CHEM TANKERS CORP., AND SPS. JOVEN O. SY & CORAZON QUE-SY, PLAINTIFFS-APPELLANTS, VS. DEVELOPMENT BANK OF THE PHILIPPINES, ET AL., DEFENDANTS-APPELLEES.
ANTONIO-VALENZUELA, J.:
The facts are as follows: On 17 May 2006, plaintiffs-appellants CTC and plaintiffs-appellants spouses Sy filed the Complaint[3] for the nullification of foreclosure proceedings and loan documents, and damages, before the RTC. Named defendants were the Development Bank of the Philippines (“defendant-appellee DBP”) and Special Sheriff Rene A. Gaerlan (“defendant-appellee Gaerlan”). Plaintiffs-appellants CTC and spouses paid P 39,260.00 as docket fees.
The Complaint alleged that: plaintiffs-appellants CTC and plaintiffs-appellants spouses Sy obtained a loan of P 64,000,000.00 from defendant-appellee DBP; to secure the loan, plaintiffs-appellants CTC and plaintiffs-appellants spouses Sy mortgaged property, including the tanker M/TKR CQS ODYSSEY (“the Tanker”); plaintiffs-appellants CTC and spouses requested for loan restructuring, and defendant-appellee DBP approved the request; defendant-appellee DBP led the plaintiffs-appellants CTC and plaintiffs-appellants spouses Sy to believe that no foreclosure proceedings would be initiated by defendant-appellee DBP; without the knowledge and consent of plaintiffs-appellants CTC and plaintiffs-appellants spouses Sy, defendant-appellee DBP initiated foreclosure proceedings; the defendant-appellee Gaerlan scheduled the public auction of the Tanker on 26 October 2005; extra-judicial foreclosure proceedings were held, and defendant-appellee DBP was the highest bidder for the Tanker, with the winning bid of P 18,138,000.00; the extra-judicial foreclosure proceedings were invalid, for being in violation of A.M. No. 99-10-05-0, and Act No. 3135 in relation to Act No. 1508; the extra-judicial foreclosure proceedings were premature and illegal, since plaintiffs-appellants CTC and plaintiffs-appellants spouses Sy’s payment of P 5,700,000.00 had not yet been accounted for; defendant-appellee DBP made plaintiffs-appellants CTC and Plaintiffs-appellants spouses Sy sign the blank Real Estate Mortgage and Promissory Note, and did not give them copies of the documents; these contracts were contracts of adhesion; the terms and conditions in the Real Estate Mortgage and the Promissory Note were different from what defendant-appellee Bank represented to plaintiffs-appellants CTC plaintiffs-appellants spouses Sy; the term allowing defendant-appellee DBP to fix the interest without notice, and to determine the procedure for the fixing of the interest was void; defendant-appellee DBP’s consideration of plaintiffs-appellants CTC and plaintiffs-appellants spouses Sy’s account as past due when the latter asked for re-computation, was done in bad faith.
The Complaint prayed that: the foreclosure proceedings be declared void; the defendant-appellee DBP be ordered to pay P 100,000.00 in attorney’s fees, P 100,000.00 in exemplary damages, and costs of suit.
On 03 July 2006, defendants-appellees DBP and Gaerlan filed the Motion to Dismiss.[4] The Motion alleged: venue was improperly laid, since real property foreclosed were in Cavite and Lucena City; the RTC did not acquire jurisdiction over the case; plaintiffs-appellants CTC and plaintiffs-appellants spouses Sy paid P39,260.00 as docket fees; per A.M. 04-2-04-SC, the basis for the docket fees was the value of the personal property in litigation as alleged by the claimant; the bid price for the Tanker was P18,138,000.00, while the appraised value was P36,276,000.00; plaintiffs-appellants CTC and plaintiffs-appellants spouses Sy understated the value of the Tanker, and failed to pay the correct amount of docket fees; the Complaint should be dismissed for failure to pay the correct amount of docket fees.
The RTC dismissed the Complaint on the ground of improper venue in the Order dated 04 September 2006,[5] and denied the subsequent Motion for Reconsideration[6] in the Order dated 05 January 2007[7] for lack of merit.
Plaintiffs-appellants CTC and plaintiffs-appellants spouses Sy filed the appeal before the Court of Appeals, docketed as CA-G.R. CV No. 88860. On 30 April 2010, the Court of Appeals issued the Decision[8] finding that the RTC was the proper venue, setting aside the Orders of the RTC, and remanding the case for continuation of proceedings.
Defendants-appellees DBP and Gaerlan filed the Manifestation and Motion[9] before the RTC praying for the suspension of the period to file answer, and the resolution of the other grounds (i.e., lack of jurisdiction, non-payment of docket fees) raised in the Motion to Dismiss. In the Order dated 07 November 2011[10], the RTC partially granted the Manifestation and Motion, and ordered that the proper docket fees be re-computed, and that plaintiffs-appellants CTC and plaintiffs-appellants spouses Sy pay any insufficiency resulting from the re-computation. The RTC also suspended the filing of an answer pending the resolution of the other grounds in the Motion to Dismiss.
In the Order dated 12 January 2012[11], the RTC determined docket fees to be P 367,357.60, and directed plaintiffs-appellants to pay the difference of P 328,097.60.
Plaintiffs-appellants CTC and spouses failed to pay the additional docket fees. Thus, on 26 April 2012 the RTC issued the assailed Order. The pertinent portion of the Order reads:
Considering that Plaintiff failed to pay the additional docket fees required in the Order dated 12 January 2012, despite receipt of said Order on November 24, 2011, the instant complaint is hereby dismissed.
SO ORDERED.
Thus, this appeal, with the following assignment of error:
THE COURT A QUO SERIOUSLY ERRED IN DISMISSING PLAINTIFFS-APPELLANTS’ COMPLAINT ON THE GROUND THAT THE ADDITIONAL DOCKET FEES WAS [sic] NOT PAID[12]
The issue is whether the RTC erred in issuing the assailed Order.
The Appellants’ Brief[13] answers in the affirmative. The RTC erred in issuing the assailed Order. It thrusts: when the RTC granted the Motion to Dismiss on the ground of improper venue, it denied all the other grounds relied upon by defendants-appellees DBP and Gaerlan; plaintiffs-appellants CTC and spouses did not question the assailed Order; the issues in the Motion to Dismiss can no longer be raised a second time, since they were also raised before the Court of Appeals in CA-G.R. CV No. 88860; since the RTC acquired jurisdiction over the parties, the case should proceed, and defendants-appellees DBP and Gaerlan should file an answer; plaintiffs-appellants CTC and spouses paid the docket fees, and had no personal knowledge as to the value of the Tanker; the deficiency in the payment of the docket fees should be considered a lien on the judgment to be remitted to the Clerk of Court upon the execution of judgment.
The Appellees’ Brief answers in the negative. The RTC did not err in issuing the assailed Order. It parries: plaintiffs-appellants CTC and spouses did not move for the reconsideration of the Order dated 07 November 2011, and the assailed; four months lapsed from the issuance of the assailed Order, but plaintiffs-appellants CTC and spouses failed to pay the additional docket fees; the RTC correctly dismissed the case for failure to comply with an order of the court, as provided in Rule 17, Section 3 of the Rules of Court; the Order dated 04 September 2006 did not resolve the other grounds for the Motion to Dismiss; non-payment of the correct amount of docket fees was a question of jurisdiction which can be raised at any stage of the proceedings; the RTC did not acquire jurisdiction over the case due to the non-payment of correct docket fees.
THE COURT’S RULING
We rule in the negative. The RTC did not err in issuing the assailed Order dismissing the complaint for failure to pay additional docket fees.
Plaintiffs-appellants CTC and spouses posit that the case should not be dismissed on the ground of non-payment of docket fees, and that the RTC validly acquired jurisdiction over the case.
We find this position untenable.
Rule 141, Section 1 of the Rules of Court is applicable. It reads:
SECTION 1. Payment of fees. – Upon the filing of the pleading or other application which initiates an action or proceeding, the fees prescribed therefor shall be paid in full.
The rule is that payment in full of the docket fees within the prescribed period is mandatory. In Manchester v. Court of Appeals,[14] it was held that a court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. The strict application of this rule was, however, relaxed 2 years later, in the case of Sun Insurance Office, Ltd. v. Asuncion,[15] where the Court decreed that where the initiatory pleading is not accompanied by the payment of the docket fee, the court may allow payment of the fee within a reasonable period of time, but in no case beyond the applicable prescriptive or reglementary period. This ruling was made on the premise that the plaintiff had demonstrated his willingness to abide by the rules by paying the additional docket fees required. Then in the case of United Overseas Bank v. Ros,[16] the Court explained that where the party does not deliberately intend to defraud the court in payment of docket fees, and manifests its willingness to abide by the rules by paying additional docket fees when required by the court, the liberal doctrine enunciated in Sun Insurance Office, Ltd., and not the strict regulations set in Manchester, will apply. In several instances, courts have allowed the relaxation of the rule on non-payment of docket fees in order to afford the parties the opportunity to fully ventilate their cases on the merits.[17] Thus, it lies upon the sound discretion of the courts whether to require immediate full payment, or to allow payment within a reasonable period of time, not beyond the prescriptive period.
In this case, plaintiffs-appellants CTC and spouses paid docket fees of P 39,260.00. The RTC subsequently assessed docket fees of P 367,357.60, and required the plaintiffs-appellants to pay the difference of P 328,097.60. Four months passed from the RTC’s directive to pay additional docket fees, but plaintiffs-appellants CTC and spouses did not pay the additional docket fees. Hence, the RTC dismissed the complaint.
We find that the RTC correctly dismissed the case. It depended upon the sound discretion of the RTC whether to apply the doctrine in Manchester or the doctrine in Sun Insurance Office, Ltd. The RTC exercised this discretion when it issued the Order dated 12 January 2012, and directed plaintiffs-appellants CTC and spouses to pay additional docket fees. Since plaintiffs-appellants CTC and spouses did not challenge the Order directing them to pay additional docket fees, the Order dated 12 January 2012 became final, and plaintiffs-appellants’ compliance with the Order became mandatory.
Plaintiffs-appellants CTC and spouses failed to comply with the order of the RTC and failed to pay additional docket fees. Under Rule 17, Section 3 of the Rules of Court[18], failure to comply with any order of the court or the Rules, may result in the dismissal of the complaint. Thus, the RTC’s dismissal of the case was justified.
Lastly, the reliance of plaintiffs-appellants CTC and spouses on Rule 141, Section 2 of the Rules of Court[19] is misplaced. 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 of the court, the additional filing fee therefor shall constitute a lien on the judgment.[20] In this case, the RTC did not award a claim not specified in the pleading, or award a claim specified and left to the determination of the RTC. Since there had been no judgment award in favor of plaintiffs-appellants CTC and spouses, there can be no lien constituted. Hence, Rule 141, Section 2 of the Rules of Court is not applicable.
We DISMISS the appeal, and AFFIRM the Order dated 26 April 2012 of the Regional Trial Court, Branch 146, Makati City, in Civil Case Number 06-404.
IT IS SO ORDERED.
Veloso (Chairperson) and Lantion, JJ., concur.
[1] CA Rollo, p. 14.
[2] Records, p. 126.
[3] Records, p. 01.
[4] Records, p. 27.
[5] Records, p. 53.
[6] Records, p. 56.
[7] Records, p. 80.
[8] Records, p. 96.
[9] Records, p. 105.
[10] Records, p. 121.
[11] Records, p. 125.
[12] Supra, at note 1.
[13] Id.
[14] GR No. 75919, 7 May 1987.
[15] GR No. 79937, 13 February 1989.
[16] GR No. 171532, 07 August 2007.
[17] Heirs of Reinoso, Sr. v. Court of Appeals, et al., G.R. No. 116121, 18 July 2011, citing Pedrosa v. Hill, 327 Phil. 153, 158 (1996); Manchester v. Court of Appeals, 233 Phil. 579 (1987); Sun Insurance Office, Ltd. v. Asuncion, 252 Phil. 280 (1989); United Overseas Bank v. Ros, G.R. No. 171532, 07 August 2007.
[18] SECTION 3. Dismissal due to fault of plaintiff. – If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may be dismissed upon motion of the defendant or upon the court’s own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the court.
[19] SECTION 2. Fees in lien. – Where the court in its final judgment awards a claim not alleged, or a relief different from, or more than that claimed in the pleading, the party concerned shall pay the additional fees which shall constitute a lien on the judgment in satisfaction of said lien. The clerk of court shall assess and collect the corresponding fees.
[20] Calibre Traders, Inc., et al. v. Bayer Philippines, Inc., G.R. No. 161431, 13 October 2010, citing Sun Insurance Office, Ltd. v. Asuncion, 252 Phil. 280, 291-293 (1989).