NAVALES V.

ABAYA FACTS: Petitioners consisting of more than three hundred junior officers and enlisted men, mostly from the elite units of the AFP who all took part in a failed coup attempt in Oakwood Suites, Makati, filed a writ of habeas corpus before the Supreme Court questioning the jurisdiction of the Judge Advocate General in filing charges against them for violations of the Articles of War Sections 67, 96, and 97. The Regional Trial Court acquitted 290 of the original 331 soldiers who participated in the mutiny. Petitioners contend that the Judge Advocate General due to the fact that their participation in the mutiny was not service connected. The present petitions for prohibition and for habeas corpus were then filed with the Supreme Court. Acting on the prayer for the issuance of temporary restraining order in the petition for prohibition, the Supreme Court directed the parties to observe the status quo prevailing before the filing of the petition. ISSUE: Whether or not the Regional Trial Court can divest the military courts of jurisdiction. HELD: RA 7055 provides that "Members of the Armed Forces of the Philippines and other persons subject to military law, including members of the Citizens Armed Forces Geographical Units, who commit crimes or offenses penalized under the Revised Penal Code, other special penal laws, or local government ordinances, regardless of whether or not civilians are co-accused, victims, or offended parties which may be natural or juridical persons, shall be tried by the proper civil court, except when the offense, as determined before arraignment by the civil court, is service-connected, in which case the offense shall be tried by court-martial: Provided, That the President of the Philippines may, in the interest of justice, order or direct at any time before arraignment that any such crimes or offenses be tried by the proper civil courts." As used in this Section, service-connected crimes or offenses shall be limited to those defined in Articles 54 to 70, Articles 72 to 92, and Articles 95 to 97 of Commonwealth Act No. 408, as amended. In imposing the penalty for such crimes or offenses, the court-martial may take into consideration the penalty prescribed therefor in the Revised Penal Code, other special laws, or local government ordinances. The second paragraph of the above provision explicitly specifies what are considered service-connected crimes or offenses under Commonwealth Act 408 (CA 408), as amended, also known as the Articles of War. Section 1 of RA 7055 vests on the military courts the jurisdiction over the foregoing offenses. In view of the clear mandate of RA 7055, the Regional Trial Court cannot divest the General Court-Martial of its jurisdiction over those charged with violations of Articles 63, 64, 67, 96 and 97 of the Articles of War, as these are specifically included as service-connected offenses or crimes under Section 1 thereof. Pursuant to the same provision of law, the military courts have jurisdiction over these crimes or offenses. There was no factual and legal basis for the Regional Trial Court to rule that violations of said articles of the Articles of War were committed in furtherance of coup detat and, as such, absorbed by the latter crime. It bears stressing that, after a reinvestigation, the Panel of Prosecutors found no probable cause for coup detat against Navales, et al., and recommended the dismissal of the case against them. The trial court approved the recommendation and dismissed the case as against Navales et al. There is, as yet, no evidence on record that the Navale et al., committed the violations of Articles 63, 64, 96, and 97 of the Articles of War in furtherance of coup detat. In fine, in making the sweeping declaration that these charges were not service-connected, but rather absorbed and in furtherance of the crime of coup detat, the RTC (Branch 148) acted without or in excess of jurisdiction. Such declaration is, in legal contemplation, necessarily null and void and does not exist. [G.R. No. 138381. November 10, 2004] GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. COMMISSION ON AUDIT, respondent. [G.R. No. 141625. November 10, 2004] GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. ALFREDO D. PINEDA, DANIEL GO, FELINO BULANDUS, FELICIMO J. FERRARIS, JR., BEN HUR PORLUCAS, LUIS HIPONIA, MARIA LUISA A. FERNANDEZ, VICTORINA JOVEN, CORAZON S. ALIWANAG, SILVER L. MARTINES, SR., RENATO PEREZ, LOLITA CAYLAN, DOUGLAS VALLEJO and LETICIA ALMAZAN, on their own behalf and on behalf of all GSIS retirees with all of whom they share a common and general interest, respondents. RESOLUTION YNARES-SANTIAGO, J.: On April 16, 2002, the Court promulgated a decision on these two consolidated cases partially granting the petition in G.R. No. 138381 (first petition) thereby reversing the Commission on Audits (COA) disallowance of certain fringe benefits granted to GSIS employees. As a result, the Court ordered the refund of amounts representing fringe benefits corresponding to those allowed in the first petition in favor of the respondents in G.R. No. 141625 (second petition). The benefits which the Court ordered to be refunded included increases in longevity pay, childrens allowance and management contribution to the Provident Fund as well as premiums for group personal accident insurance. On the other hand, the Court affirmed the COA disallowance of loyalty and service cash award as well as housing allowance in excess of that approved by the COA. Amounts corresponding to these benefits were previously deducted by GSIS from respondents retirement benefits in view of the COA disallowance in the first petition. COA did not seek reconsideration of the judgment ordering said refund, which thus became final and executory.

On August 7, 2002, the respondents in the second petition, all GSIS retirees, filed a motion for amendatory and clarificatory judgment (amendatory motion).[1] They averred that we did not categorically resolve the issue raised in the second petition, namely: whether or not the GSIS may lawfully deduct any amount from their retirement benefits in light of Section 39 of Republic Act No. 8291. According to respondents, said provision of law clearly states that no amount whatsoever could be legally deducted from retirement benefits, even those amounts representing COA disallowances. They posit that we should have ordered refund not only of benefits allowed in the first petition, but all amounts claimed, regardless of whether or not these were allowed by the COA. These include items which were correctly disallowed by the COA in the first petition, as well as disallowed benefits under the second petition. The latter consists of initial payment of productivity bonus, accelerated implementation of the new salary schedule effective August 1, 1995, 1995 mid-year financial assistance and increase in clothing, rice and meal allowances. Respondents further insist that we should have awarded damages in their favor, citing the GSIS alleged bad faith in making the deductions. GSIS filed a comment[2] to respondents amendatory motion, as directed by the Court in a resolution dated September 3, 2002. GSIS posited that the other benefits not passed upon in the main judgment should be understood by respondents as having been impliedly denied by this Court. It also sought clarification of our decision insofar as it declared that there was no identity of subject matter between the COA proceedings, from which the first petition stemmed, and respondents claim under the second petition, which emanated from an order of the GSIS Board of Trustees (Board). As for the damages claimed by respondents, GSIS insists that it made the deductions in good faith for these were done in accordance with COA directives. Respondents filed a reply[3] to the comment of GSIS on September 9, 2002. Meanwhile, respondents filed a second motion, this time for leave to file a motion for discretionary and partial execution[4] (motion for execution). They prayed that GSIS be ordered to effect the refund, as finally adjudged in our decision, pending resolution of their amendatory motion as to the other deducted amounts. We granted the motion for execution on September 3, 2002. Subsequently, on December 26, 2002, counsel for respondents, Atty. Agustin Sundiam, filed a motion for entry and enforcement of attorneys lien[5] (motion for charging lien) and a supplement[6] to this motion on January 10, 2003. He sought entry of a charging lien in the records of this case pursuant to Section 37 of Rule 138. He prayed for an order directing the GSIS to deduct, as his professional fees, 15% from respondents refund vouchers since the GSIS was already in the process of releasing his clients checks in compliance with our judgment in the first petition. The payment scheme was allegedly authorized by the Board of Directors of his clients, the GSIS Retirees Association, Inc. (GRIA), through a board resolution[7] that he has attached to the motion. Atty. Sundiams motion for charging lien was opposed by petitioner GSIS on the ground that it was through its efforts, and not Atty. Sundiams, that the retirees were able to obtain a refund.[8] Meanwhile, the GRIA confirmed the payment scheme it adopted with Atty. Sundiam and prayed for its approval.[9] Thereafter, on January 10, 2003, respondents filed another manifestation and motion as well as supplement thereto, claiming that GSIS was deducting new and unspecified sums from the amount it was refunding to respondents. These new deductions purportedly pertain to another set of COA disallowances.[10] On January 21, 2003, respondents again filed a motion[11] praying for the inclusion in the refundable amount of dividends on the management contribution to the Provident Fund (motion for payment of dividends). Respondents claimed that the contribution, which amounted to Fifty Million Pesos (P50M), was retained by GSIS for more than five years and thus earned a considerable sum of income while under its control. GSIS declared and paid dividends on said contribution to incumbent officials and employees, but refused to extend the same benefits to respondents/retirees. On March 6, 2003, GSIS filed a joint comment[12] to respondents two foregoing motions contending that the new deductions are legitimate. The deductions pertain to car loan arrearages, disallowed employees compensation claims and the like. As for the dividends on the Provident Fund contributions, respondents are not entitled to the same because while the first petition was pending, the contributions were not actually remitted to the fund but were withheld by COA pursuant to its earlier disallowance. On October 2, 2003, respondents filed another motion[13] for an order to compel the GSIS to pay dividends on the Provident Fund contributions pending resolution of their other motions. They also sought refund of Permanent Partial Disability (PPD) benefits that GSIS supposedly paid to some of the respondents, but once again arbitrarily deducted from the amount which the Court ordered to be refunded. In a minute resolution[14] dated November 11, 2003, we denied the last motion for lack of merit. We likewise denied with finality respondents motion for reconsideration from the denial of said motion.[15] We now resolve the matters raised by the parties. On the amendatory motion, it must be clarified that the question raised before this Court in the second petition was the issue of the Boards jurisdiction to resolve respondents claim for refund of amounts representing deductions from their retirement benefits. What was assailed in the second petition was the appellate courts ruling that the Board had jurisdiction over respondents claim since there was no identity of subject matter between the proceedings then pending before the COA and the petition brought by respondents before the Board. The Court of Appeals did not rule on the main controversy of whether COA disallowances could be deducted from

retirement benefits because the Board ordered the dismissal of respondents claim for alleged lack of jurisdiction, before it could even decide on the principal issue. Consequently, the only matter that was properly elevated to this Court was the issue of whether or not the Board had jurisdiction over respondents demands. We did not resolve the issue of whether or not the deductions were valid under Section 39 of RA 8291, for the simple reason that the Board, as well as the appellate court, did not tackle the issue. The doctrine of primary jurisdiction[16] would ordinarily preclude us from resolving the matter, which calls for a ruling to be first made by the Board. It is the latter that is vested by law with exclusive and original jurisdiction to settle any dispute arising under RA 8291, as well as other matters related thereto.[17] However, both the GSIS and respondents have extensively discussed the merits of the case in their respective pleadings and did not confine their arguments to the issue of jurisdiction. Respondents, in fact, submit that we should resolve the main issue on the ground that it is a purely legal question. Respondents further state that a remand of the case to the Board would merely result in unnecessary delay and needless expense for the parties. They thus urge the Court to decide the main question in order to finally put an end to the controversy. Indeed, the principal issue pending before the Board does not involve any factual question, as it concerns only the correct application of the last paragraph of Section 39, RA 8291. The parties agreed that the lone issue is whether COA disallowances could be legally deducted from retirement benefits on the ground that these were respondents monetary liabilities to the GSIS under the said provision. There is no dispute that the amounts deducted by GSIS represented COA disallowances. Thus, the only question left for the Board to decide is whether the deductions are allowed under RA 8291. Under certain exceptional circumstances, we have taken cognizance of questions of law even in the absence of an initial determination by a lower court or administrative body. In China Banking Corporation v. Court of Appeals,[18] the Court held: At the outset, the Courts attention is drawn to the fact that since the filing of this suit before the trial court, none of the substantial issues have been resolved. To avoid and gloss over the issues raised by the parties, as what the trial court and respondent Court of Appeals did, would unduly prolong this litigation involving a rather simple case of foreclosure of mortgage. Undoubtedly, this will run counter to the avowed purpose of the rules, i.e., to assist the parties in obtaining just, speedy and inexpensive determination of every action or proceeding. The Court, therefore, feels that the central issues of the case, albeit unresolved by the courts below, should now be settled specially as they involved pure questions of law. Furthermore, the pleadings of the respective parties on file have amply ventilated their various positions and arguments on the matter necessitating prompt adjudication. In Roman Catholic Archbishop of Manila v. Court of Appeals,[19] the Court likewise held that the remand of a case is not necessary where the court is in a position to resolve the dispute based on the records before it. The Court will decide actions on the merits in order to expedite the settlement of a controversy and if the ends of justice would not be subserved by a remand of the case. Here, the primary issue calls for an application of a specific provision of RA 8291 as well as relevant jurisprudence on the matter. No useful purpose will indeed be served if we remand the matter to the Board, only for its decision to be elevated again to the Court of Appeals and subsequently to this Court. Hence, we deem it sound to rule on the merits of the controversy rather than to remand the case for further proceedings. The last paragraph of Section 39, RA 8291 specifically provides: SEC. 39. Exemption from Tax, Legal Process and Lien.xxx xxx xxx

The funds and/or the properties referred to herein as well as the benefits, sums or monies corresponding to the benefits under this Act shall be exempt from attachment, garnishment, execution, levy or other processes issued by the courts, quasi-judicial agencies or administrative bodies including Commission on Audit (COA) disallowances and from all financial obligations of the members, including his pecuniary accountability arising from or caused or occasioned by his exercise or performance of his official functions or duties, or incurred relative to or in connection with his position or work except when his monetary liability, contractual or otherwise, is in favor of the GSIS. It is clear from the above provision that COA disallowances cannot be deducted from benefits under RA 8291, as the same are explicitly made exempt by law from such deductions. Retirement benefits cannot be diminished by COA disallowances in view of the clear mandate of the foregoing provision. It is a basic rule in statutory construction that if a statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without interpretation. This is what is known as plain-meaning rule or verba legis.[20] Accordingly, the GSIS interpretation of Section 39 that COA disallowances have become monetary liabilities of respondents to the GSIS and therefore fall under the exception stated in the law is wrong. No interpretation of the said provision is necessary given the clear language of the statute. A meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein by construction.[21] Moreover, if we are to accept the GSIS interpretation, then it would be unnecessary to single out COA disallowances as among those

from which benefits under RA 8291 are exempt. In such a case, the inclusion of COA disallowances in the enumeration of exemptions would be a mere surplusage since the GSIS could simply consider COA disallowances as monetary liabilities in its favor. Such a construction would empower the GSIS to withdraw, at its option, an exemption expressly granted by law. This could not have been the intention of the statute. That retirement pay accruing to a public officer may not be withheld and applied to his indebtedness to the government has been settled in several cases. In Cruz v. Tantuico, Jr.,[22] the Court, citing Hunt v. Hernandez,[23] explained the reason for such policy thus: x x x we are of the opinion that the exemption should be liberally construed in favor of the pensioner. Pension in this case is a bounty flowing from the graciousness of the Government intended to reward past services and, at the same time, to provide the pensioner with the means with which to support himself and his family. Unless otherwise clearly provided, the pension should inure wholly to the benefit of the pensioner. It is true that the withholding and application of the amount involved was had under section 624 of the Administrative Code and not by any judicial process, but if the gratuity could not be attached or levied upon execution in view of the prohibition of section 3 of Act No. 4051, the appropriation thereof by administrative action, if allowed, would lead to the same prohibited result and enable the respondents to do indirectly what they can not do directly under section 3 of Act No. 4051. Act No. 4051 is a later statute having been approved on February 21, 1933, whereas the Administrative Code of 1917 which embodies section 624 relied upon by the respondents was approved on March 10 of that year. Considering section 3 of Act No. 4051 as an exception to the general authority granted in section 624 of the Administrative Code, antagonism between the two provisions is avoided. (Underscoring supplied) The above ruling was reiterated in Tantuico, Jr. v. Domingo,[24] where the Court similarly declared that benefits under retirement laws cannot be withheld regardless of the petitioners monetary liability to the government. The policy of exempting retirement benefits from attachment, levy and execution, as well as unwarranted deductions, has been embodied in a long line of retirement statutes. Act No. 4051,[25] which provides for the payment of gratuity to officers and employees of the Insular Government upon retirement due to reorganization, expressly provides in its Section 3 that (t)he gratuity provided for in this Act shall not be attached or levied upon execution. The law which established the GSIS, Commonwealth Act No. 186 (CA No. 186),[26] went further by providing as follows: SEC. 23. Exemptions from legal process and liens. No policy of life insurance issued under this Act, or the proceeds thereof, except those corresponding to the annual premium thereon in excess of five hundred pesos per annum, when paid to any member thereunder, shall be liable to attachment, garnishment, or other process, or to be seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of such member, or his beneficiary, or any other person who may have a right thereunder, either before or after payment; nor shall the proceeds thereof, when not made payable to a named beneficiary, constitute a part of the estate of the member for payment of his debt. Presidential Decree No. 1146,[27] which amended CA No. 186, likewise contained a provision exempting benefits from attachment, garnishment, levy or other processes. However, the exemption was expressly made inapplicable to obligations of the member to the System, or to the employer, or when the benefits granted are assigned by the member with the authority of the System.[28] The latest GSIS enactment, RA 8291,[29] provides for a more detailed and wider range of exemptions under Section 39. Aside from exempting benefits from judicial processes, it likewise unconditionally exempts benefits from quasi-judicial and administrative processes, including COA disallowances, as well as all financial obligations of the member. The latter includes any pecuniary accountability of the member which arose out of the exercise or performance of his official functions or duties or incurred relative to his position or work. The only exception to such pecuniary accountability is when the same is in favor of the GSIS. Thus, monetary liability in favor of GSIS refers to indebtedness of the member to the System other than those which fall under the categories of pecuniary accountabilities exempted under the law. Such liability may include unpaid social insurance premiums and balances on loans obtained by the retiree from the System, which do not arise in the performance of his duties and are not incurred relative to his work. The general policy, as reflected in our retirement laws and jurisprudence, is to exempt benefits from all legal processes or liens, but not from outstanding obligations of the member to the System. This is to ensure maintenance of the GSIS fund reserves in order to guarantee fulfillment of all its obligations under RA 8291. Notwithstanding the foregoing, however, we find it necessary to nonetheless differentiate between those benefits which were properly disallowed by the COA and those which were not. Anent the benefits which were improperly disallowed, the same rightfully belong to respondents without qualification. As for benefits which were justifiably disallowed by the COA, the same were erroneously granted to and received by respondents who now have the obligation to return the same to the System. It cannot be denied that respondents were recipients of benefits that were properly disallowed by the COA. These COA disallowances would otherwise have been deducted from their salaries, were it not for the fact that respondents retired before such deductions could be effected. The GSIS can no longer recover these amounts by any administrative means due to the specific exemption of retirement benefits from COA disallowances. Respondents resultantly retained benefits to which they were not legally entitled which, in turn, gave rise to an obligation on their part to return the amounts under the principle of solutio indebiti.

Under Article 2154 of the Civil Code,[30] if something is received and unduly delivered through mistake when there is no right to demand it, the obligation to return the thing arises. Payment by reason of mistake in the construction or application of a doubtful or difficult question of law also comes within the scope of solutio indebiti.[31] In the instant case, the confusion about the increase and payment of benefits to GSIS employees and executives, as well as its subsequent disallowance by the COA, arose on account of the application of RA 6758 or the Salary Standardization Law and its implementing rules, CCC No. 10. The complexity in the application of these laws is manifested by the several cases that have reached the Court since its passage in 1989.[32] The application of RA 6758 was made even more difficult when its implementing rules were nullified for non-publication.[33] Consequently, the delivery of benefits to respondents under an erroneous interpretation of RA 6758 gave rise to an actionable obligation for them to return the same. While the GSIS cannot directly proceed against respondents retirement benefits, it can nonetheless seek restoration of the amounts by means of a proper court action for its recovery. Respondents themselves submit that this should be the case,[34] although any judgment rendered therein cannot be enforced against retirement benefits due to the exemption provided in Section 39 of RA 8291. However, there is no prohibition against enforcing a final monetary judgment against respondents other assets and properties. This is only fair and consistent with basic principles of due process. As such, a proper accounting of the amounts due and refundable is in order. In rendering such accounting, the parties must observe the following guidelines: (1) All deductions from respondents retirement benefits should be refunded except those amounts which may properly be defined as monetary liability to the GSIS; (2) Any other amount to be deducted from retirement benefits must be agreed upon by and between the parties; and (3) Refusal on the part of respondents to return disallowed benefits shall give rise to a right of action in favor of GSIS before the courts of law. Conformably, any fees due to Atty. Sundiam for his professional services may be charged against respondents retirement benefits. The arrangement, however, must be covered by a proper agreement between him and his clients under (2) above. As to whether respondents are entitled to dividends on the provident fund contributions, the same is not within the issues raised before the Court. The second petition refers only to the legality of the deductions made by GSIS from respondents retirement benefits. There are factual matters that need to be threshed out in determining respondents right to the payment of dividends, in view of the GSIS assertion that the management contributions were not actually remitted to the fund. Thus, the payment of dividends should be the subject of a separate claim where the parties can present evidence to prove their respective assertions. The Court is in no position to resolve the matter since the material facts that would prove or disprove the claim are not on record. In the interest of clarity, we reiterate herein our ruling that there is no identity of subject matter between the COA proceedings, from which the first petition stemmed, and respondents claim of refund before the Board. While the first petition referred to the propriety of the COA disallowances per se, respondents claim before the Board pertained to the legality of deducting the COA disallowances from retirement benefits under Section 39 of RA 8291. Finally, on respondents claim that the GSIS acted in bad faith when it deducted the COA disallowances from their retirement benefits, except for bare allegations, there is no proof or evidence of the alleged bad faith and partiality of the GSIS. Moreover, the latter cannot be faulted for taking measures to ensure recovery of the COA disallowances since respondents have already retired and would be beyond its administrative reach. The GSIS merely acted upon its best judgment and chose to err in the side of prudence rather than suffer the consequence of not being able to account for the COA disallowances. It concededly erred in taking this recourse but it can hardly be accused of malice or bad faith in doing so. WHEREFORE, in view of the foregoing, the April 16, 2002 Decision in G.R. Nos. 138381 and 141625 is AMENDED. In addition to the refund of amounts corresponding to benefits allowed in G.R. No. 138381, the GSIS is ordered to REFUND all deductions from retirement benefits EXCEPT amounts representing monetary liability of the respondents to the GSIS as well as all other amounts mutually agreed upon by the parties. SO ORDERED. CEROFERR REALTY CORPORATION v. COURT OF APPEALS and ERNESTO D. SANTIAGO The Case This is an appeal via certiorari[1] from the decision of the Court of Appeals[2] dismissing petitioners appeal from the order[3] of the Regional Trial Court, Branch 93, Quezon City, which dismissed petitioners complaint for damages and injunction with preliminary injunction, as well as its resolution[4] denying reconsideration.[5]

FACTS: Petitioner Ceroferr Realty Corporation filed a suit against private respondent Ernesto Santiago for damages and injunction from dispute over the ownership of a land located in Quezon City. The complaint alleged that Santiago was occupying, without any right, a portion of a parcel of land belonging to Petitioner, which was being used by the former as a jeepney terminal. Private respondent, for his part, countered that he had the legal title to the land, thus, he had the right to utilize the land as such. During the trial, it was found out that the main issue of the case revolved around the actual bounds of the land owned by Petitioner. It appears that the title held by Petitioner merely referred to the land by its lot number, while the title held by private respondent was replete with technical descriptions and the accompanying metes and bounds of the lot. Private respondent then filed a motion to dismiss Petitioners complaint, on the ground that the trial court cannot pass upon the issue of damages without first determining the true ownership of the lot in question. The trial court then issued an order denying Petitioners complaint for lack of cause of action and lack of jurisdiction, holding that a Torrens certificate of title cannot be the subject of a collateral attack. Petitioner appealed then to the Court of Appeals, insisting that the complaint stated a cause of action which was determinable on its face. Such appeal was dismissed by the CA. ISSUE : (1) whether Ceroferrs complaint states a sufficient cause of action and (2) whether the trial court has jurisdiction to determine the identity and location of the vacant lot involved in the case. HELD : The Rules of Court require that the complaint must state a concise statement of the ultimate facts or the essential facts constituting the plaintiffs cause of action. A complaint states a cause of action only when it has its three indispensable elements, namely: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of plaintiff or constituting a breach of the obligation of defendant to the plaintiff for which the latter may maintain an action for recovery of damages. If these elements are not extant, the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action. These elements are present in the case at bar. A defendant who moves to dismiss the complaint on the ground of lack of cause of action, as in this case, hypothetically admits all the averments thereof. The test of sufficiency of the facts found in a complaint as constituting a cause of action is whether or not admitting the facts alleged the court can render a valid judgment upon the same in accordance with the prayer thereof. The hypothetical admission extends to the relevant and material facts well pleaded in the complaint and inferences fairly deducible therefrom. Hence, if the allegations in the complaint furnish sufficient basis by which the complaint can be maintained, the same should not be dismissed regardless of the defense that may be assessed by the defendants. In this case, petitioner Ceroferrs cause of action has been sufficiently averred in the complaint. If it were admitted that the right of ownership of petitioner Ceroferr to the peaceful use and possession of Lot 68 was violated by respondent Santiagos act of encroachment and fencing of the same, then petitioner Ceroferr would be entitled to damages. On the issue of jurisdiction, we hold that the trial court has jurisdiction to determine the identity and location of the vacant lot in question. Jurisdiction over the subject matter is conferred by law and is determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein.[16] The jurisdiction of a court over the subject matter is determined by the allegations of the complaint and cannot be made to depend upon the defenses set up in the answer or pleadings filed by the defendant.[17] While the lack of jurisdiction of a court may be raised at any stage of an action, nevertheless, the party raising such question may be estopped if he has actively taken part in the very proceedings which he questions and he only objects to the courts jurisdiction because the judgment or the order subsequently rendered is adverse to him.[18] In this case, respondent Santiago may be considered estopped to question the jurisdiction of the trial court for he took an active part in the case. In his answer, respondent Santiago did not question the jurisdiction of the trial court to grant the reliefs prayed for in the complaint. His geodetic engineers were present in the first and second surveys that the LRA conducted. It was only when the second survey report showed results adverse to his case that he submitted a motion to dismiss. Both parties in this case claim that the vacant lot is within their property. This is an issue that can be best resolved by the trial court in the exercise of its general jurisdiction. After the land has been originally registered, the Court of Land Registration ceases to have jurisdiction over contests concerning the location of boundary lines. In such case, the action in personam has to be instituted before an ordinary court of general jurisdiction.[19] The regional trial court has jurisdiction to determine the precise identity and location of the vacant lot used as a jeepney terminal. Hilado v Chavez Facts: Celso Nene Zayco was the owner of a large parcel of agricultural land located in Kabankalan City. The property was identified as Lot No. 343 and was covered by TCT No. 133298, and portions thereof were occupied and cultivated by tenants. Zayco mortgaged the property to the Pacific Banking Corporation as security for a loan; however, the bank foreclosed the mortgage upon Zaycos failure to

pay his account. When the property was sold at public auction by the sheriff, the bank was adjudged as the highest bidder. Zayco failed to redeem the property, and the bank consolidated its title thereon; TCT No. 115264 was issued in its favor on March 20, 1980.[3] On December 21, 1984, the bank sold the property to Julieta C. Salgado, the Chairman of the Board of the respondent, Perpetual Help Development and Realty Corporation (PHDRC). TCT No. 133298 was, thereafter, issued in favor of PHDRC on January 18, 1985. No liens or encumbrances whatsoever or any notice that the property had been placed under the agrarian reform laws were annotated at the dorsal portion thereof.[4] Subsequently, the DAR granted Emancipation Patents to the twenty (20) tenants on the property from April 28, 1988 to July 1, 1988 on the basis of which titles were issued in their favor during the period of September 16, 1988 to August 24, 1990.[5] The foregoing notwithstanding, the Sangguniang Bayan ng Kabankalan approved, on February 14, 1996, Resolution No. 96-39, reclassifying the property partly as property for light industry, and the rest as residential. On August 26, 1997, the respondent filed a complaint for unlawful detainer against the twenty (20) petitioners, who were all occupantsfarmers on the property, with the MTCC of Kabankalan City, docketed as Civil Case No. 034-97. In their answer with motion to dismiss the complaint, the petitioners, alleged that the landholding had long been placed under Operation Land Transfer, and that they became the owners thereof under Presidential Decree No. 27. The petitioners prayed that the complaint be dismissed for lack of jurisdiction over the subject matter of the action. The court a quo applied the Rules of Summary Procedure. Instead of ruling on the motion to dismiss, it ordered the parties to file their position papers. The court a quo rendered judgment in favor of the respondent which ordered the defendants to vacate the portions they had been occupying of Lot No. 343. Aggrieved, the petitioners filed a notice of appeal on the ground that grave errors were committed by the court a quo in its findings of facts and conclusions of law in its decision. A motion to disapprove the notice of appeal and for execution of final judgment was filed by the respondent on its claim that the required appellate docket and other lawful fees had not been paid to the clerk of court within the reglementary period therefor. The court a quo issued an Order granting the motion of the respondent and disapproved the notice of appeal filed by the petitioners. It also ordered the issuance of a writ of execution on its finding that its decision had become final and executory, following the failure of the petitioners to perfect their appeal to the RTC. On April 2, 1998 and April 21, 1998, writs of execution were issued by the MTCC. The petitioners did not assail the order of the MTCC. Instead, the petitioners filed a petition with the RTC against the respondent for the annulment of the decision of the MTC in Civil Case No. 034-97. The petitioners alleged, inter alia, that they were agricultural tenants of the late Cesar Zayco as evidenced by the receipts signed by him, where he acknowledged receipt of their rentals over the portions of the landholding tenanted by them, respectively, and the affidavit of Lorenzo Zayco, the son of Cesar Zayco. The petitioners asserted that the MTC had no jurisdiction over the subject matter of the action of the respondent in Civil Case No. 03497, it being an agrarian dispute between the petitioners, as patentees, and the respondent; hence, the court a quos decision was null and void. They contended that the Provincial Agrarian Reform Adjudicatory Board (PARAD) had exclusive jurisdiction over the action in Civil Case No. 034-97. The RTC found the petition sufficient in form and substance and directed the respondent to file its comment on or answer to the petition.[17] The RTC issued an Order declaring that the case involved only questions of law and not of facts, and ordered the parties to file their respective memoranda. The RTC rendered judgment dismissing the petition on the ground that the MTCC had exclusive jurisdiction over the action of the plaintiff in Civil Case No. 034-97 and over the persons of the defendants therein. The RTC also held that the petitioners failed to file a motion to dismiss the complaint in the MTCC and even participated in the proceedings therein; hence, they were estopped from assailing the jurisdiction of the MTCC. The petitioners filed a motion for reconsideration of the decision, but on June 26, 1998, the RTC issued an order denying the same. Issues: 1. Whether it is proper for the petitioners to file a petition for review under Rule 45 of the Rules of Court with this Court from the decision of the RTC; 2. Whether the MTCC had exclusive jurisdiction over the action of the respondent; and, 3. Whether the decision of the MTCC is null and void

Ruling: 1. We agree with the respondent that the remedy of a party aggrieved by the decision of the RTC, in the exercise of its original jurisdiction, is to appeal by writ of error to the Court of Appeals under Rule 41 of the Rules of Court, in which questions of facts and/or of law may be raised by the parties. However, under Section 2(c), Rule 41 of the Rules of Court, where only questions of law are raised or are involved, the appeal shall be to the Supreme Court by petition for review on certiorari under Rule 45 of the Rules. However, even if only questions or issues are raised by the party in his appeal, it should be made to the Court of Appeals and not to the Supreme Court, unless there are compelling reasons to allow such appeal. Suits may again be filed by the aggrieved parties in suits involving landholdings where the validity of the decision of the MTCC is assailed for lack of jurisdiction. 2. Section 33, paragraph 2 of Batas Pambansa Blg. 129, as amended by Section 3 of Rep. Act No. 7691 provides that MTC, MCTC, MeTC, have exclusive original jurisdiction over cases for unlawful detainer. The proceedings in ejectment cases are covered by Rule 70 of the Rules of Court and the Rules on Summary Procedure. However, such courts have no original jurisdiction to determine and adjudicate agrarian disputes under Rep. Act No. 6657, as amended, and the Rules of Procedure issued by the DARAB implementing said laws, which are within the exclusive original and appellate jurisdiction of the DARAB.

The DAR is vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive jurisdiction over all matters involving the implementation of agrarian reform programs. The rule is that the DARAB has jurisdiction to try and decide any agrarian dispute or any incident involving the implementation of the Comprehensive Agrarian Reform Program. The MTCC does not lose its jurisdiction over an ejectment case by the simple expedient of a party raising as a defense therein the alleged existence of a tenancy relationship between the parties. But it is the duty of the court to receive evidence to determine the allegations of tenancy. If after hearing, tenancy had in fact been shown to be the real issue, the court should dismiss the case for lack of jurisdiction. In this case, even on the basis of the material allegations of the complaint, more so if the answer with motion to dismiss the petition and position papers of the parties are considered, the DARAB, and not the MTCC, had primary and original jurisdiction over the action of the respondent. It is evident from the face of the complaint and the pleadings of the parties and the appendages thereof that the issue of possession of the subject property was inextricably interwoven with the issue of whether the Emancipation Patents issued by the DAR to the petitioners were valid. Under the DAR Rules of Procedure, the DARAB has primary and exclusive original jurisdiction over cases involving the issuance and cancellation of Emancipation Patents. Moreover, the respondent claimed possession over the property based on TCT No. 133298, which had already been partially cancelled by the Emancipation Patents and Torrens titles issued to the petitioners. 3. We reject the contention of the respondent that the decision of the MTCC had become final and executory because of the petitioners failure to perfect the appeal therefrom; hence, immutable. Neither do we agree with the respondents contention that by participating in the proceedings before the MTCC, the petitioners were estopped from assailing the jurisdiction of the MTCC.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The decisions of the Municipal Trial Court in Cities and the Regional Trial Court are SET ASIDE and declared NULL and VOID. The writ of execution issued by the MTCC is also set aside. No costs.

RUBEN AUGUSTO vs. HON. JUDGE TEODORO K. RISOS CALLEJO, SR., J.: This is a petition for certiorari under Rule 65 of the 1997 Rules of Court, as amended, filed by Ruben Augusto and Atty. Noel D. Archival, for the nullification of the December 5, 1997 Order[1] of the Regional Trial Court Branch 7, Lapu-Lapu City. Facts: Felisa Augusto and her siblings, Jose Augusto, Magdalena Augusto and Alfonso Augusto, all married, were the co-owners of a parcel of land, identified as Cadastral Lot No. 4429 located in Barrio Mactan, Opon, Cebu. The then Justice of the Peace and Ex-Officio Notary Public notarized a Deed of Absolute Sale where Felisa, Jose, Magdalena and Alfonso, all surnamed Augusto, sold the property to Guillermo Omolon for P200.00. Guillermo Omolon and his wife, Cleofe Omolon, caused the aforesaid document to be registered in the Office of the City Assessor of Lapu-Lapu City. Tax Declaration No. 02729 was issued thereafter, and the vendors took possession of the property. In the meantime, the property was registered in the names of Monico, Felisa, Jose, Filomeno, Teofilo and Sinfroso, all surnamed Augusto, under Original Certificate of Title (OCT) No. RO-3560. Guillermo Omolon died intestate and was survived by Cleofe Omolon.

Sometime in July 1995, Cleofe Omolon filed a petition for the reconstitution of the OCT covering Lot No. 4429, before the RTC of Lapu-Lapu City which the RTC rendered a decision granting the petition and thus directs the Register of Deeds of Lapu-Lapu City to reconstitute the OCT for Lot No. 4429 of the Cadastral Survey of Opon strictly in accordance with the technical description of said lot. However, upon presentation of the aforesaid order to the Office of the Register of Deeds of Lapu-Lapu City, Cleofe was informed that the owners copy had already been issued to Ruben Augusto, pursuant to an Order issued by the court and the same was in the possession of Atty. Noel Archival. Hence, Cleofe filed a petition before the RTC of Lapu-Lapu City alleging that as lawful co-owner and possessor of Lot No. 4429, she had every right to have and hold the owners duplicate of the said OCT. She prayed that after due proceedings, the respondents be ordered to surrender the owners copy of the said title. In their Comment on the petition, therein respondents alleged that the Deed of Absolute Sale executed by Felisa, Magdalena, Alfonso and Jose, all surnamed Augusto, was falsified and fictitious, and, thus, null and void. In the interim, Cleofe had her adverse claim annotated at the dorsal portion of the title in the Office of the Register of Deeds of Lapu-Lapu City. RTC issued an order directing Atty. Noel Archival to produce the owners copy of OCT No. 3560 to allow the annotation of Cleofes interest, upon which the owners duplicate copy of the title may thereafter be returned. The trial court declared that, based on the pleadings of the parties, the issue of ownership over the property had been raised, a matter which the court, sitting as a cadastral court, could not pass upon. The trial court further ruled that pending resolution of the issue of ownership over the property in an appropriate proceedings therefor, there was a need for the annotation of the petitioners interest over the property. The respondents therein filed a Motion for a Partial Reconsideration of the Order alleging that Cleofes interest over the property had been sufficiently protected by the annotation of her adverse claim. However, the court issued an Order denying the motion of the respondents therein. The respondents filed a notice of appeal from the said order to the Court of Appeals. On December 5, 1997, the RTC issued an order denying due course therefor, on its perception that the orders subject thereof were interlocutory; hence, not appealable. Issue: Whether or not the public respondent committed a grave abuse of discretion amounting to excess or lack of jurisdiction when it issued the assailed orders, and that there is no appeal nor any plain, speedy and adequate remedy in the ordinary course of law available to them Ruling: Section 1, Rule 41 of the Rules of Court provides that an appeal may be taken only from a final order, and not from an interlocutory one. A final order is one which disposes of the whole subject matter or terminates a particular proceeding or action, leaving nothing to be done but to enforce by execution what has been determined. An order or judgment is deemed final if it finally disposes of, adjudicates, or determines the rights, or some right or rights of the parties, either on the entire controversy or on some definite and separate branch thereof, and concludes them until it is reversed or set aside. Where no issue is left for future consideration, except the fact of compliance with the terms of the order, such order is final and appealable. In contrast, an order is interlocutory if it does not finally dispose of the case. In this case, the order of the public respondent directing the petitioners to produce the owners copy of OCT No. 3560 in the Office of the Register of Deeds for the annotation of the private respondents interest over the property is merely interlocutory and not final; hence, not appealable by means of a writ of error. The public respondent had not fully disposed of the case as it had not yet ruled on whether to grant the private respondents prayer for the surrender of the owners copy of OCT No. 3560. In fine, the assailed order of the respondent judge partook of the nature of an ad cautelam order. This is not to say that the respondent court sitting as a cadastral court had no jurisdiction to delve into and resolve the issue of ownership over the property. At any rate, we have also stated that the limited jurisdiction-rule governing land registration courts is subject to recognized exceptions, to wit, (1) where the parties mutually agreed or have acquiesced in submitting controversial issues for determination; (2) where they have been given full opportunity to present their evidence; and (3) where the court has considered the evidence already of record and is convinced that the same is sufficient for rendering a decision upon such controversial issues. By the same token, it has been held that the rule is not, in reality, one of jurisdiction, but rather, of mere procedure, which may be waived. Consequently, and specifically with reference to Section 112 of the Land Registration Act (now Section 108 of P.D. No. 1529), the court is no longer fettered by its former limited jurisdiction which enabled it to grant relief only in cases where there was unanimity among the parties or none of them raised any adverse claim o serious objection. Under the amended law, the court is now authorized to hear and decide not only such non-controversial cases but even the contentious and substantial issues, such as the question at bar, which were beyond its competence before. IN LIGHT OF ALL THE FOREGOING, the petition is DISMISSED.

TINITIGAN, EFREN TINITIGAN, ELSA TINITIGAN and SEVERINO TINITIGAN, JR vs. SEVERINO TINITIGAN, SR. and THE COURT OF APPEALS, respondents. MAKASIAR, J.: On April 22, 1975, Payumo and her three children, Efren, Elsa, and Severino Jr., all surnamed Tinitigan, leased to United Electronics Corporation a factory building together with the portion of land on which it is erected covered by TCT No. 160998 situated in Banwag, Paraaque, Rizal (pp. 17-20, rec., L-45418). In both transactions, the consent of Severino Tinitigan Sr., husband of Payumo and private responded herein, was not secured. Consequently, Tinitigan Sr., as conjugal partner and shareholder of Molave Development Corporation which is a family corporation filed a complaint which principally sought to annul the contract of lease executed by Payumo in favor of United Electronics Corporation The property involved in this contract is entirely different from that leased to Pentel with option to buy. The complaint, however, was later amended with leave of court to restrain the defendant-relatives of the plaintiff from encumbering or disposing properties in the name of the Molave Development Corporation or those in the name of Severino Tinitigan Sr. and Teofista Payuran; ... In the same order, the CFI of Rizal, Branch II enjoined petitioner from doing any "act to dispose, mortgage or otherwise encumber the properties described in paragraphs 7 and 8 of the complaint" and set the case for hearing on the issuance of a preliminary injunction. At the hearing of the preliminary injunction the issue of the contract of lease of lot covered by TCT 160998 which was the main object of the complaint was settled amicably. Severino Tinitigan Sr., however, filed a motion seeking judicial approval of sale of a two-storey residential house and a lot which are conjugal properties covered by TCT No. 15923. Tinitigan contends that the proposed sale of the property for P300,000.00 to Quintin who was given priority right to purchase, was necessary to pay outstanding conjugal obligations that were overdue in the amount of P256,137.79 and to forestall the foreclosure of mortgaged conjugal property. Earlier, the same property had been leased by Payumo to Pentel with an option to buy for P350,000.00. CFI Rizal granted Tinitigan the "authority to sell the house and lot covered by TCT No. 15923 in favor of Quintin Lim, if he is a Filipino citizen, for P300,000.00. An urgent motion for reconsideration was filed by Payumo and children alleging among others that the sale would result in substantial and tremendous losses because the property sought to be sold is a suitable condominium and/or hotel site and would, therefore, command a higher price. Two days after the MR, the wife Payumo filed against her husband Tinitigan a complaint for legal separation and dissolution of conjugal partnership before CFI Pasay Branch XXVIII. The CFI of Rizal issued an order denying petitioners' motion for reconsideration for lack of merit. A notice of appeal was filed by petitioners Payumo and children. By a deed of absolute, the husband Tinitigan apparently sold for P315,000.00 the Pasay property not to Quintin Lim but to herein private respondent Chiu Chin Siong (Chiu for short) who obtained a title thereto. Pursuantly, TCT No. 20031 was issued cancelling TCT No. 15923. A motion for the approval of the sale to Chiu was filed by respondent Tinitigan in the CFI of Rizal, Branch 11 which the said court approved the sale executed by Tinitigan Sr. in favor of Chiu for and in consideration of the sum of P315,000.00. The same court denied the appeal filed by petitioners Payumo and children. Payumo and children filed a petition for certiorari with preliminary injunction against respondents Tinitigan and the Honorable Pedro C. Navarro in the CA which in return rendered its decision upholding the orders of respondent Judge. Private respondent Chiu filed before the City Court, Branch III, at Pasay City, presided by judge Pablo M. Malvar, a compliant for unlawful detainer seeking an order to compel defendant therein, Quintin C. Lim to vacate the premises in question. Quintin C. Lim filed his answer with motion to dismiss denying that he 'was the lessee of the properly and moving to dismiss the detainer action for lack of jurisdiction, the issue of ownership not being capable of decision without resolving the issue of ownership pending in other courts. Issue: Whether or not the Respondent Judge had not acquired jurisdiction over the premises and could not grant Tinitigan authority to sell them Ruling: Petitioners argue that the order authorizing Tinitigan to sell the Loring property is void; firstly, because Tinitigan had no authority to sell the premises, they being under the administration of Payuran. This contention is without legal basis. Article 165 of the New Civil Code decrees that "the husband is the administrator of the conjugal partnership." This is the general rule. However, the said provisions are not applicable in the instant case. The husband is the administrator of the conjugal partnership. This is a right clearly granted to him by law. More, the husband is the sole administrator. The wife is not entitled as of right to joint administration. The husband may even enforce right of possession against the wife who has taken over the administration without his consent. And the wife may be punished for contempt for her refusal to deliver to him the conjugal assets. She may be required to render full and complete accounting of such properties.

Necessarily, the conclusion is that Tinitigan Sr. had not ceased being the administrator of their conjugal properties at the time the motion for judicial approval of sale was granted. Being administrator, however, does not give him outright authority to alienate or encumber conjugal assets. This kind of transactions requires the express or implied consent of the wife subject to certain exceptions such as Article 166 NCC but this article shall not apply to property acquired by the conjugal partnership before the effective date of this Code. This was precisely the reason why respondent Tinitigan Sr. sought judicial approval of sale of the Loring property. The filing of the said motion was, in fact, directed by a legal provision since it became almost impossible for private respondent to obtain his wife's consent to the sale which transaction has not proven to be fraudulent. It must be noted that Payumo did not dispute the existence of these conjugal liabilities. What she questioned, in reality, was the propriety of the sale of the disputed property, which, according to petitioners, has bright prospects of development and market value appreciation in the future. It was a 'choice lot' as termed by them. Nevertheless, the sale was the surest and the most practical means resorted to by respondent Tinitigan Sr. to save them from a serious financial setback. Secondly, petitioners contend that the questioned order is void because respondent Judge had not acquired jurisdiction over the premises and could not grant Tinitigan Sr. authority to sell them. They would seem to capitalize on the fact that the complaint in Civil Case No. 21277 particularly mentioned only the lot covered by TCT No. 160998 leased to United Electronics Corporation. Petitioners failed to note, however, that in the amended complaint, respondents prayed among others "to restrain the defendant-relatives of the plaintiff from encumbering or disposing properties in the name of the Molave Development Corporation or those in the name of Severino Tinitigan Sr, and Teofista Payuran." This, in effect, brings the Loring property by TCT No. 15923 within the jurisdiction of the court which issued the order. Certainly, a motion in relation thereto is but proper. Furthermore, it is worth repeating that the said motion to seek judicial approval of sale in lieu of marital consent amounts to compliance with legal requirement delineated in Article 166, supra. The issuance of the order dated September 29, 1975 was, henceforth, pursuant to a validly acquired jurisdiction, in keeping with a well-entrenched principle that "jurisdiction over the subject matter is conferred by law. It is determined by the allegations of the complaint, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein - a matter that can be resolved only after and as a result of the trial. Nor may the jurisdiction of the court be made to depend upon the defenses set up in the answer or upon the motion to dismiss, for, were we to be governed by such rule, the question of jurisdiction would depend almost entirely upon the defendant. But it is necessary that jurisdiction be properly involved or called into activity by the firing of a petition, complaint or other appropriate pleading. Nothing can change the jurisdiction of the court over the subject matter. None of the parties to the litigation can enlarge or diminish it or dictate when it shall be removed. That power is a matter of legislative enactment which none but the legislature may change" (Moran, Comments on the Rules of Court, Vol. I, 1970 ed., pp. 37-38). In addition, records further disclose that the action for legal separation and dissolution of conjugal partnership was filed almost right after the order of September 29, 1975 in Civil Case No. 21277 was issued. As can be gleaned from the facts, the filing of Civil Case No. 4459-P was apparently a tactical maneuver intended to frustrate the order of September 29, 1975 issued by respondent Judge Navarro granting Tinitigan Sr. authority to sell the Loring property. Aptly, however, the order of October 29, 1975 made the appointment of Payumo as administrative subject to the condition "that the disposition of the property located at Loring St., Pasay City shall be subeject to the decision of the Court of First Instance of Rizal Branch II, Pasig, Rizal." There can be no clearer indication of the validity of the questioned order, as far as jurisdiction is concerned, than the latter court's own recognition of the jurisdiction priorly acquired by the court issuing it. The well-settled rule that "jurisdiction once acquired continues until the case is finally terminated" is hereby observed (Republic vs. Central Surety and Ins. Co., 25 SCRA 641[1968]). "The jurisdiction of a court depends upon the state of facts existing at the time it is invoked, and if the jurisdiction once attaches to the person and subject matter of the litigation, the subsequent happening of events, although they are of such a character as would have prevented jurisdiction from attaching in the first innocence, will not operate to oust jurisdiction almdy attached" (Ramos vs. Central Bank of the Philippines, 41 SCRA 565, 583 [1971]). Consequently, there is no merit in the assertion of petitioner that it is the Court of First Instance of Rizal at Pasay City, Branch XXVIII which should have assumed jurisdiction over the disputed property upon the filing of the complaint for legal separation and dissolution of conjugal partnership To permit this would result in the disregard of the order of September 29, 1975 issued by the Court of First Instance of Rizal, in Pasig, Branch II. Not even the court whose jurisdiction is being invoked sanctions this seeming attempt to contravene sound doctrines and long-standing principles. MODESTA CALIMLIM AND LAMBERTO MAGALI vs. HON. PEDRO A. RAMIREZ and FRANCISCO RAMOS FACTS: Judgment for a sum of money and a writ of execution was rendered in favor of Independent Mercantile Corporation against a certain Manuel Magali. The Notice of Levy made on a parcel of land registered in the name of "Domingo Magali, married to Modesta Calimlim", specified that the said levy was only against "all rights, title, action, interest and participation of the defendant Manuel Magali over the parcel of land described in this title." However, when the Sheriff issued the final Deed of Sale, it was erroneously stated therein that the sale was with respect to "the parcel of land described in this title" and not only over the rights and interest of Manuel Magali in the same. The execution of the said final Deed of Sale was annotated at the back of said title. Petitioner Modesta Calimlim, surviving spouse of Domingo Magali, filed a petition with the respondent Court praying for the cancellation of the TCT. An opposition to the said petition was filed by Independent Mercantile Corporation. After the parties submitted their respective Memoranda, the respondent Court issued an Order dismissing the petition. The herein petitioners did not appeal the dismissal of the petition as they filed for the cancellation of the TCT. Instead, they filed a complaint praying for the cancellation of the

conveyances and sales that had been made on the property previously registered in the name of Domingo Magali, herein private respondent Francisco Ramos who claimed to have bought the property from Independent Mercantile Corporation. Private respondent Francisco Ramos failed to obtain a title over the property in his name in view of the existence of an adverse claim annotated on the title thereof at the instance of the herein petitioners. Private respondent Francisco Ramos filed a Motion to dismiss on the ground that the same is barred by prior judgment or by statute of limitations. Resolving the said Motion, the respondent Court, dismissed Civil Case on the ground of estoppel by prior judgment. A Motion for reconsideration filed by the petitioners was denied by the respondent Judge. A second Motion for reconsideration was similarly denied. ISSUE: Whether or not the dismissal of civil case can be annulled and set aside. HELD: It is neither fair nor legal to bind a party by the result of a suit or proceeding which was taken cognizance of in a court which lacks jurisdiction over the same irrespective of the attendant circumstances. The equitable defense of estoppel requires knowledge or consciousness of the facts upon which it is based. The same thing is true with estoppel by conduct which may be asserted only when it is shown, among others, that the representation must have been made with knowledge of the facts and that the party to whom it was made is ignorant of the truth of the matter. The inequity of barring the petitioners from vindicating their right over their property in the Civil Case is rendered more acute in the face of the undisputed fact that the property in question admittedly belonged to the petitioners, and that the title in the name of the private respondent was the result of an error committed by the Provincial Sheriff in issuing the deed of sale in the execution proceeding. The Motion to Dismiss filed by the private respondent shall be deemed denied and the respondent Court is ordered to conduct further proceedings in the case. FRANCEL REALTY CORPORATION vs. RICARDO T. SYCIP Facts: In November, 1989, petitioner and respondent entered into a contract to sell a house and lot covered. Upon execution of the contract to sell, respondent made a down payment of P119,700.00. The townhouse subject of the contract to sell was transferred in the name of respondent as evidenced by TCT No. T-281788. Despite the transfer of the title in the name of respondent, the latter refused to pay the balance of P250,000.00. Despite several demands made by petitioner to respondent, the respondent refused to reconvey the subject property to petitioner. Petitioner then a filed a case against respondent and a motion to dismiss was filed by the latter in the ground of lack of jurisdiction. After trial, the court below dismissed the case for lack of jurisdiction. The CA held that the case involved not just reconveyance and damages, but also a determination of the rights and obligations of the parties to a sale of real estate under PD 957; hence, the case fell exclusively under the jurisdiction of the HLURB. The appellate court observed that respondent and other buyers of the townhouses had notified petitioner of their intention to stop paying amortizations because of defective structures and materials used in the construction; they had in fact filed other cases, also before the HLURB, against petitioner for unsound real estate business practice. Issues: Whether or not the lower court can dismiss, after full blown trial, Civil Case No. BCV-94-2 on the ground of lack of jurisdiction. Ruling: The Petition lacks merit. Petitioner contends that the lack of jurisdiction could no longer be used as a ground for dismissal after trial had ensued and ended. In Tijam vs. Sibonghanoy, a party may be barred from questioning a court's jurisdiction after being invoked to secure affirmative relief against its opponent. Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is analogous to that in the cited case. In such controversies, laches should be clearly present; that is, lack of jurisdiction must have been raised so belatedly as to warrant the presumption that the party entitled to assert it had abandoned or declined to assert it. The general rule remains: a court's lack of jurisdiction may be raised at any stage of the proceedings, even on appeal. The reason is that jurisdiction is conferred by law, and lack of it affects the very authority of the court to take cognizance of and to render judgment on the action. Moreover,jurisdiction is determined by the averments of the complaint, not by the defenses contained in the answer. Rule 9 of the Rules of Court requires that all defenses and objections -- except lack of jurisdiction over the subject matter, litis pendentia, bar by prior judgment and/or prescription -- must be pleaded in a motion to dismiss or in an answer; otherwise, they are deemed waived. [20] As to the excepted grounds, the court may dismiss a claim or a case at any time 'when it appears from the pleadings or the evidence on record that any of those grounds exists. The Court has ruled that a suit to collect on a promissory note issued by a subdivision lot buyer involves the 'sales of lots in commercial subdivisions' ; and that jurisdiction over such case lies with the HLURB, not with the courts. Petitioner avers that the present controversy is not cognizable by the HLURB, because it was filed by the developer rather than by the buyer, as provided under PD No. 1344. The action here is not a simple action to collect on a promissory note; it is a complaint to collect

amortization payments arising from or in connection with a sale of a subdivision lot under P.D. Nos. 957 and 1344, and accordingly falls within the exclusive original jurisdiction of the HLURB to regulate the real estate trade and industry, and to hear and decide cases of unsound real estate business practices. Contrary to petitioner's contention, the HLURB is not deprived of jurisdiction to hear and decide a case merely on the basis that it has been initiated by the developer and not by the buyer. SUN INSURANCE OFFICE V. HON. MAXIMIANO C. ASUNCION, Presiding Judge and MANUEL CHUA UY PO TIONG. FACTS: Petitioner Sun Insurance Office filed a complaint for the consignation of a premium refund on a fire insurance policy with a prayer for the judicial declaration of its nullity against private respondent Manuel Uy Po Tiong. Private respondent was declared in default for failure to file the required answer within the reglementary period. On the other hand, private respondent filed a complaint for the refund of premiums and the issuance of a writ of preliminary attachment against petitioner. Although the prayer in the complaint did not quantify the amount of damages sought said amount may be inferred from the body of the complaint to be about Fifty Million Pesos. Only the amount of P21O.OO was paid by private respondent as docket fee which prompted petitioners' counsel to raise his objection, which was disregarded by respondent Judge. The Court thereafter returned the said records to the trial court with the directive that they be re-raffled to the other judges to the exclusion of Judge Castro. The Court issued a Resolution directing the judges to reassess the docket fees and requires all clerks of court to issue certificates of re-assessment of docket fees. All litigants were likewise required to specify in their pleadings the amount sought to be recovered. Judge Maximiano Asuncion, to whom Civil Case was thereafter assigned, issued an Order requiring the parties in the case to comment on the Clerk of Court's letterreport. Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judge Asuncion. Court of Appeals rendered a decision ruling, among others, Denying due course to the petition insofar as it seeks annulment of the order ISSUE: Whether or not a court acquires jurisdiction over a case when the correct and proper docket fee has not been paid. HELD: 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. 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. The petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is instructed to reassess and determine the additional filing fee that should be paid by private respondent considering the total amount of the claim sought in the original complaint and the supplemental complaint as may be gleaned from the allegations and the prayer thereof and to require private respondent to pay the deficiency. Manchester ruling applies, with modification. Statutes regulating the procedure of courts will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws are retrospective in that sense and in that respect. The Court dismissed petitioners motion and ordered the Clerk of court to re-asses the docket fees. Personal Observation: The case is different in Manchester because the respondent herein has shown compliance by paying docket fees upon reassessment and has also paid the docket fees on its amended complaint increasing the claim for damages. Furthermore, there is no substantial evidence that the respondent has the intention of deliberately defraud the court or evaded the payment of docket fees TACAY vs. REGIONAL TRIAL COURT OF TAGUM Davao del Norte Facts: Three actions for recovery of possession (acciones publicianas) were separately instituted by Godofredo Pineda against three (3) defendants ( Noel, Panes and Tacay) alleging that Pineda was the owner of a parcel of land ; occupation by the defendants were by mere tolerance; and had made demands on the defendants to vacate the property and pay reasonable rentals but were refused. Motions to dismiss were filed by defendants alleging that the Trial Court had not acquired jurisdiction of the case on ground that the complaint failed to specify the amount of damages which the plaintiff is claiming. However, these motions were dismissed by Judge Matas and Hernandez. Aggrieved, defendants filed "Joint Petition" for certiorari, prohibition and mandamus, with prayer for temporary restraining order and/or writ of preliminary prohibitory injunction," praying essentially that said orders be annulled and respondent judges directed to dismiss all the complaints "without prejudice to private respondent Pineda's re-filing a similar complaint that complies with Circular No. 7." The joint petition is hereby dismissed. Issue: Whether the trial court has jurisdiction over the three actions on ground that it failed to state the amounts being claimed as actual, moral and nominal damages and failure to comply with SC Circular No. 7 Ruling: It is true that the complaints do not state the amounts being claimed as actual, moral and nominal damages. It is also true, however, that the actions are not basically for the recovery of sums of money. They are principally for recovery of possession of real property, in the nature of an accion publiciana. Determinative of the court's jurisdiction in this type of actions is the nature thereof, not the amount of

the damages allegedly arising from or connected with the issue of title or possession, and regardless of the value of the property. Quite obviously, an action for recovery of possession of real property (such as an accion plenaria de possesion) or the title thereof, or for partition or condemnation of, or the foreclosure of a mortgage on, said real property - in other words, a real action-may be commenced and prosecuted without an accompanying claim for actual, moral, nominal or exemplary damages; and such an action would fall within the exclusive, original jurisdiction of the Regional Trial Court. Circular No. 7 of this Court, dated March 24, 1988, cannot thus be invoked, as the petitioner does, as authority for the dismissal of the actions at bar. As will be noted, the requirement in Circular No. 7 that complaints, petitions, answers, and similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, has not been altered. What has been revised is the rule that subsequent "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 trial court now being authorized to allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. Moreover, a new rule has been added, governing awards of claims not specified in the pleading - i.e., 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. Now, under the Rules of Court, docket or filing fees are assessed on the basis of the "sum claimed," on the one hand, or the "value of the property in litigation or the value of the estate," on the other. There are, in other words, as already above intimated, actions or proceedings involving real property, in which the value of the property is immaterial to the court's jurisdiction, account thereof being taken merely for assessment of the legal fees; and there are actions or proceedings, involving personal property or the recovery of money and/or damages, in which the value of the property or the amount of the demand is decisive of the trial court's competence (aside from being the basis for fixing the corresponding docket fees). 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. In this case, the complaint or similar pleading should, according to Circular No. 7 of this Court, "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." Where the action involves real property and a related claim for damages as well, the legal fees shall be assessed on the basis of both (a) the value of the property and (b) the total amount of related damages sought. The Court acquires jurisdiction over the action if the filing of the initiatory pleading is accompanied by the payment of the requisite fees, or, if the fees are not paid at the time of the filing of the pleading, as of the time of full payment of the fees within such reasonable time as the court may grant, unless, of course, prescription has set in the meantime. But where-as in the case at bar-the fees prescribed for an action involving real property have been paid, but the amounts of certain of the related damages (actual, moral and nominal) being demanded are unspecified, the action may not be dismissed. The Court undeniably has jurisdiction over the action involving the real property, acquiring it upon the filing of the complaint or similar pleading and payment of the prescribed fee. And it is not divested of that authority by the circumstance that it may not have acquired jurisdiction over the accompanying claims for damages because of lack of specification thereof. What should be done is simply to expunge those claims for damages as to which no amounts are stated, which is what the respondent Courts did, or allow, on motion, a reasonable time for the amendment of the complaints so as to allege the precise amount of each item of damages and accept payment of the requisite fees therefor within the relevant prescriptive period. ALDAY vs. FGU INSURANCE CORPORATION Facts: Respondent FGU filed a complaint with the RTC for collection of sum f money in the amount of P114, 650.76, representing unliquidated cash advances, unremitted cost of premiums and other charges incurred by petitioner in the course of her work or insurance agent for respondent. Petitioner in her answer and by way of counterclaim demanded the payment of earned commissions and bonuses in the total amount of P104, 893.45 and for accumulated reserves amounting to P500, 000.00. She also prayed for attorneys fees, litigation expenses, moral damages and exemplary damages for allegedly unfounded action filed by respondent. Respondent filed a motion to dismiss petitioners counterclaim, contending that the trial court never acquired jurisdiction over the same because of the non-payment of docket fees. In response, petitioner asked the trial court to declare her counterclaim as exempt from paying of docket fees since it is compulsory and that respondent be declared in default for failure to answer her counterclaim. The trial court granted respondents motion to dismiss petitioners counterclaim and consequently, denied petitioners motion. The court found petitioners counterclaim to be merely permissive in nature and held that petitioners failure to pay docket fess prevented the court from acquiring jurisdiction over the same. The court of appeals sustained the trail court, finding the petitioners own admission. As contained in her answer, show that her counterclaim is merely permissive. Issue and Ruling: Docket Fees; Non-payment of; When may be raised. - Before going into the substantive issues, the Court shall first dispose of some procedural matters raised by the parties. Petitioner claims that respondent is estopped from questioning her non-payment of docket fees because it did not raise this particular issue when it filed its first motion - the Motion to Strike out Answer With Compulsory Counterclaim And To Declare Defendant In Default with the trial court; rather, it was only nine months after receiving petitioners answer that respondent assailed the trial courts lack of jurisdiction over petitioners counterclaims based on the latters failure to pay docket fees. Petitioners position is unmeritorious. Estoppel by laches arises from the negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned or declined to assert it. In the case at bar, respondent cannot be considered as estopped from assailing the trial courts jurisdiction over petitioners

counterclaim since this issue was raised by respondent with the trial court itself the body where the action is pending - even before the presentation of any evidence by the parties and definitely, way before any judgment could be rendered by the trial court. Jurisdiction; May be raised at any stage of the action; Exception. -Meanwhile, respondent questions the jurisdiction of the Court of Appeals over the appeal filed by petitioner from the 18 September 1990 and 28 February 1991 orders of the trial court. It is significant to note that this objection to the appellate courts jurisdiction is raised for the first time before this Court; respondent never having raised this issue before the appellate court. Although the lack of jurisdiction of a court may be raised at any stage of the action, a party may be estopped from raising such questions if he has actively taken part in the very proceedings which he questions, belatedly objecting to the courts jurisdiction in the event that that the judgment or order subsequently rendered is adverse to him. In this case, respondent actively took part in the proceedings before the Court of Appeals by filing its appellees brief with the same. Its participation, when taken together with its failure to object to the appellate courts jurisdiction during the entire duration of the proceedings before such court, demonstrates a willingness to abide by the resolution of the case by such tribunal and accordingly, respondent is now most decidedly estopped from objecting to the Court of Appeals assumption of jurisdiction over petitioners appeal. Desposition: The assailed Decision of the Court of Appeals promulgated on 23 December 1998 and its 19 May 1999 Resolution are hereby MODIFIED. The compulsory counterclaim of petitioner for damages filed in Civil Case No. 89-3816 is ordered REINSTATED. Meanwhile, the Regional Trial Court of Makati (Branch 134) is ordered to require petitioner to pay the prescribed docket fees for her permissive counterclaim (direct commissions, profit commissions, contingent bonuses and accumulated premium reserves), after ascertaining that the applicable prescriptive period has not set in. AYALA CORPORATION vs. MADAYAG FACTS: Private respondents filed against petitioners an action for specific performance with damages in the Regional Trial Court of Makati. Petitioners filed a motion to dismiss on the ground that the lower court has not acquired jurisdiction over the case as private respondents failed to pay the prescribed docket fee and to specify the amount of exemplary damages both in the body and prayer of the amended and supplemental complaint. The trial court denied the motion. A motion for reconsideration filed by petitioners was likewise denied. The main thrust of the petition is that private respondent paid only the total amount of P l,616.00 as docket fees instead of the amount of P13,061.35 based on the assessed value of the real properties involved as evidenced by its tax declaration. Further, petitioners contend that private respondents failed to specify the amount of exemplary damages sought both in the body and the prayer of the amended and supplemental complaint. ISSUES: Whether or not the RTC acquire jurisdiction for not specifying the correct amount of docket fees. HELD: The trial court may either order said claim to be expunged from the record as it did not acquire jurisdiction over the same or on motion, it may allow, within a reasonable time, the amendment of the amended and supplemental complaint so as to state the precise amount of the exemplary damages sought and require the payment of the requisite fees therefore within the relevant prescriptive period. As ruled in Tacay the trial court may either order said claim to be expunged from the record as it did not acquire jurisdiction over the same or on motion, it may allow, within a reasonable time, the amendment of the amended and supplemental complaint so as to state the precise amount of the exemplary damages sought and require the payment of the requisite fees therefor within the relevant prescriptive period. The trial court is directed either to expunge from the record the claim for exemplary damages in the amended and supplemental complaint, the amount of which is not specified, or it may otherwise, upon motion, give reasonable time to private respondents to amend their pleading by specifying its amount and paying the corresponding docketing fees within the appropriate reglementary or prescriptive period. FIGUEROA vs. PEOPLE OF THE PHILIPPINES SUBJECT AREA: Estoppel by laches NATURE: Petition for review on certiorari FACTS: Petitioner was charged with the crime of reckless imprudence resulting in homicide. The RTC found him guilty. In his appeal before the CA, the petitioner, for the first time, questioned RTCs jurisdiction on the case. The CA in affirming the decision of the RTC, ruled that the principle of estoppel by laches has already precluded the petitioner from questioning the jurisdiction of the RTCthe trial went on for 4 years with the petitioner actively participating therein and without him ever raising the jurisdictional infirmity.

The petitioner, for his part, counters that the lack of jurisdiction of a court over the subject matter may be raised at any time even for the first time on appeal. As undue delay is further absent herein, the principle of laches will not be applicable. Hence, this petition. ISSUE: WON petitioners failure to raise the issue of jurisdiction during the trial of this case, constitute laches in relation to the doctrine laid down in Tijam v. Sibonghanoy, notwithstanding the fact that said issue was immediately raised in petitioners appeal to the CA HELD: No. RATIO: Citing the ruling in Calimlim vs. Ramirez, the Court held that as a general rule, the issue of jurisdiction may be raised at any stage of the proceedings, even on appeal, and is not lost by waiver or by estoppel. Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is analogous to that of Tijam v. Sibonghanoy. Laches should be clearly present for the Sibonghanoy doctrine to be applicable, that is, lack of jurisdiction must have been raised so belatedly as to warrant the presumption that the party entitled to assert it had abandoned or declined to assert it. In Sibonghanoy, the party invoking lack of jurisdiction did so only after fifteen years and at a stage when the proceedings had already been elevated to the CA. Sibonghanoy is an exceptional case because of the presence of laches. In the case at bar, the factual settings attendant in Sibonghanoy are not present. Petitioner Atty. Regalado, after the receipt of the Court of Appeals resolution finding her guilty of contempt, promptly filed a Motion for Reconsideration assailing the said courts jurisdiction based on procedural infirmity in initiating the action. Her compliance with the appellate courts directive to show cause why she should not be cited for contempt and filing a single piece of pleading to that effect could not be considered as an active participation in the judicial proceedings so as to take the case within the milieu of Sibonghanoy. Rather, it is the natural fear to disobey the mandate of the court that could lead to dire consequences that impelled her to comply. The petitioner is in no way estopped by laches in assailing the jurisdiction of the RTC, considering that he raised the lack thereof in his appeal before the appellate court. At that time, no considerable period had yet elapsed for laches to attach. DISPOSITIVE: Petition for review on certiorari is granted. Criminal case is dismissed. TIJAM vs. SIBONGHANOY (23 SCRA 29) FACTS: Tijam filed for recovery of P1,908 + legal interest from Sibongahanoy. Defendants filed a counter bond with Manila Surety and Fidelity Co (Surety). Judgement was in favour of the plaintiffs, a writ of execution was issued against the defendant. Defendants moved for writ of execution against surety which was granted. Surety moved to quash the writ but was denied, appealed to CA without raising the issue on lack of jurisdiction. CA affirmed the appealed decision. Surety then filed Motion to Dismiss on the ground of lack of jurisdiction against CFI Cebu in view of the effectivity of Judiciary Act of 1948 a month before the filing of the petition for recovery. Act placed original exclusive jurisdiction of inferior courts all civil actions for demands not exceeding 2,000 exclusive of interest. CA set aside its earlier decision and referred the case to SC since it has exclusive jurisdiction over "all cases in which the jurisdiction of any inferior court is in issue. ISSUE: WON Surety bond is estopped from questioning the jurisdiction of the CFI Cebu for the first time upon appeal.YES RATIO: SC believes that that the Surety is now barred by laches from invoking this plea after almost fifteen years before the Surety filed its motion to dismiss raising the question of lack of jurisdiction for the first time - A party may be estopped or barred from raising a question in different ways and for different reasons. Thus we speak of estoppel in pais, or estoppel by deed or by record, and of estoppel by laches. Laches, in a general sense is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier - Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court "undesirable practice" of a party submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse. : Other merits on the appeal : The surety insists that the lower court should have granted its motion to quash the writ of execution because the same was issued without the summary hearing - Summary hearing is "not intended to be carried on in the formal manner in which ordinary actions are prosecuted" (83 C.J.S. 792). It is, rather, a procedure by which a question is resolved "with dispatch, with the least possible delay, and in preference to ordinary legal and regular judicial proceedings" (Ibid, p. 790). What is essential is that "the defendant is notified or summoned to appear and is given an opportunity to hear what is urged upon him, and to interpose a defense, after which follows an adjudication of the rights of the parties - In the case at bar, the surety had been notified of the plaintiffs' motion for execution and of the date when the same would be submitted for consideration. In fact, the surety's counsel was present in court when the motion was called, and it was upon his request that the court a quo gave him a period of four days within which to file an

answer. Yet he allowed that period to lapse without filing an answer or objection. The surety cannot now, therefore, complain that it was deprived of its day in court. The orders appealed from are affirmed. MANCHESTER DEVT. CORP. VS. CA Facts: Petitioners in support of their contention that the filing fee must be assessed on the basis of the amended complaint cite the case of Magaspi vs. Ramolete. They contend that the Court of Appeals erred in that the filing fee should be levied by considering the amount of damages sought in the original complaint. The environmental facts of said case differ from the present. 1. The Magaspi case was an action for recovery of ownership and possession of a parcel of land with damages. While the present case is an action for torts and damages and specific performance with prayer for temporary restraining order, etc. 2. In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of the defendant to the property, the declaration of ownership and delivery of possession thereof to plaintiffs but also asks for the payment of actual moral, exemplary damages and attorney's fees arising therefrom in the amounts specified therein. However, in the present case, the prayer is for the issuance of a writ of preliminary prohibitory injunction during the pendency of the action against the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for the property in question, to attach such property of defendants that maybe sufficient to satisfy any judgment that maybe rendered, and after hearing, to order defendants to execute a contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff, ordering defendants jointly and severally to pay plaintiff actual, compensatory and exemplary damages as well as 25% of said amounts as maybe proved during the trial as attorney's fees and declaring the tender of payment of the purchase price of plaintiff valid and producing the effect of payment and to make the injunction permanent. The amount of damages sought is not specified in the prayer although the body of the complaint alleges the total amount of over P78 Million as damages suffered by plaintiff. 3. Upon the filing of the complaint there was an honest difference of opinion as to the nature of the action in the Magaspi case. The complaint was considered as primarily an action for recovery of ownership and possession of a parcel of land. The damages stated were treated as merely to the main cause of action. Thus, the docket fee of only P60.00 and P10.00 for the sheriff's fee were paid. 4. When this under-re assessment of the filing fee in this case was brought to the attention of this Court together with similar other cases an investigation was immediately ordered by the Court. Meanwhile plaintiff through another counsel with leave of court filed an amended complaint on September 12, 1985 for the inclusion of Philips Wire and Cable Corporation as coplaintiff and by emanating any mention of the amount of damages in the body of the complaint. The prayer in the original complaint was maintained. After this Court issued an order on October 15, 1985 ordering the re- assessment of the docket fee in the present case and other cases that were investigated, on November 12, 1985 the trial court directed plaintiffs to rectify the amended complaint by stating the amounts which they are asking for. It was only then that plaintiffs specified the amount of damages in the body of the complaint in the reduced amount of P10,000,000.00. Still no amount of damages were specified in the prayer. Said amended complaint was admitted. On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay the amount of P3,104.00 as filing fee covering the damages alleged in the original complaint as it did not consider the damages to be merely an or incidental to the action for recovery of ownership and possession of real property. An amended complaint was filed by plaintiff with leave of court to include the government of the Republic as defendant and reducing the amount of damages, and attorney's fees prayed for to P100,000.00. Said amended complaint was also admitted. Issue: 1. Whether the original complaint or the amended complaint should be the basis of the computation of the docketing fee? 2. Whether or not an amendment of the complaint will thereby vest jurisdiction in the court? Ruling: 1. The docketing fee should be assessed by considering the amount of damages as alleged in the original complaint. In the Magaspi case, the action was considered not only one for recovery of ownership but also for damages, so that the filing fee for the damages should be the basis of assessment. Although the payment of the docketing fee of P60.00 was found to be insufficient, nevertheless, it was held that since the payment was the result of an "honest difference of opinion as to the correct amount to be paid as docket fee" the court "had acquired jurisdiction over the case and the proceedings thereafter had were proper and regular." Hence, as the amended complaint superseded the original complaint, the allegations of damages in the amended complaint should be the basis of the computation of the filing fee. In the present case no such honest difference of opinion was possible as the allegations of the complaint, the designation and the prayer show clearly that it is an action for damages and specific performance. The docketing fee should be assessed by considering the amount of damages as alleged in the original complaint. 2. As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in court. Thus, in the present case the trial court did not acquire jurisdiction over the case by the payment of only P410.00 as docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the Court. For an legal purposes there is no such original complaint that was duly filed which could be amended. Consequently, the order admitting the amended complaint and all subsequent proceedings and actions taken by the trial court are null and void.

The Court frowns at the practice of counsel who filed the original complaint in this case of omitting any specification of the amount of damages in the prayer although the amount of over P78 million is alleged in the body of the complaint. This is clearly intended for no other purpose than to evade the payment of the correct filing fees if not to mislead the docket clerk in the assessment of the filing fee. This fraudulent practice was compounded when, even as this Court had taken cognizance of the anomaly and ordered an investigation, petitioner through another counsel filed an amended complaint, deleting all mention of the amount of damages being asked for in the body of the complaint. It was only when in obedience to the order of this Court of October 18, 1985, the trial court directed that the amount of damages be specified in the amended complaint, that petitioners' counsel wrote the damages sought in the much reduced amount of P10,000,000.00 in the body of the complaint but not in the prayer thereof. The design to avoid payment of the required docket fee is obvious. To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any pleading that fails to comply with this requirement shall not bib accepted nor admitted, or shall otherwise be expunged from the record.