
The two Executive Judges, that we have approached, fear accusations of favoritism or
other kind of attack if they approve something which is not clearly and specifically stated
in the law or approved by your HONOR.
Can your Honor help us once more?
Grateful for your understanding, God bless you and your undertakings.
We shall be privileged if you find time to visit our orphanage – the Home of Love – and
the Spiritual Retreat Center in Antipolo City.
To answer the query of Mr. Prioreschi, the Courts cannot grant to foundations like the
Good Shepherd Foundation, Inc. the same exemption from payment of legal fees granted
to indigent litigants even if the foundations are working for indigent and underprivileged
people.
The basis for the exemption from legal and filing fees is the free access clause, embodied
in Sec. 11, Art. III of the 1987 Constitution, thus:
Sec. 11. Free access to the courts and quasi judicial bodies and adequate legal
assistance shall not be denied to any person by reason of poverty.
The importance of the right to free access to the courts and quasi judicial bodies and to
adequate legal assistance cannot be denied. A move to remove the provision on free
access from the Constitution on the ground that it was already covered by the equal
protection clause was defeated by the desire to give constitutional stature to such specific
protection of the poor.1
In implementation of the right of free access under the Constitution, the Supreme Court
promulgated rules, specifically, Sec. 21, Rule 3, Rules of Court,2 and Sec. 19, Rule 141,
Rules of Court,3 which respectively state thus:
Sec. 21. Indigent party. — A party may be authorized to litigate his action, claim or
defense as an indigent if the court, upon an ex parte application and hearing, is satisfied
that the party is one who has no money or property sufficient and available for food,
shelter and basic necessities for himself and his family.
Such authority shall include an exemption from payment of docket and other lawful fees,
and of transcripts of stenographic notes which the court may order to be furnished him.
The amount of the docket and other lawful fees which the indigent was exempted from
paying shall be a lien on any judgment rendered in the case favorable to the indigent,
unless the court otherwise provides.
Any adverse party may contest the grant of such authority at any time before judgment
is rendered by the trial court. If the court should determine after hearing that the party
declared as an indigent is in fact a person with sufficient income or property, the proper
docket and other lawful fees shall be assessed and collected by the clerk of court. If
payment is not made within the time fixed by the court, execution shall issue for the
payment thereof, without prejudice to such other sanctions as the court may impose.
(22a)1avvphi1
Sec. 19. Indigent litigants exempt from payment of legal fees.– Indigent litigants (a)
whose gross income and that of their immediate family do not exceed an amount double
the monthly minimum wage of an employee and (b) who do not own real property with a
fair market value as stated in the current tax declaration of more than three hundred
thousand (P300,000.00) pesos shall be exempt from payment of legal fees.
The legal fees shall be a lien on any judgment rendered in the case favorable to the
indigent litigant unless the court otherwise provides.
To be entitled to the exemption herein provided, the litigant shall execute an affidavit that
he and his immediate family do not earn a gross income abovementioned, and they do
not own any real property with the fair value aforementioned, supported by an affidavit of
a disinterested person attesting to the truth of the litigant’s affidavit. The current tax
declaration, if any, shall be attached to the litigant’s affidavit.
Any falsity in the affidavit of litigant or disinterested person shall be sufficient cause to
dismiss the complaint or action or to strike out the pleading of that party, without prejudice
to whatever criminal liability may have been incurred.
The clear intent and precise language of the aforequoted provisions of the Rules of Court
indicate that only a natural party litigant may be regarded as an indigent litigant. The
Good Shepherd Foundation, Inc., being a corporation invested by the State with a
juridical personality separate and distinct from that of its members,4 is a juridical person.
Among others, it has the power to acquire and possess property of all kinds as well as
incur obligations and bring civil or criminal actions, in conformity with the laws and
regulations of their organization.5 As a juridical person, therefore, it cannot be accorded
the exemption from legal and filing fees granted to indigent litigants.

That the Good Shepherd Foundation, Inc. is working for indigent and underprivileged
people is of no moment. Clearly, the Constitution has explicitly premised the free access
clause on a person’s poverty, a condition that only a natural person can suffer.

There are other reasons that warrant the rejection of the request for exemption in favor
of a juridical person. For one, extending the exemption to a juridical person on the ground
that it works for indigent and underprivileged people may be prone to abuse (even with
the imposition of rigid documentation requirements), particularly by corporations and
entities bent on circumventing the rule on payment of the fees. Also, the scrutiny of
compliance with the documentation requirements may prove too time-consuming and
wasteful for the courts.

In view of the foregoing, the Good Shepherd Foundation, Inc. cannot be extended the
exemption from legal and filing fees despite its working for indigent and underprivileged
people.

SO ORDERED.