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G.R. No. 168696. February 28, 2006. *

MA. LUTGARDA P. CALLEJA, JOAQUIN M. CALLEJA, JR., JADELSON PETER P.


CALLEJA, MA. JESSICA T. FLORES, MERCIE C. TIPONES and PERFECTO NIXON C.
TABORA, petitioners, vs.JOSE PIERRE A. PANDAY, AUGUSTO R. PANDAY and MA.
THELNA P. MALLARI, respondents.

Actions; Appeals; An order denying the motion to dismiss is merely interlocutory and therefore not
appealable, nor can it be the subject of a petition for review on certiorari.The Court notes that, indeed,
petitioners chose the wrong remedy to assail the Order of July 13, 2005. It is hornbook principle that Rule
45 of the 1997 Rules of Civil Procedure governs appeals from judgments or final orders. The Order dated
July 13, 2005 is basically a denial of herein petitioners prayer in their Answer for the dismissal of
respondents case against them. As a consequence of the trial courts refusal to dismiss the case, it then
directed the transfer of the case to another branch of the Regional Trial Court that had been designated
as a special court to hear cases formerly cognizable by the SEC. Verily, the order was merely interlocutory
as it does not dispose of the case completely, but leaves something more to be done on its merits. Such
being the case, the assailed Order cannot ordinarily be reviewed through a petition under Rule 45. As we
held in Tolentino v. Natanauan, 416 SCRA 273 (2003), to wit: In the case ofBangko Silangan Development
Bank vs. Court of Appeals, the Court reiterated the well-settled rule that: . . . an order denying a motion
to dismiss is merely interlocutory and therefore not appealable, nor can it be the subject of a petition for
review on certiorari. Such order may only be reviewed in the ordinary course of law by an appeal from the
judgment after trial. The ordinary procedure to be followed in that event is to file an answer, go to trial,
and if the decision is adverse, reiterate the issue on appeal from the final judgment.
Same; Same; Jurisdictions;In this case, the basic issue of which court has jurisdiction over cases
previously cognizable by the
_______________

* FIRST DIVISION.

681

VOL. 483, 6
FEBRUARY 28, 2006 81
Calleja vs. Panday
Securities and Exchange Commission under Section 5, P.D. No. 902-A, and the propensity of the
parties to resort to violence, behoove the Court to look beyond petitioners technical lapse of filing a petition
for review on certiorari under Rule 45 instead of a petition for certiorari under Rule 65 with the proper
court, and to proceed to resolve the case on its merits.It appears, however, that the longer this case
remains unresolved, the greater chance there is for more violence between the parties to erupt.
InPhilippine Airlines v. Spouses Kurangking, 389 SCRA 588 (2002), the Court proceeded to give due
course to a case despite the wrong remedy resorted to by the petitioner therein, stating thus: While a
petition for review on certiorari under Rule 45 would ordinarily be inappropriate to assail an
interlocutory order, in the interest, however, of arresting the perpetuation of an apparent error committed
below that could only serve to unnecessarily burden the parties, the Court has resolved to ignore the
technical flaw and, also, to treat the petition, there being no other plain, speedy and adequate remedy, as
a special civil action for certiorari. Not much, after all, can be gained if the Court were to refrain from now
making a pronouncement on an issue so basic as that submitted by the parties. In this case, the basic
issue of which court has jurisdiction over cases previously cognizable by the SEC under Section 5,
2

Presidential Decree No. 902-A (P.D. No. 902-A), and the propensity of the parties to resort to violence
behoove the Court to look beyond petitioners technical lapse of filing a petition for review
on certiorari instead of filing a petition for certiorariunder Rule 65 with the proper court. Thus, the Court
shall proceed to resolve the case on its merits.
Corporation Law;Jurisdictions; Quo Warranto;While actions of quo warranto against persons who
usurp an office in a corporation, which were formerly cognizable by the SEC under PD 902-A, have been
transferred to the courts of general jurisdiction, this does not change the fact that Rule 66 of the 1997 Rules
of Civil Procedure does not apply to quo warranto cases against persons who usurp an office in a private
corporation.It should be noted that allegations in a complaint for quo warranto that certain persons
usurped the offices, powers and functions of duly elected members of the board, trustees and/or officers
make out a case for an intra-corporate controversy. Prior to the enactment of R.A. No. 8799, the Court,
adopting Justice Jose Y. Ferias view, declared inUnilongo v. Court of Appealsthat Section 1, Rule 66 of
the 1997 Rules of Civil Procedure is limited to
682

6 SUPREME
82 COURT REPORTS
ANNOTATED
Calleja vs. Panday
actions of quo warranto against persons who usurp a public office, position or franchise; public
officers who forfeit their office; and associations which act as corporations without being legally
incorporated, while [a]ctions of quo warrantoagainst corporations, or against persons who usurp an
office in a corporation, fall under the jurisdiction of the Securities and Exchange Commission and are
governed by its rules. (P.D. No. 902-A as amended). However, R.A. No. 8799 was passed and Section 5.2
thereof provides as follows: 5.2. The Commissions jurisdiction over all cases enumerated under Section 5
of Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the
appropriate Regional Trial Court: Provided, That the Supreme Court in the exercise of its authority may
designate the Regional Trial Court branches that shall exercise jurisdiction over these cases. x x x
Therefore, actions of quo warranto against persons who usurp an office in a corporation, which were
formerly cognizable by the Securities and Exchange Commission under PD 902-A, have been transferred
to the courts of general jurisdiction. But, this does not change the fact that Rule 66 of the 1997 Rules of
Civil Procedure does not apply to quo warranto cases against persons who usurp an office in a private
corporation.
Same; Same; Same; It is the Interim Rules of Procedure Governing Intra-Corporate Controversies
Under R.A. No. 8799 which applies to the petitions for quo warranto filed before trial courts questioning
the authority of persons to assume office and act as a board of directors of a private corporation.As
explained in the Unilongo case, Section 1(a) of Rule 66 of the present Rules no longer contains the phrase
or an office in a corporation created by authority of law which was found in the old Rules. Clearly, the
present Rule 66 only applies to actions of quo warrantoagainst persons who usurp a public office, position
or franchise; public officers who forfeit their office; and associations which act as corporations without
being legally incorporated despite the passage of R.A. No. 8799. It is, therefore, The Interim Rules of
Procedure Governing IntraCorporate Controversies Under R.A. No. 8799 (hereinafter the Interim Rules)
which applies to the petition forquo warranto filed by respondents before the trial court since what is
being questioned is the authority of herein petitioners to assume the office and act as the board of
directors and officers of St. John Hospital, Incorporated.
683
3

VOL. 483, 6
FEBRUARY 28, 2006 83
Calleja vs. Panday
Same; Same; Same; A court not designated as Special Commercial Court is not vested with
jurisdiction over cases previously cognizable by the SEC and does not have the requisite authority or power
to order the transfer of cases erroneously filed with it to another branch of the Regional Trial Courtthe
only action that it could take on the matter is to dismiss the petition for lack of jurisdiction.The RTC-Br.
58 in San Jose, Camarines Sur is bereft of jurisdiction over respondents petition for quo warranto. Based
on the allegations in the petition, the case was clearly one involving an intra-corporate dispute. The trial
court should have been aware that under R.A. No. 8799 and the aforementioned administrative issuances
of this Court, RTC-Br. 58 was never designated as a Special Commercial Court; hence, it was never
vested with jurisdiction over cases previously cognizable by the SEC. Such being the case, RTC-Br. 58 did
not have the requisite authority or power to order the transfer of the case to another branch of the
Regional Trial Court. The only action that RTC-Br. 58 could take on the matter was to dismiss the
petition for lack of jurisdiction. In HLC Construction and Development Corp. v. Emily Homes Subdivision
Homeowners Association, the Court held that the trial court, having no jurisdiction over the subject
matter of the complaint, should dismiss the same so the issues therein could be expeditiously heard and
resolved by the tribunal which was clothed with jurisdiction.

PETITION for review on certiorari of an order of the Regional Trial Court of San Jose,
Camarines Sur, Br. 58.

The facts are stated in the opinion of the Court.


Perfecto Nixon C. Tabora for petitioners.
Noe Botor for respondents.

AUSTRIA-MARTINEZ, J.:

This resolves the petition for review on certiorari assailing the Order of the Regional Trial Court
1

of San Jose, Camarines Sur, Branch 58 (RTC-Br. 58) issued on July 13, 2005.
The antecedent facts are as follows.
_______________

1 Penned by Presiding Judge Eufronio K. Maristela.

684
684 SUPREME COURT
REPORTS
ANNOTATED
Calleja vs. Panday
On May 16, 2005, respondents filed a petition with the Regional Trial Court of San Jose,
Camarines Sur for quo warranto with Damages and Prayer for Mandatory and Prohibitory
Injunction, Damages and Issuance of Temporary Restraining Order against herein petitioners.
Respondents alleged that from 1985 up to the filing of the petition with the trial court, they had
been members of the board of directors and officers of St. John Hospital, Incorporated, but
sometime in May 2005, petitioners, who are also among the incorporators and stockholders of
4

said corporation, forcibly and with the aid of armed men usurped the powers which supposedly
belonged to respondents.
On May 24, 2005, RTC-Br. 58 issued an Order transferring the case to the Regional Trial
Court in Naga City. According to RTC-Br. 58, since the verified petition showed petitioners
therein (herein respondents) to be residents of Naga City, then pursuant to Section 7, Rule 66 of
the 1997 Rules of Civil Procedure, the action for quo warranto should be brought in the Regional
Trial Court exercising jurisdiction over the territorial area where the respondents or any of the
respondents resides. However, the Executive Judge of RTC, Naga City refused to receive the case
folder of the subject case forquo warranto, stating that improper venue is not a ground for
transferring a quo warranto case to another administrative jurisdiction.
The RTC-Br. 58 then proceeded to issue and serve summons on herein petitioners
(respondents below). Petitioner Tabora filed his Answer dated June 8, 2005, raising therein the
affirmative defenses of (1) improper venue, (2) lack of jurisdiction, and (3) wrong remedy of quo
warranto. Thereafter, the other petitioners also filed their Answer, also raising the same
affirmative defenses. All the parties were then required to submit their respective memoranda.
On July 13, 2005, RTC-Br. 58 issued the assailed Order, the pertinent portions of which read
as follows:
685
VOL. 483, FEBRUARY 685
28, 2006
Calleja vs. Panday
It is undisputed that the plaintiffs cause of action involves controversies arising out of intra-corporate
relations, between and among stockholders, members or associates of the St. John Hospital Inc. which
originally under PD 902-A approved onMarch 11, 1976 is within the original and exclusive jurisdiction of
the Securities and Exchange Commission to try and decide in addition to its regulatory and adjudicated
functions (Section 5, PD 902-A). Upon the advent of RA 8799 approved on July 19, 2000, otherwise known
as the Securities and Regulation Code, the Commissions jurisdiction over all cases enumerated in Section
5, Presidential Decree 902-A were transferred []to the Court of general jurisdiction or the appropriate
Regional Trial Court with a proviso that the Supreme Court in the exercise of its authority may
designate the Regional Trial Court branches that shall exercise jurisdiction over these cases. Pursuant to
this mandate of RA 8799, the Supreme Court in the exercise of said mandated authority, promulgated on
November 21, 2000, A.M. No. 00-11-03-SC which took effect 15 December 2000 designated certain
branches of the Regional Trial Court to try and decide Securities and Exchange Commission Cases
arising within their respective territorial jurisdiction with respect to the National Capital Region and
within the respective provinces in the First to Twelve Judicial Region. Accordingly, in the Province of
Camarines Sur, (Naga City) RTC Branch 23 presided by the Hon. Pablo M. Paqueo, Jr. was designated as
special court (Section 1, A.M. No. 00-11-03-SC).
Subsequently, on January 23, 2001, supplemental Administrative Circular No. 8-01 which took effect
on March 1, 2001 was issued by the Supreme Court which directed that all SEC cases originally assigned
or transmitted to the regular Regional Trial Court shall be transferred to branches of the Regional Trial
Court specially designated to hear such cases in accordance with A.M. No. 00-11-03-SC.
On March 13, 2001, A.M. No. 01-2-04 SC was promulgated and took effect on April 1, 2001.
From the foregoing discussion and historical background relative to the venue and jurisdiction to try
and decide cases originally enumerated in Section 5 of PD 902-A and later under Section 5.2 of RA 8799,
it is evident that the clear intent of the circular is to bestow the juridiction to try and decide these cases
to the special courts created under A.M. No. 00-11-03-SC. . . .
5

686
686 SUPREME COURT
REPORTS
ANNOTATED
Calleja vs. Panday
Under Section 8, of the Interim Rules, [a] Motion to Dismiss is among the prohibited pleadings. On the
otherhand, the Supreme Court under Administrative Order 8-01 has directed the transfer from the
regular courts to the branches of the Regional Trial Courts specially designated to try and decide intra-
corporate dispute.
In the light of the above-noted observations and discussion, the Motion to Dismissis DENIED pursuant
to the Interim Rules of Procedure for Intra-Corporate Controversies (A.M. No. 01-2-04-SC) which
mandates that motion to dismiss is a prohibited pleading (Section 8) and in consonance with
Administrative Order 8-01 of the Supreme Court dated March 1, 2001, this case is hereby
orderedremanded to the Regional Trial Court Branch 23, Naga City which under A.M. No. 00-11-03-SC
has been designated as special court to try and decide intra-corporate controversies under R.A. 8799.
The scheduled hearing on the prayer for temporary restraining order and preliminary injunction set on
July 18, 2005 is hereby cancelled.
For reasons of comity the issue of whether Quo Warrantois the proper remedy is better left to the court
of competent jurisdiction to rule upon.
SO ORDERED. 2

Petitioners no longer moved for reconsideration of the foregoing Order and, instead, immediately
elevated the case to this Court via a petition for review oncertiorari under Rule 45 of the 1997
Rules of Civil Procedure. The petition raises the following issues:
I

WHETHER A BRANCH OF THE REGIONAL TRIAL COURT WHICH HAS NO JURISDICTION TO


TRY AND DECIDE A CASE HAS AUTHORITY TO REMAND THE SAME TO ANOTHER CO-EQUAL
COURT IN ORDER TO CURE THE DEFECTS ON VENUE AND JURISDICTION
_______________

2 Rollo, pp. 32-34.

687
VOL. 483, FEBRUARY 687
28, 2006
Calleja vs. Panday

II

WHETHER OR NOT ADMINISTRATIVE CIRCULAR NO. 8-01 DATED JANUARY 23, 2001 WHICH
TOOK EFFECT ON MARCH 1, 2001 MAY BE APPLIED IN THE PRESENT CASE WHICH WAS FILED
ON MAY 16, 2005. 3

In their Comment, respondents argue that the present petition should be denied due course and
dismissed on the grounds that (1) an appeal under Rule 45 is inappropriate in this case because
the Order dated July 13, 2005 is merely an interlocutory order and not a final order as
6

contemplated under Rule 45 of the 1997 Rules of Civil Procedure; (2) a petition for review
on certiorari under Rule 45 is the wrong remedy under A.M. No. 04-9-07-SC, which provides that
all decisions and final orders in cases falling under the Interim Rules of Corporate
Rehabilitation and the Interim Rules of Procedure Governing Intra-Corporate Controversies
under Republic Act No. 8799 shall be appealable to the Court of Appeals through a petition for
review under Rule 43 of the Rules of Court; and (3) the petition was intended merely to delay
the proceedings in the trial court because when the case was transferred to Branch 21 of the
Regional Trial Court, said court granted petitioners motion to hold the proceedings in view of
the present petition pending before this Court.
Subsequently, petitioners also filed an Urgent Motion to Restore Status Quo Ante, alleging
that on January 12, 2006, respondent Jose Pierre Panday, with the aid of 14 armed men,
assaulted the premises of St. John Hospital in Naga City, taking away the daily hospital
collections estimated at P400,000.00.
The Court notes that, indeed, petitioners chose the wrong remedy to assail the Order of July
13, 2005. It is hornbook principle that Rule 45 of the 1997 Rules of Civil Procedure
_______________

3 Id., pp. 12, 16.

688
688 SUPREME COURT
REPORTS
ANNOTATED
Calleja vs. Panday
governs appeals from judgments or final orders. The Order dated July 13, 2005 is basically a
4

denial of herein petitioners prayer in their Answer for the dismissal of respondents case against
them. As a consequence of the trial courts refusal to dismiss the case, it then directed the
transfer of the case to another branch of the Regional Trial Court that had been designated as a
special court to hear cases formerly cognizable by the SEC. Verily, the order was merely
interlocutory as it does not dispose of the case completely, but leaves something more to be done
on its merits. Such being the case, the assailed Order cannot ordinarily be reviewed through a
petition under Rule 45. As we held inTolentino v. Natanauan, to wit: 5

In the case of Bangko Silangan Development Bank vs. Court of Appeals, the Court reiterated the well-
settled rule that:
. . . an order denying a motion to dismiss is merely interlocutory and therefore not appealable, nor can it be the
subject of a petition for review on certiorari. Such order may only be reviewed in the ordinary course of law by an
appeal from the judgment after trial. The ordinary procedure to be followed in that event is to file an answer, go to
trial, and if the decision is adverse, reiterate the issue on appeal from the final judgment. 6

It appears, however, that the longer this case remains unresolved, the greater chance there is for
more violence between the parties to erupt. In Philippine Airlines v. Spouses Kurangking, the 7

Court proceeded to give due course to a case despite the wrong remedy resorted to by the
petitioner therein, stating thus:
_______________

4 See Gallardo v. People, G.R. No. 142030, April 21, 2005, 456 SCRA 494, 502.
5 G.R. No. 135441, November 20, 2003, 416 SCRA 273.
7

6 Id., at p. 280.
7 438 Phil. 375; 389 SCRA 588(2002).

689
VOL. 483, FEBRUARY 689
28, 2006
Calleja vs. Panday
While a petition for review on certiorari under Rule 45 would ordinarily be inappropriate to assail an
interlocutory order, in the interest, however, of arresting the perpetuation of an apparent error committed
below that could only serve to unnecessarily burden the parties, the Court has resolved to ignore the
technical flaw and, also, to treat the petition, there being no other plain, speedy and adequate remedy, as
a special civil action for certiorari. Not much, after all, can be gained if the Court were to refrain from now
making a pronouncement on an issue so basic as that submitted by the parties. 8

In this case, the basic issue of which court has jurisdiction over cases previously cognizable by
the SEC under Section 5, Presidential Decree No. 902-A (P.D. No. 902-A), and the propensity of
the parties to resort to violence behoove the Court to look beyond petitioners technical lapse of
filing a petition for review oncertiorari instead of filing a petition for certiorari under Rule 65
with the proper court. Thus, the Court shall proceed to resolve the case on its merits.
It should be noted that allegations in a complaint forquo warranto that certain persons
usurped the offices, powers and functions of duly elected members of the board, trustees and/or
officers make out a case for an intra-corporate controversy. Prior to the enactment of R.A. No.
9

8799, the Court, adopting Justice Jose Y. Ferias view, declared in Unilongo v. Court of
Appeals that Section 1, Rule 66 of the 1997 Rules of Civil Procedure is limited to actions of quo
10

warrantoagainst persons who usurp a public office, position or franchise; public officers who
forfeit their office; and associations which act as corporations without being legally
incorporated, while [a]ctions of quo warrantoagainst corporations, or against persons who
usurp an office in a corporation, fall under the
_______________

8 Id., at pp. 379-380; pp. 590-591.


9 Unilongo v. Court of Appeals,365 Phil. 105; 305 SCRA 561 (1999).
10 Id.

690
690 SUPREME COURT
REPORTS
ANNOTATED
Calleja vs. Panday
jurisdiction of the Securities and Exchange Commission and are governed by its rules. (P.D. No.
902-A as amended). 11

However, R.A. No. 8799 was passed and Section 5.2 thereof provides as follows:
5.2. The Commissions jurisdiction over all cases enumerated under Section 5 of Presidential Decree No.
902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court:
Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over these cases. x x x
8

Therefore, actions of quo warranto against persons who usurp an office in a corporation, which
were formerly cognizable by the Securities and Exchange Commission under PD 902-A, have
been transferred to the courts of general jurisdiction. But, this does not change the fact that Rule
66 of the 1997 Rules of Civil Procedure does not apply toquo warranto cases against persons who
usurp an office in a private corporation. Presently, Section 1(a) of Rule 66 reads thus:
Section 1. Action by Government against individuals.An action for the usurpation of a public office,
position or franchise may be commenced by a verified petition brought in the name of the Republic of the
Philippines against
(a) A person who usurps, intrudes into, or unlawfully holds or exercises a public office, position or
franchise;
xxxx

As explained in theUnilongo case, Section 1(a) of Rule 66 of the present Rules no longer contains
12

the phrase or an office in a corporation created by authority of law which was found in the old
Rules. Clearly, the present Rule 66 only applies to actions of quo warranto against persons who
usurp a public
_______________

11 Id., at p. 120; pp. 574-575, citing Jose Y. Feria, 1997 Rules of Civil Procedure.
12 Supra, at p. 119; p. 574.

691
VOL. 483, FEBRUARY 691
28, 2006
Calleja vs. Panday
office, position or franchise; public officers who forfeit their office; and associations which act as
corporations without being legally incorporated despite the passage of R.A. No. 8799. It is,
therefore, The Interim Rules of Procedure Governing Intra-Corporate Controversies Under R.A.
No. 8799 (hereinafter the Interim Rules) which applies to the petition for quo warranto filed by
respondents before the trial court since what is being questioned is the authority of herein
petitioners to assume the office and act as the board of directors and officers of St. John Hospital,
Incorporated.
The Interim Rules provide thus:
Section 1. (a) Cases covered.These Rules shall govern the procedure to be observed in civil cases
involving the following:
xxxx
(2) Controversies arising out of intra-corporate, partnership, or association relations,
between and among stockholders, members, or associates, and between, any or all of them and the
corporation, partnership, or association of which they are stockholders, members, or associates,
respectively;
(3) Controversies in the election or appointment of di-rectors, trustees, officers, or
managers of corporations, partnerships, or associations;
xxxx
SEC. 5. Venue.All actions covered by these Rules shall be commenced and tried in the Regional Trial
Court which has jurisdiction over the principal office of the corporation, partnership, or association
concerned. x x x (Emphasis ours)
9

Pursuant to Section 5.2 of R.A. No. 8799, the Supreme Court promulgated A.M. No. 00-11-03-SC
(effective December 15, 2000) designating certain branches of the Regional Trial Courts to try
and decide cases formerly cognizable by the Securities and Exchange Commission. For the Fifth
Judicial Region, this Court designated the following branches of the Regional Trial Court, to wit:
692
692 SUPREME
COURT
REPORTS
ANNOTATED
Calleja vs. Panday
Camarines Branch 23,
Sur (Naga Judge Pablo M.
City) Paqueo, Jr.
Albay Branch 4, Judge
(Legaspi Gregorio A.
City) Consulta
Sorsogon Branch 52,
(Sorsogon) Judge Honesto
A. Villamor
Subsequently, the Court promulgated A.M. No. 03-03-03-SC, effective July 1, 2003, which
provides that:

1. 1.The Regional Courts previously designated as SEC Courts through the: (a)
Resolutions of this Court dated 21 November 2000, 4 July 2001, 12 November 2002, and
9 July 2002, all issued in A.M. No. 00-11-03-SC, (b) Resolution dated 27 August 2001 in
A.M. No. 01-5-298-RTC; and (c) Resolution dated 8 July 2002 in A.M. No. 01-12-656-
RTC are hereby DESIGNATED and shall be CALLED asSpecial Commercial
Courts to try and decide cases involving violations of Intellectual Property Rights
which fall within their jurisdiction and those cases formerly cognizable by the
Securities and Exchange Commission;
xxxx
2. 4.The Special Commercial Courts shall have jurisdiction over cases arising
within their respective territorial jurisdiction with respect to the National Capital
Judicial Region and within the respective provinces with respect to the First to Twelfth
Judicial Regions. Thus, cases shall be filed in the Office of the Clerk of Court in
the official station of the designated Special Commercial Court;(Emphasis ours)

The next question then is, which branch of the Regional Trial Court has jurisdiction over the
present action forquo warrato? Section 5 of the Interim Rules provides that the petition should
be commenced and tried in the Regional Trial Court that has jurisdiction over the principal office
of the corporation. It is undisputed that the principal office of the corporation is situated at
Goa, Camarines Sur. Thus, pursuant to A.M. No. 00-11-03-SC and A.M. No. 03-03-03-SC, it is
the Regional Trial Court designated asSpecial Commercial Courts in Camarines Sur which shall
have jurisdiction over the petition for quo warrantofiled by herein respondents.
693
VOL. 483, FEBRUARY 693
10

28, 2006
Calleja vs. Panday
Evidently, the RTC-Br. 58 in San Jose, Camarines Sur is bereft of jurisdiction over respondents
petition for quo warranto. Based on the allegations in the petition, the case was clearly one
involving an intra-corporate dispute. The trial court should have been aware that under R.A. No.
8799 and the aforementioned administrative issuances of this Court, RTC-Br. 58 was never
designated as a Special Commercial Court; hence, it was never vested with jurisdiction over
cases previously cognizable by the SEC.
Such being the case, RTC-Br. 58 did not have the requisite authority or power to order the
transfer of the case to another branch of the Regional Trial Court. The only action that RTC-Br.
58 could take on the matter was to dismiss the petition for lack of jurisdiction. In HLC
Construction and Development Corp. v. Emily Homes Subdivision Homeowners Association, the 13

Court held that the trial court, having no jurisdiction over the subject matter of the complaint,
should dismiss the same so the issues therein could be expeditiously heard and resolved by the
tribunal which was clothed with jurisdiction.
Note, further, that respondents petition for quo warranto was filed as late as 2005. A.M. No.
03-03-03-SC took effect as early as July 1, 2003 and it was clearly provided therein that such
petitions shall be filed in the Office of the Clerk of Court in the official station of the designated
Special Commercial Court. Since the official station of the designated Special Commercial Court
for Camarines Sur is the Regional Trial Court in Naga City, respondents should have filed their
petition with said court. A.M. No. 00-11-03-SC having been in effect for four years and A.M. No.
03-03-03-SC having been in effect for almost two years by the time respondents filed their
petition, there is no cogent reason why respondents were not aware of the appropriate court
where their petition should be filed.
_______________

13 G.R. No. 139360, September 23, 2003, 411 SCRA 504.

694
694 SUPREME COURT
REPORTS
ANNOTATED
Calleja vs. Panday
The ratiocination of RTC-Br. 58 that Administrative Circular No. 08-2001 authorized said trial
court to order the transfer of respondents petition to the Regional Trial Court of Naga City is
specious because as of the time of filing of the petition, A.M. No. 03-03-03-SC, which clearly
stated that cases formerly cognizable by the SEC should be filed with the Office of the Clerk of
Court in the official station of the designated Special Commercial Court, had been in
effect for almost two years. Thus, the filing of the petition with the Regional Trial Court of San
Jose, Camarines Sur, which had no jurisdiction over those kinds of actions, was clearly
erroneous.
WHEREFORE, the petition is GIVEN DUE COURSE and GRANTED. The Order of the
Regional Trial Court of San Jose, Camarines Sur dated July 13, 2005 is SET ASIDE for being
NULL and VOID. The petition for quo warranto in Civil Case No. T-1007 (now re-docketed as
SEC Case No. RTC 2005-0001), entitled Jose Pierre A. Panday, et al. v. Sps. Joaquin M. Calleja,
Jr., et al. is ordered DISMISSED.
11

SO ORDERED.
Panganiban (C.J., Chairperson), Ynares-Santiago, Callejo, Sr. andChico-Nazario, JJ.,
concur.

Petition given due course and granted, order of the Regional Trial Court of San Jose,
Camarines Sur set aside for being null and void.
Notes.Administrative agencies, like the SEC, are tribunals of limited jurisdiction and, as
such, could wield only such powers as are specially granted to them by their enabling statutes.
(Sumndad vs. Harrigan, 381 SCRA 8[2002])
Under Section 5.2 of R.A. No. 8799, whether the issue is intracorporate or not is no longer
material since the SEC has been divested of its jurisdiction thereover. (Andres vs. Cuevas, 460
SCRA 38 [2005])

o0

June 22, 2011. G.R. No. 192649.*


HOME GUARANTY CORPORATION, petitioner,vs. R-II BUILDERS, INC. and NATIONAL
HOUSING AUTHORITY, respondents.

Remedial Law; Actions; Jurisdiction; In Atwel v. Concepcion Progressive Association, Inc., 551 SCRA
272 (2008), and Reyes v. Hon. Regional Trial Court of Makati, Branch 142, 561 SCRA 593 (2008), which
involve SCCs trying and/or deciding cases which were found to be civil in nature, this Court significantly
ordered the dismissal of the complaint for lack of jurisdiction instead of simply
_______________

** Acting member per Special Order No. 1006.


* SPECIAL FIRST DIVISION.

650

6 SUPREME
50 COURT REPORTS
ANNOTATED
Home Guaranty
Corporation vs. R-II
Builders, Inc.
directing the re-raffle of the case to another branch.The record shows that, with the raffle of R-II
Builders complaint before Branch 24 of the Manila RTC and said courts grant of the application for
temporary restraining order incorporated therein, HGC sought a preliminary hearing of its affirmative
defenses which included, among other grounds, lack of jurisdiction and improper venue. It appears that,
at said preliminary hearing, it was established that R-II Builders complaint did not involve an intra-
corporate dispute and that, even if it is, venue was improperly laid since none of the parties maintained
its principal office in Manila. While it is true, therefore, that R-II Builders had no hand in the raffling of
the case, it cannot be gainsaid that Branch 24 of the RTC Manila had no jurisdiction over the case. Rather
than ordering the dismissal of the complaint, however, said court issued the 2 January 2008 order
erroneously ordering the re-raffle of the case. In Atwel v. Concepcion Progressive Association, Inc., 551
SCRA 272 (2008), and Reyes v. Hon. Regional Trial Court of Makati, Branch 142, 561 SCRA 593 (2008),
which involved SCCs trying and/or deciding cases which were found to be civil in nature, this Court
12

significantly ordered the dismissal of the complaint for lack of jurisdictioninstead of simply directing the
re-raffle of the case to another branch.
Same; Same; Same; While it is, consequently, true that jurisdiction, once required, cannot be easily
ousted, it is equally settled that a court acquires jurisdiction over a case only upon the payment of the
prescribed filing and docket fees.Even then, the question of the Manila RTCs jurisdiction over the case
is tied up with R-II Builders payment of the correct docket fees which should be paid in full upon the
filing of the pleading or other application which initiates an action or proceeding. While it is,
consequently, true that jurisdiction, once acquired, cannot be easily ousted, it is equally settled that a
court acquires jurisdiction over a case only upon the payment of the prescribed filing and docket fees.
Already implicit from the filing of the complaint in the City of Manila where the realties comprising the
Asset Pool are located, the fact that the case is a real action is evident from the allegations of R-II
Builders original Complaint, Amended and Supplemental Complaint and Second Amended Complaint
which not only sought the nullification of the DAC in favor of HGC but, more importantly, prayed for the
transfer of possession of and/or control of the properties in the Asset Pool. Its current protestations to the
contrary notwithstanding, no less than R-II Builders
651

VOL. 652, JUNE 6


22, 2011 51
Home Guaranty
Corporation vs. R-II
Builders, Inc.
in its opposition to HGCs motion to dismissadmitted that the case is a real action as it affects title
to or possession of real property or an interest therein. Having only paid docket fees corresponding to an
action where the subject matter is incapable of pecuniary estimation, R-II Builders cannot expediently
claim that jurisdiction over the case had already attached.
Same; Same; Same; A case for rescission or annulment of contract is not susceptible of pecuniary
estimation although it may eventually result in the recovery of real property; In determining whether an
action is one the subject matter of which is not capable of pecuniary estimation, this Court has adopted the
criterion of first ascertaining the nature of the principal action or remedy sought; Determination must be
done on a case-to-case basis, depending on the facts and circumstances of each.In De Leon v. Court of
Appeals, 278 SCRA 94 (1998), this Court had, of course, ruled that a case for rescission or annulment of
contract is not susceptible of pecuniary estimation although it may eventually result in the recovery of
real property. Taking into consideration the allegations and the nature of the relief sought in the
complaint in the subsequent case of Serrano v.Delica, 465 SCRA 82 (2005), however, this Court
determined the existence of a real action and ordered the payment of the appropriate docket fees for a
complaint for cancellation of sale which prayed for both permanent and preliminary injunction aimed at
the restoration of possession of the land in litigation is a real action. In discounting the apparent conflict
in said rulings, the Court went on to rule as follows inRuby Shelter Builders and Realty Development
Corporation v. Hon. Pablo C, Formaran, 578 SCRA 283 (2009), to wit: The Court x x x does not perceive a
contradiction between Serranoand the Spouses De Leon. The Court calls attention to the following
statement in Spouses De Leon: A review of the jurisprudence of this Court indicates that in determining
whether an action is one the subject matter of which is not capable of pecuniary estimation, this Court
has adopted the criterion of first ascertaining the nature of the principal action or remedy sought.
Necessarily, the determination must be done on a case-to-case basis, depending on the facts and
circumstances of each. What petitioner conveniently ignores is that inSpouses De Leon, the action therein
13

that private respondents instituted before the RTC was solely for annulment or rescission of the
contract of sale over a real property. There appeared to be no trans-
652

6 SUPREME
52 COURT REPORTS
ANNOTATED
Home Guaranty
Corporation vs. R-II
Builders, Inc.
fer of title or possession to the adverse party x x x. (Underscoring Supplied)
Same; Same; Same; Jurisdiction over any case is acquired only upon the payment of the prescribed
docket fee which is both mandatory and jurisdictional.In obvious evasion of said directive to pay the
correct docket fees, however, R-II Builders withdrew its Amended and Supplemental Complaint and, in
lieu thereof, filed its Second Amended Complaint which, while deleting its causes of action for accounting
and conveyance of title to and/or possession of the entire Asset Pool, nevertheless prayed for its
appointment as Receiver of the properties comprising the same. In the landmark case of Manchester
Development Corporation v. Court of Appeals, 149 SCRA 562 (1987), this Court ruled that jurisdiction
over any case is acquired only upon the payment of the prescribed docket fee which is both mandatory
and jurisdictional. Although it is true that the Manchester Rule does not apply despite insufficient filing
fees when there is no intent to defraud the government, R-II Builders evident bad faith should clearly
foreclose the relaxation of said rule.
VELASCO, JR., J., Dissenting Opinion:
Remedial Law; Actions; Jurisdiction; The RTC of Manila still had jurisdiction over the case; it was
not lost by the erroneous raffle; Jurisdiction is conferred by law. Once jurisdiction is acquired, it continues
until the case is finally terminated.The judge presiding over Branch 24 of RTC Manila, a designated
Special Commercial Court (SCC), however, determined that the case was not an intra-corporate dispute,
and found it proper that the case be returned to the Executive Judge of RTC Manila for re-raffling. Thus,
it was the Executive Judge of RTC Manila who conducted the re-raffling, and the case was then
transferred to Branch 22 of RTC Manila. The subject matter jurisdiction over the case belonged and still
remains with RTC Manila. The re-raffling only effected the transfer of the case from one branch to
another branch of the same court, namely RTC Manila, by rightful action of the Executive Judge,
not via order of Branch 24 of RTC Manila. The RTC of Manila still had jurisdiction over the case; it was
not lost by the erroneous raffle. Jurisdiction is conferred by law. Once jurisdiction is acquired, it continues
until the case is finally terminated. Thus, the complaint at bar should not be dismissed for lack of
jurisdiction.653

VOL. 652, JUNE 6


22, 2011 53
Home Guaranty
Corporation vs. R-II
Builders, Inc.
Same; Same; Same; The present complaint of respondent R-II Builders still remains one that involves
an action incapable of pecuniary estimation, a subject matter which is within the exclusive original
jurisdiction of the RTC Manila, and the corresponding docket fees prescribed by RTC Manila were already
paid at the time of the filing of the original Complaint.Since the conveyance of the Asset Pool to R-II
14

Builders was not a transfer of ownership to said company, but instead the Asset Pool was held only by R-
II Builders as trustee in favor of the rightful owners, then there is NO benefit or gain to R-II Builders and
the instant case cannot be classified as a real action. The present complaint of respondent R-II Builders
still remains one that involves an action incapable of pecuniary estimation, a subject matter which is
within the exclusive original jurisdiction of the RTC Manila, and the corresponding docket fees prescribed
by RTC Manila were already paid at the time of the filing of the original Complaint. Hence, (here is no
basis for the payment of additional fees.
Same; Same; Same; Even granting arguendo that the instant case is a real action and not one
incapable of pecuniary estimation, the case should not be dismissed but the payment of the additional fees
shall be made a lien on the judgment.Even granting arguendo that the instant case is a real action and
not one incapable of pecuniary estimation, the case should not be dismissed but the payment of the
additional fees shall be made a lien on the judgment. It would not be in keeping with the liberal
application of the rules for the Court to order the dismissal of the complaint when the RTC Manila itself
committed the error of assigning the case to an SCC. when the subject matter did not involve an intra-
corporate dispute. The Court will deviate from the policy of securing a just, speedy and inexpensive
resolution of the case at bar if respondent R-II Builders paid the prescribed docket fees, which We would
later deem erroneous, and for which its complaint would be dismissed. If We maintain that there was a
mistake in the imposition of the docket fees assessed by the Court itself through the error of a trial court,
then the better procedure is to consider the additional docket fees that may be due and owing from
respondent R-II Builders as a lien on the judgment award, instead of dismissing the complaint.

MOTION FOR RECONSIDERATION of a decision of the Supreme Court.654

654 SUPREME COURT


REPORTS
ANNOTATED
Home Guaranty Corporation
vs. R-II Builders, Inc.
The facts are stated in the resolution of the Court.
The HGC Legal Groupfor petitioner.
Ponce Enrile, Reyes & Manalastas Law Firm for R-II Builders, Inc.

RESOLUTION

PEREZ,J.:
Before the Court are: (a) the Entry of Appearance filed by Atty. Lope E. Feble of the Toquero
Exconde Manalang Feble Law Offices as collaborating counsel for respondent R-II Builders, Inc.
(R-II Builders), with prayer to be furnished all pleadings, notices and other court processes at its
given address; and (b) the motion filed by R-II Builders, seeking the reconsideration of Courts
decision dated 9 March 2011 on the following grounds:1
I
THE HONORABLE COURT ERRED IN RULING THAT RTC MANILA, BRANCH 22, HAD NO
JURISDICTION OVER THE PRESENT CASE SINCE RTC-MANILA, BRANCH 24, TO WHICH
THE INSTANT CASE WASINITIALLY RAFFLED HAD NO AUTHORITY TO HEAR THE CASE
BEING A SPECIAL COMMERCIAL COURT.
II.
15

THE HONORABLE COURT ERRED IN RULING THAT THE CORRECT DOCKET FEES WERE
NOT PAID.

In urging the reversal of the Courts decision, R-II Builders argues that it filed its complaint
with the Manila RTC which is undoubtedly vested with jurisdiction over actions where the
subject matter is incapable of pecuniary estimation; that
_______________

1 Rollo, Vol. II, p. 1819.

655
VOL. 652, JUNE 22, 655
2011
Home Guaranty Corporation
vs. R-II Builders, Inc.
through no fault of its own, said complaint was raffled to Branch 24, the designated Special
Commercial Court (SCC) tasked to hear intra-corporate controversies; that despite the
determination subsequently made by Branch 24 of the Manila RTC that the case did not involve
an intra-corporate dispute, the Manila RTC did not lose jurisdiction over the same and its
Executive Judge correctly directed its re-raffling to Branch 22 of the same Court; that the re-
raffle and/or amendment of pleadings do not affect a courts jurisdiction which, once acquired,
continues until the case is finally terminated; that since its original Complaint, Amended and
Supplemental Complaint and Second Amended Complaint all primarily sought the nullification
of the Deed of Assignment and Conveyance (DAC) transferring the Asset Pool in favor of
petitioner Home Guaranty Corporation (HGC), the subject matter of the case is clearly one which
is incapable of pecuniary estimation; and, that the court erred in holding that the case was a real
action and that it evaded the payment of the correct docket fees computed on the basis of the
assessed value of the realties in the Asset Pool.
R-II Builders motion is bereft of merit.
The record shows that, with the raffle of R-II Builders complaint before Branch 24 of the
Manila RTC and said courts grant of the application for temporary restraining order
incorporated therein, HGC sought a preliminary hearing of its affirmative defenses which
included, among other grounds, lack of jurisdiction and improper venue. It appears that, at said
preliminary hearing, it was established that R-II Builders complaint did not involve an intra-
corporate dispute and that, even if it is, venue was improperly laid since none of the parties
maintained its principal office in Manila. While it is true, therefore, that R-II Builders had no
hand in the raffling of the case, it cannot be gainsaid that Branch 24 of the RTC Manila had no
jurisdiction over the case. Rather than ordering the dismissal of the complaint, however, said
court issued the 2 January 2008 order erroneously ordering the re-
656
656 SUPREME COURT
REPORTS
ANNOTATED
Home Guaranty Corporation
vs. R-II Builders, Inc.
16

raffle of the case. In Atwel v. Concepcion Progressive Association, Inc.2 and Reyes v. Hon. Regional
Trial Court of Makati, Branch 1423which involved SCCs trying and/or deciding cases which were
found to be civil in nature, this Court significantly ordered the dismissal of the complaint for lack
of jurisdiction instead of simply directing the re-raffle of the case to another branch.
Even then, the question of the Manila RTCs jurisdiction over the case is tied up with R-II
Builders payment of the correct docket fees which should be paid in full upon the filing of the
pleading or other application which initiates an action or proceeding. 4 While it is, consequently,
true that jurisdiction, once acquired, cannot be easily ousted,5 it is equally settled that a court
acquires jurisdiction over a case only upon the payment of the prescribed filing and docket
fees.6 Already implicit from the filing of the complaint in the City of Manila where the realties
comprising the Asset Pool are located, the fact that the case is a real action is evident from the
allegations of R-II Builders original Complaint, Amended and Supplemental Complaint and
Second Amended Complaint which not only sought the nullification of the DAC in favor of HGC
but, more importantly, prayed for the transfer of possession of and/or control of the properties in
the Asset Pool. Its current protestations to the contrary notwithstanding, no less than R-II
Buildersin its opposition to HGCs motion to dismissadmitted that the case is a real action as
it affects title to or possession of real property or an interest therein. 7 Having only paid docket
fees corresponding to an action where the
_______________

2 G.R. No. 169370, 14 April 2008, 551 SCRA 272.


3 G.R. No. 165744, 11 August 2008, 561 SCRA 593.
4 Section 1, Rule 141 of theRevised Rules of Court.
5 PNB v. Tejano, Jr., G.R. No. 173615, 16 October 2009, 604 SCRA 147.
6 Lacson v. Reyes, G.R. No. 86250, 26 February 1990, 182 SCRA 729, 733.
7 Rollo, p. 436.

657
VOL. 652, JUNE 22, 657
2011
Home Guaranty Corporation
vs. R-II Builders, Inc.
subject matter is incapable of pecuniary estimation, R-II Builders cannot expediently claim that
jurisdiction over the case had already attached.
In De Leon v. Court of Appeals,8 this Court had, of course, ruled that a case for rescission or
annulment of contract is not susceptible of pecuniary estimation although it may eventually
result in the recovery of real property. Taking into consideration the allegations and the nature
of the relief sought in the complaint in the subsequent case ofSerrano v. Delica,9 however, this
Court determined the existence of a real action and ordered the payment of the appropriate
docket fees for a complaint for cancellation of sale which prayed for both permanent and
preliminary injunction aimed at the restoration of possession of the land in litigation is a real
action. In discounting the apparent conflict in said rulings, the Court went on to rule as follows
in Ruby Shelter Builders and Realty Development Corporation v. Hon. Pablo C, Formaran,10 to
wit:
The Court x x x does not perceive a contradiction betweenSerrano and the Spouses De Leon. The
Court calls attention to the following statement inSpouses De Leon: A review of the jurisprudence of this
17

Court indicates that in determining whether an action is one the subject matter of which is not capable of
pecuniary estimation, this Court has adopted the criterion of first ascertaining the nature of the principal
action or remedy sought. Necessarily, the determination must be done on a case-to-case basis, depending
on the facts and circumstances of each. What petitioner conveniently ignores is that inSpouses De Leon,
the action therein that private respondents instituted before the RTC was solely for annulment or
rescission of the contract of sale over a real property. There appeared to be no transfer of title or
possession to the adverse party x x x. (Underscoring Supplied)

_______________

8 G.R. No. 104796, 6 March 1998, 278 SCRA 94.


9 G.R. No. 136325, 29 July 2005, 465 SCRA 82.
10 G.R. No. 175914, 10 February 2009, 578 SCRA 283.

658
658 SUPREME COURT
REPORTS
ANNOTATED
Home Guaranty Corporation
vs. R-II Builders, Inc.
Having consistently sought the transfer of possession and control of the properties comprising
the Asset Pool over and above the nullification of the Deed of Conveyance in favor of HGC, it
follows R-II Builders should have paid the correct and appropriate docket fees, computed
according to the assessed value thereof. This much was directed in the 19 May 2008 Order issued
by Branch 22 of the Manila RTC which determined that the case is a real action andadmitted the
Amended and Supplemental Complaint R-II Builders subsequently filed in the case.11 In obvious
evasion of said directive to pay the correct docket fees, however, R-II Builders withdrew its
Amended and Supplemental Complaint and, in lieu thereof, filed its Second Amended Complaint
which, while deleting its causes of action for accounting and conveyance of title to and/or
possession of the entire Asset Pool, nevertheless prayed for its appointment as Receiver of the
properties comprising the same. In the landmark case of Manchester Development Corporation v.
Court of Appeals,12 this Court ruled that jurisdiction over any case is acquired only upon the
payment of the prescribed docket fee which is both mandatory and jurisdictional. Although it is
true that the Manchester Rule does not apply despite insufficient filing fees when there is no
intent to defraud the government,13 R-II Builders evident bad faith should clearly foreclose the
relaxation of said rule.
In addition to the jurisdictional and pragmatic aspects underlying the payment of the correct
docket fees which have already been discussed in the decision sought to be reconsidered, it
finally bears emphasizing that the Asset Pool is comprised of government properties utilized by
HGC as part of its sinking fund, in pursuit of its mandate as statutory guarantor
_______________

11 Rollo, pp. 490-495.


12 233 Phil. 579, 584; 149 SCRA 562, 569 (1987).
13 Intercontinental Broadcasting Corporation (IBC-13) v. Hon. Rose Marie Alonzo Legasto, G.R. No. 169108, 18 April
2006, 487 SCRA 339.
18

659
VOL. 652, JUNE 22, 659
2011
Home Guaranty Corporation
vs. R-II Builders, Inc.
of government housing programs. With the adverse consequences that could result from the
transfer of possession and control of the Asset Pool, it is imperative that R-II Builders should be
made to pay the docket and filing fees corresponding to the assessed value of the properties
comprising the same.
WHEREFORE, the Court resolves to:
NOTE the Entry of Appearance of Atty. Lope E. Feble of Tuquero Exconde Manalang Feble
Law Offices as collaborating counsel for respondent R-II Builders, Inc.; and DENY counsels
prayer to be furnished with all pleadings notices and other court processes at Unit 2704-A, West
Tower, Philippine Stock Exchange Centre, Exchange Road, Ortigas Center Pasig, since only the
lead counsel is entitled to service of court processes; (a)
DENY with FINALITY R-II Builders, Inc.s Motion for Reconsideration of the Decision dated 9
March 2011 for lack of merit, the basic issues having been already passed upon and there being
no substantial argument to warrant a modification of the same. No further pleadings or motions
shall be entertained herein. (b)
Let an Entry of Judgment in this case be made in due course.
SO ORDERED.
Corona (C.J., Chairperson), Leonardo-De Castro and Peralta,** JJ., concur.
Velasco, Jr., J., I dissent (Pls. see Dissenting Opinion).

_______________

** Per Raffle dated 22 June 2011.

660
660 SUPREME COURT
REPORTS
ANNOTATED
Home Guaranty Corporation
vs. R-II Builders, Inc.

DISSENTING OPINION

VELASCO, JR.,J.:
The Motion for Reconsideration of respondent R-II Builders, Inc. (R-II Builders) is impressed
with merit. Consequently, the Decision dated March 9, 2011 has to be abandoned and set aside.
In Our March 9, 2011 Decision, We ruled as follows:
x x x With its acknowledged lack of jurisdiction over the case, Branch 24 of the Manila RTC
should have ordered the dismissal of the complaint, since a court without subject matter
jurisdiction cannot transfer the case to another court.Instead, it should have simply ordered the
dismissal of the complaint, considering that the affirmative defenses for which HGC sought hearing
included its lack of jurisdiction over the case.1 (Emphasis supplied.)
19

Upon a revisit of the above ruling, it is my opinion that the Manila Regional Trial Court
(RTC) has jurisdiction and continues to exercise jurisdiction over the Second Amended
Complaint of respondent.
Batas Pambansa Blg. (BP) 129, or the Judiciary Reorganization Act of 1980, as amended by
Republic Act No. (RA) 7691, is clear when it laid down the jurisdiction of RTCs and provided that
they shall exercise exclusive original jurisdiction in all civil actions in which the subject of
litigation is incapable of pecuniary estimation2 or in all civil actions which involve the title to,
or possession of, real property, or any interest therein, where the assessed value of the property
involved exceeds Twenty thousand pesos (P20,000.00) or for
_______________

1 Home Guaranty Corporation v. R-II Builders, Inc., G.R. No. 192649, March 9, 2011, 645 SCRA 219.
2 BP 129, Sec. 19(1).

661
VOL. 652, JUNE 22, 661
2011
Home Guaranty Corporation
vs. R-II Builders, Inc.
civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) x x
x.3
Moreover, under RA 8799 or the Securities Regulation Code, jurisdiction over intra-corporate
disputes was transferred from the Securities and Exchange Commission to the Courts of general
jurisdiction or the appropriate Regional Trial Court. This Court was given the power or
authority to designate the RTC branches that shall exercise jurisdiction over said cases.4
Section 13 of BP 129 created 13 RTCs, one RTC for each of the 13 judicial regions. The
National Capital Judicial Region (NCJR), consisting of Manila, Quezon, Pasay, Caloocan,
Navotas, Malabon, San Juan, Mandaluyong, Makati, Pasig, Pateros, Taguig, Marikina,
Paraaque, Las Pias, Muntinlupa and Valenzuela, has only one (1) RTC. The RTC-NCJR is the
only court which exercises judicial powers and functions through its various branches. Sec. 14 of
BP 129, as amended, provides for 276 Branches of the RTC-NCJR, among which are 97
organized Branches for the City of Manila (RTC Manila). Sec. 18 of BP 129 grants these 97
branches of the RTC in Manila of the RTC-NCJR authority over cases in the territorial area of
the City of Manila. Moreover, these branches of RTC in Manila are authorized by law to
determine the venue of all suits, proceedings or actions whether civil or criminal.
All cases of the 97 branches of RTC in Manila of the RTC-NCJR are distributed or assigned
among said branches through the raffle of cases, presided over by the Executive Judge pursuant
to existing Supreme Court circulars and resolutions. Undeniably, the case at bar was not filed by
respondent R-II Builders directly with Branch 24 of RTC Manila, but directly with the Clerk of
Court of the RTC-NCJR in Manila. The Clerk of Court computed the docket fees and
_______________

3 Id., Sec. 19(2).


4 RA 8799, Sec. 5(2).

662
662 SUPREME COURT
20

REPORTS
ANNOTATED
Home Guaranty Corporation
vs. R-II Builders, Inc.
respondent R-II Builders paid the fees based on said assessment. It was the Executive Judge of
the RTC in Manila who, after having initially determined that the case involved an intra-
corporate dispute, raffled the case to Branch 24, a regular RTC designated by this Court as a
commercial court:
The judge presiding over Branch 24 of RTC Manila, a designated Special Commercial Court
(SCC), however, determined that the case was not an intra-corporate dispute, and found it
proper that the case be returned to the Executive Judge of RTC Manila for re-raffling. Thus, it
was the Executive Judge of RTC Manila who conducted the re-raffling, and the case was then
transferred to Branch 22 of RTC Manila. The subject matter jurisdiction over the case belonged
and still remains with RTC Manila. The re-raffling only effected the transfer of the case from one
branch to another branch of the same court, namely RTC Manila, by rightful action of the
Executive Judge, not viaorder of Branch 24 of RTC Manila. The RTC of Manila still had
jurisdiction over the case; it was not lost by the erroneous raffle. Jurisdiction is conferred by
law.5 Once jurisdiction is acquired, it continues until the case is finally terminated. 6 Thus, the
complaint at bar should not be dismissed for lack of jurisdiction.
In Our assailed March 9, 2011 Decision, We usedCalleja v. Panday7 as precedent to the case at
bar. A second look at Callejashows that the facts and circumstances in said case are dissimilar to
the instant case. In Calleja, a complaint which involves an intra-corporate dispute was directly
filed with the RTC of San Jose, Camarines, Sur, Branch 58 which is not an SCC. It appears that
the case was referred to the Executive Judge of the RTC-Naga City which refused to re-
_______________

5 Southeast Asian Fisheries Development Center-Aquaculture Department v. National Labor Relations Commission,
G.R. No. 86773, February 14, 1992, 206 SCRA 283, 288.
6 Philippine National Bank v. Tejano, Jr., G.R. No. 173615, October 16, 2009, 604 SCRA 147, 159.
7 G.R. No. 168696, February 28, 2006, 483 SCRA 680.

663
VOL. 652, JUNE 22, 663
2011
Home Guaranty Corporation
vs. R-II Builders, Inc.
ceive the case folder, as it concluded that improper venue is not a ground for transferring said
case to another jurisdiction. The RTC-Branch 58 of San Jose, Camarines Sur, as a result, issued
an order transferring the case to RTC of Naga City, Branch 23 which is an SCC. The Court ruled
that this procedure cannot be allowed, because a commercial case has to be filed directly with the
Clerk of Court of the designated commercial court since only these courts have jurisdiction over
intra-corporate disputes pursuant to A.M. No. 03-03-03-SC effective July 1, 2003. The instant
case is NOT an intra-corporate dispute and, hence, is cognizable by a regular RTC. Said case was
incorrectly raffled by the Executive Judge to an SCC but was subsequently raffled to a regular
RTC upon discovery of the mistake. Moreover, the instant case was not filed directly with the
clerk of court of the SCC as required by A.M. No. 03-03-03-SC but with the Clerk of Court of the
21

RTC-Manila. Thus, there is nothing irregular with transfer of the case to a regular RTC viaraffle
by the Executive Judge. Clearly, the instant case cannot be dismissed on the alleged irregularity
or want of jurisdiction of Branch 24, for jurisdiction is indisputably with the regular RTC-Manila
and not the SCC. Here, jurisdiction was in the proper court, if not in the proper branch.
Reliance on Igot v. Court of Appeals8 is also misplaced, as that case recognized that only the
court that issued an injunction can impose sanctions for contempt of that injunction. While
referral was made due to lack of subject matter jurisdiction in that particular case, in the present
case, it was the court with proper jurisdiction over the subject matter that took action. Branch 24
of RTC Manila recognized that it did not have the authority to hear the case, and properly stood
back and let the Executive Judge of RTC Manila handle the re-raffle. Branch 24 of RTC Manila
took no direct action to transfer the case to another branch.
_______________

8 G.R. No. 150794, August 17, 2004, 436 SCRA 668.

664
664 SUPREME COURT
REPORTS
ANNOTATED
Home Guaranty Corporation
vs. R-II Builders, Inc.
Regarding the matter of the payment of docket fees, in the Decision dated March 9, 2011, We
further stated:
x x x (T)he CA also gravely erred in not ruling that respondent RTCs (Branch 22, the regular court)
jurisdiction over the case was curtailed by R-II Builders failure to pay the correct docket fees. In other
words, the jurisdictionally flawed transfer of the case from Branch 24, the SCC to Branch 22. the regular
court, is topped by another jurisdictional defect which is the non-payment of the correct docket fees.9
x x x (T)he CA failed to take into account the fact that R-II Builders original complaint andAmended and
Supplemental Complaint both interposed causes of action for conveyance and/or recovery of possession of
the entire Asset Pool. Indeed, in connection with its second cause of action for appointment as trustee in
its original complaint. R-II Builders distinctly sought the conveyance of the entireAsset Pool, which it
consistently estimated to be valued at P5,919,716,618.62 as of 30 June 2005. In its opposition to HGCs
motion to dismiss. R-II Builders even admitted that the case is a real action as it affects title to or
possession of real property or an interest therein.10 x x x
xxx For non-payment of the correct docket fee which, for real actions, should be computed on the basis of
the assessed value of the property, or if there is none, the estimated value thereof as alleged by the
claimant, respondent RTC should have denied admission of R-II Builders Second Amended
Complaint and ordered the dismissal of the case.11

I recommend the recall of Our previous rulings.


On September 1, 2005, the complaint subject of this instant petition was filed with the RTC
Manila, and the reliefs prayed for were as follows:
x x x [P]laintiff R-II Builders, Inc. respectfully prays, that this Honorable Court:
_______________

9 Home Guaranty Corporation v. R-II Builders, Inc., supra note 1.


10 Id.
22

11 Id.

665

VOL. 652, JUNE 22, 665


2011
Home Guaranty Corporation
vs. R-II Builders, Inc.
Upon the filing of the Complaint, issue 1. ex parte a temporary restraining order enjoining the
following: (i) the HGC and the NHA [National Housing Authority], and all persons acting under them,
from disposing of or conveying to the Social Security System, or to any other entity, any portion of the
properties conveyed to the HGC by the PDB [Planters Development Bank] under the Deed of Assignment
and Conveyance; (ii) the NHA from executing a Special Power of Attorney in favor of HGC, or any other
entity, that will serve as authority to accomplish the conveyance of the Asset Pool properties or any
portion thereof.
After due notice and hearing, issue a writ of preliminary injunction enjoining: (i) the HGC and the
NHA, and all persons acting under them, from disposing of or conveying to the Social Security System, or
to any other entity, any portion of the properties conveyed to the HGC by the PDB under the Deed of
Assignment and Conveyance during the pendency of the proceedings in this case; (ii) the NHA from
executing a Special Power of Attorney in favor of HGC, or any other entity, that will serve as authority to
accomplish the conveyance of the Asset Pool properties or any portion thereof, likewise during the
pendency of the proceedings in this case; and 2.
After trial on the merits, render judgment: 3.
Resolving and/or rescinding the Deed of Assignment and Conveyance executed by PDB in favor of
HGC; or in the alternative, declaring the nullity of the said instrument; (i)
Appointing R-II Builders. Inc. as the Trustee of the Asset Pool properties, with powers and
responsibilities including but not limiting to those stated x x x herein and those spelled out in the Re-
Stated Smokey Mountain Asset Pool Formation Trust Agreement x x x; (ii)
Ordering HGC to render an accounting of all properties of the Asset Pool transferred thereto under the
Deed of Assignment and Conveyance, and (iii) thereafter convey the entire Asset Pool to R-II
Builders, Inc. as the Trustee thereof;
Making the injunction permanent. (iv)
Ordering HGC to pay Attorneys Fees in the amount of Five Hundred Thousand Pesos (PhP
500,000.00) and the costs of suit. (v)666

666 SUPREME COURT


REPORTS
ANNOTATED
Home Guaranty Corporation
vs. R-II Builders, Inc.
Plaintiff prays for such further or other relief that this Honorable Court may deem just or equitable
under the premises.12 (Emphasis supplied.)

On August 2, 2007, respondent R-II Builders filed its Amended and Supplemental Complaint,
which prayed for the following reliefs:
After trial on the merits, render judgment: 5.
23

(i)Declaring the annulment of the Deed of Assignment and Conveyance executed by PDB in
favor of HGC; or in the alternative, declaring the nullity of the said instrument;
Appointing R-II Builders as the Trustee of the Asset Pool properties, with powers and
responsibilities including but not limiting to those stated x x x herein and those spelled out in the
Re-Stated Smokey Mountain Asset Pool Formation Trust Agreement; (ii)
Ordering HGC to render an accounting of all properties of the Asset Pool transferred thereto
under the Deed of Assignment and Conveyance, and thereafter convey (iii) title to and/or
possession of the entire Asset Pool to R-II Builders as the Trustee thereof which assets
consist of, but is not limited to, the following:
(a)105 parcels of land comprising the Smokey Mountain Site, and, the Reclamation Area,
consisting of 539,471.47 square meters, and all the buildings and improvements thereon, with
their corresponding certificates of title;
(b)shares of stock of Harbour Centre Port Terminal, Inc. which are presently registered
in the books of said company in the name of PDB for the account of the Smokey Mountain
Asset Pool; and
(c)other documents as listed in Annex E of the Contract of Guaranty.
(iv)Ordering NHA to pay the Asset Pool the amount of Php 1,803,729,757.88 including the
direct and indirect cost
_______________

12 Rollo, pp. 375-376.

667

VOL. 652, JUNE 22, 667


2011
Home Guaranty Corporation
vs. R-II Builders, Inc.
thereon as may be found by this Honorable Court to be due thereon;
(vMaking the injunction permanent; )
(viOrdering HGC )and the NHA to pay Attorneys Fees in the amount of P2,000,000 and the
costs of suit.13(Emphasis in boldface supplied: underscoring in the original.)

Home Guaranty Corporation (HGC) filed its answer to the said complaint. On September 2,
2007, respondent R-II Builders filed its Amended and Supplemental Complaint. This complaint
was admitted in the May 19, 2008 Order. On August 15, 2008, respondent R-II Builders filed its
Second Amended Complaint, which prayed for the following:
x x x [P]laintiff R-II Builders, Inc. respectfully prays that this Honorable Court:
Upon the filing of the Complaint, issue 1. ex parte a temporary restraining order enjoining
the following: (i) the HGC and the NHA, and all persons acting under them, from disposing of or
conveying to the Social Security System, or to any other entity, any portion of the properties
conveyed to the HGC by the PDB under the Deed of Assignment and Conveyance: (ii) the NHA
from executing a Special Power of Attorney in favor of HGC, or any other entity, that will serve
as authority to accomplish the conveyance of the Asset Pool properties or any portion thereof.
After due notice and hearing, issue a writ of preliminary injunction enjoining: (i) the HGC and
the NHA. and all persons acting under them, from disposing of or conveying to the Social
Security System, or to any other entity, any portion of the properties conveyed to the HGC by the
24

PDB under the Deed of Assignment and Conveyance during the pendency of the proceedings in
this case; (ii) the NHA from executing a Special Power of Attorney in favor of HGC, or any other
entity, that will serve as authority to accomplish the conveyance of the Asset Pool properties or
any portion thereof, likewise during the pendency of the proceedings in this case; and 2.
_______________

13 Id., at pp. 485-486.

668

668 SUPREME COURT


REPORTS
ANNOTATED
Home Guaranty Corporation
vs. R-II Builders, Inc.
3.Afterdue proceedings, appoint a receiver under Rule 59 of the Rules of Court who will
have the power to preserve, administer, liquidate and distribute the Asset Pool and perform the
powers and functions of a receiver provided by law.
After trial on the merits, render judgment: 4.
Resolving and/or rescinding the Deed of Assignment and Conveyance executed by PDB in
favor of HGC, (i) or in the alternative, declaring the nullity of the said instrument:
(ii)Approving the liquidation and distribution of the Asset Pool in accordance with the
beneficial rights and interests that had vested under the Joint Venture Agreement and Pool
Formation Agreement, as duly inventoried and accounted for by the appointed Receiver,
and thereafter particularly the transfer or conveyance of all remaining assets and values of
the Asset Pool to plaintiff R-II Builders:
Making the injunction permanent. (iii)
Ordering HGC to pay Attorneys Fees in the amount of Five Hundred Thousand Pesos
(PhP500,000.00) and the costs of suit. (iv)
Plaintiff prays for such further or other relief that this Honorable Court may deem just or
equitable.14 (Emphasis in the original.)

In its Order dated March 3, 2009, the RTC Manila granted the Motion to Admit the Second
Amended Complaint. The Answer to the Second Amended Complaint was filed by HGC in
October 2009. Thus, the Second Amended Complaint was vaiidly admitted by leave of court
pursuant to Sec. 3, Rule 10 of the Rules of Court, and HGC responded to said amended complaint
and there was already a JOINDER OF ISSUES on the Second Amended Complaint. The effect of
the amendment is that the amended pleadingsupersedes the pleadings that it amends,
pursuant to Sec. 8, Rule 10 of the Rules of Court. Thus, the Second Amended
Complaintsuperseded both the original complaint and the Amended and Supplemental Com-
_______________

14 Id., at pp. 535-537.

669
VOL. 652, JUNE 22, 669
2011
25

Home Guaranty Corporation


vs. R-II Builders, Inc.
plaint. The Second Amended Complaint asked for the resolution or rescission of the Deed of
Assignment and Conveyance (DAC); sought the appointment of a receiver; after the inventory is
completed, that the liquidation and distribution of the Asset Pool in accordance with the parties
agreements be approved andthe remaining assets and values of the Asset Pool be
transferred and conveyed to respondent R-II Builders; and the payment of attorneys
fees of PhP 500,000.
Whether or not the case is a real action, and whether or not the proper docket fees were paid,
one must look to the main cause of action of the case. In all instances, in the original Complaint,
the Amended and Supplemental Complaint and the Amended Complaint, it was all for the
resolution or rescission of the DAC, with the prayer for the provisional remedy of injunction and
the appointment of a trustee and subsequently a receiver. In the Second Amended Complaint,
the return of the remaining assets of the asset pool, if any, to respondent R-II Builders would
only be the result of the resolution or rescission of the DAC.
Even if real properly in the Asset Pool may change hands as a result of the case in the trial
court, the fact alone that real property is involved docs not make that property the basis of
computing the docket fees. De Leon v. Court of Appeals15has already settled the matter. That
case, citingBautista v. Lim,16 held that a case for rescission or annulment of contract is not
susceptible of pecniary estimation. On the other hand, in the Decision We rendered on July 25,
2005 inSerrano v. Delica,17 We ruled that the action for cancellation of contracts of sale and the
titles is a real action. Similarly, on February 10, 2009, We ruled in Ruby Shelter Builders and
_______________

15 G.R. No. 104796, March 6, 1998, 287 SCRA 94.


16 No. L-41430, February 19, 1979, 88 SCRA 479.
17 G.R. No. 136325, July 29, 2005, 465 SCRA 82.

670
670 SUPREME COURT
REPORTS
ANNOTATED
Home Guaranty Corporation
vs. R-II Builders, Inc.
Realty Development Corporation v. Formaran III18 (Ruby Shelter) that an action for nullification
of a Memorandum of Agreement which required the lot owner to issue deeds of sale and
cancellation of the Deeds of Sale is a real action.
Quite recently, however, in one caseLu v. Lu Ym, Sr.19similar to the facts of the instant
case, the Court on February 15, 2011 held that a complaint for declaration of nullity of share
issue, receivership and dissolution and asset liquidation of the Ludo and Luym Development
Corporation is a case incapable of pecuniary estimation since the recovery of the real or
personal property was merely a consequence of the principal action and the computation of
docket fees was not dependent on the value of the properties.
This latest ruling in Lu is a precedent to the case at bar and is the latest case law on the
matter. It prevails over our rulings in Serrano andRuby Shelter. In both Lu and the case at bar,
the main causes of action are similarthe nullification of the share issue in Lu and the Deed of
26

Assignment and Conveyance in the instant case; both prayed for receivers and both asked for
dissolution of a company in Lu and the asset pool in the instant case. R-II Builders asked for the
residual value of the assets after liquidation, while David Lu would get his share after
dissolution and liquidation. Ergo, the instant case is incapable of pecuniary estimation.
Moreover, it is clear as day that the prayer in the original complaint was for the conveyance of
the properties of the Asset Pool to R-II Builders as trustee but NOT as owner. A trustee does not
acquire ownership of the assets entrusted to him but merely manages it for the benefit of the
beneficiary pursuant to Rule 98 of the Rules of Court. The duties of the trustee are:
_______________

18 G.R. No. 175934, February 10, 2009, 578 SCRA 283.


19 G.R. Nos. 153690 & 170889, August 26, 2008, 563 SCRA 254.

671
VOL. 652, JUNE 22, 671
2011
Home Guaranty Corporation
vs. R-II Builders, Inc.
6. Sec.Conditions included in bond.
xxx
That b. he will manage and dispose of all such estate, and faithfully discharge his trust in
relation thereto, according to law and the will of the testator or the provisions of the instrument or order
under which he is appointed;
xxxx
d.That at the expiration of his trust he will settle his accounts in court and pay over and
deliver all the estate remaining in his hands, or due from him on such settlement, to the
person or persons entitled thereto. (Emphasis supplied.)

Since the conveyance of the Asset Pool to R-II Builders was not a transfer of ownership to said
company, but instead the Asset Pool was held only by R-II Builders as trustee in favor of the
rightful owners, then there is NO benefit or gain to R-II Builders and the instant case cannot be
classified as a real action. The present complaint of respondent R-II Builders still remains one
that involves an action incapable of pecuniary estimation, a subject matter which is within the
exclusive original jurisdiction of the RTC Manila, and the corresponding docket fees prescribed
by RTC Manila were already paid at the time of the filing of the original Complaint. Hence, there
is no basis for the payment of additional fees.
Even granting arguendothat the instant case is a real action and not one incapable of
pecuniary estimation, the case should not be dismissed but the payment of the additional fees
shall be made a lien on the judgment. It would not be in keeping with the liberal application of
the rules for the Court to order the dismissal of the complaint when the RTC Manila itself
committed the error of assigning the case to an SCC. when the subject matter did not involve an
intra-corporate dispute. The Court will deviate from the policy of securing a just, speedy and
inexpensive resolution of the case at bar if respondent R-II Builders paid the prescribed docket
fees, which We would later deem erroneous, and for which its complaint would be dismissed. If
We maintain that there was a
672
27

672 SUPREME COURT


REPORTS
ANNOTATED
Home Guaranty Corporation
vs. R-II Builders, Inc.
mistake in the imposition of the docket fees assessed by the Court itself through the error of a
trial court, then the better procedure is to consider the additional docket fees that may be due
and owing from respondent R-II Builders as a lien on the judgment award, instead of dismissing
the complaint.
Our Decision dated March 9, 201120 explicitly acknowledged that the complaint should NOT be
dismissed outright when the trial court finds that there is a need to pay additional fees during
the course of the proceedings. We explained:
Applying the rule that a case is deemed filed only upon payment of the docket fee regardless of the
actual date of filing in court in the landmark case of Manchester Development Corporation v. Court of
Appeals, this Court ruled that jurisdiction over any case is acquired only upon the payment of the
prescribed docket fee which is both mandatory and jurisdictional. To temper said ruling, the Court
subsequently issued the following guidelines inSun Insurance Office, Ltd. v. Hon. Maximiano
Asuncion,21viz.:
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 1. 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.
The same rule applies to permissive counterclaims, third-party claims and similar pleadings,
which shall not be considered filed until and unless the filing fee prescribed therefore is paid. The
court may also allow payment of said fee within a reasonable time but also in no case beyond its
applicable prescriptive or reglementary period. 2.
_______________

20 Home Guaranty Corporation v. R-II Builders, Inc., supra note 1.


21 G.R. Nos. 79937-38. February 13, 1989, 170 SCRA 274, 285.

673

VOL. 652, JUNE 22, 673


2011
Home Guaranty Corporation
vs. R-II Builders, Inc.
Where the trial court acquires jurisdiction over a claim by the filing of the
appropriate pleading and payment of the prescribed filing fee but, subsequently, the
judgment awards a claim not specified in the pleading, or if specified the same has been
left for determination by the court, the additional filing fee therefore shall constitute a
lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly
authorized deputy to enforce said lien and assess and collect the additional fee.
3. [Decision dated March 9, 2011, pp. 22-23]
28

Applying the third guideline in the above-citedSun Insurance Office, Ltd. to the complaint at
bar, even if it is conceded that the case is a real action, then the additional fee if any shall
constitute a lien on the judgment but the complaint shall not be dismissed for lack of jurisdiction.
We cite again Our more recent ruling in Lu,22 where We adopted the three-tiered approach
explained in Our previous August 26, 2008 Decision in Lu, thus:
In the instant case, however, we cannot grant the dismissal prayed for because of the following
reasons: First, the case instituted before the RTC is one incapable of pecuniary estimation. Hence, the
correct docket fees were paid. Second, John and LLDC are estopped from questioning the
jurisdiction of the trial court because of their active participation in the proceedings below, and because
the issue of payment of insufficient docket fees had been belatedly raised before the Court of Appeals, i.e.,
only in their motion for reconsideration. Lastly, assuming that the docket fees paid were truly
inadequate, the mistake was committed by the Clerk of Court who assessed the same and not
imputable to David: and as to the deficiency, if any, the same may instead be considered a lien
on the judgment that may thereafter be rendered. (Emphases in the original.)

_______________

22 Supra note 19; citing Lu v. Lu Ym., Sr., G.R. No. 153690, August 26, 2008, 563 SCRA 254, 274.

674
674 SUPREME COURT
REPORTS
ANNOTATED
Home Guaranty Corporation
vs. R-II Builders, Inc.
On another point, respondent R-II Builders likewise challenged Our ruling in the assailed
March 9, 2011 Decision that the conveyance and/or transfer of possession of the same properties
(in the Asset Pool) in the original complaint and Amended and Supplemental Complaint both
presuppose a real action for which appropriate docket fees computed on the basis of the assessed
or estimated values of said properties should have been assessed and paid. (Decision dated
March 9, 2011, p. 20) Clearly, we want respondent R-II Builders to pay docket fees on the entire
value of the properties in the asset Pool estimated at PhP 5,919,716,618.62. This has no basis
considering that R-II Builders is only asking the remaining assets of the Asset Pool after
inventory and accounting. To require said respondent docket fees of PhP 118,390,832.37 on said
value of the Asset Pool when it is only asking for the residual properties would be confiscatory
and a denial of access to the justice system.
Thus, even assuming that the R-II Builders complaint is a real action and additional fees
should be paid on the properties sought to be recovered, in this case, the remaining properties of
the ASSET Pool, the alternative is to require R-II Builders to pay additional fees based on the
estimated residual value of its rights in the Asset Pool to be determined by the trial court in a
hearing where the parties will be required to adduce evidence on the possible residual value that
will result from the resolution or rescission of the DAC. R-II Builders cannot be required to pay
docket fees based on the value of the entire Asset Pool of PhP 5,919,716,618.62, it having only an
interest in the residual value of the asset pool, which is what would remain after liquidation and
payment of the creditors. Even Our ruling in Ruby Shelter23 did not order the dismissal of the
29

case but simply directed the payment of additional fees to be charged on a real action. This
course of action would be most fair to all parties. The fallo of Ruby Shelterreads:
_______________

23 Supra note 18 at p. 307.

675
VOL. 652, JUNE 22, 675
2011
Home Guaranty Corporation
vs. R-II Builders, Inc.
WHEREFORE, premises considered, the instant Petition for Review is hereby DENIED. The
Decision, dated 22 November 2006. of the Court of Appeals in CA-G.R. SP No. 94800, which affirmed the
Orders dated 24 March 2006 and 29 March 2006 of the RTC, Branch 22, of Naga City, in Civil Case No.
RTC-2006-0030, ordering petitioner Ruby Shelter Builders and Realty Development Corporation to pay
additional docket/filing fees, computed based on Section 7(a), Rule 141 of the Rules of Court,
as amended, is hereby AFFIRMED. Costs against the petitioner. (Emphasis supplied.)

Therefore, Our March 9, 2011 Decision has to be recalled and set aside and the petition of
HGC denied. The RTC should be ordered to conduct a hearing to determine the estimated
residual value of the Asset Pool where the parties can present evidence thereon. After
determination of the estimate of the remaining assets and values that may possibly accrue to
respondent R-II Builders, then said respondent should be ordered to pay additional docket lees
based thereon within a reasonable time frame. Otherwise, the complaint will be dismissed for
nonpayment of docket fees.
Motion for Reconsideration denied with finality.

Note.It is axiomatic that jurisdiction is determined by the allegations in the complaint.


(Dasmarias Water District vs. Monterey Foods Corporation, 565 SCRA 624 [2008]