DAVAO LIGHT AND POWER CO., INC. PETITIONER, VS. HON. CRISTETO D. DINOPOL, PRESIDING JUDGE OF BRANCH XIII, REGIONAL TRIAL COURT OF DAVAO CITY, AND ABUNDIO T. MERCED, RESPONDENTS.

Davao Light and Power versus Dinopol

The Case

This is a petition for certiorari filed by Davao Light and Power Company against Judge Cristeto Dinopol of the Regional Trial Court of Davao City, Branch 13, and against Abundio Merced, the plaintiff in a damages suit pending before that court. Davao Light asks the Supreme Court to set aside the judge's order refusing to require Merced to pay additional docket fees after Merced finally quantified his money claims during trial. The case matters because it fixes the rule that all claims for damages must be specifically alleged in the complaint, and that the filing fees are assessed on the totality of those demands — a rule every practitioner must know before filing a damages action.

Procedural History

Merced filed a complaint for damages with preliminary mandatory injunction against Davao Light in the Regional Trial Court of Davao City. Because he did not quantify his principal claims, he paid only 82 pesos and 50 centavos in docket fees, based on the only amounts he specified — 20,000 pesos for attorney's fees and 5,000 pesos for expenses of litigation. During his direct examination in late 1985 and early 1986, he finally stated the specific amounts of his demands. Davao Light then filed a motion and a supplemental motion asking the court to require Merced to pay additional docket fees, assessed by the clerk of court at 35,080 pesos. Judge Dinopol denied both motions. Davao Light moved for reconsideration, and when more than four months passed without the judge resolving it, Davao Light came directly to the Supreme Court by petition for certiorari.

Facts

On July 31, 1984, Abundio Merced, doing business as Southern Engineering Works, sued Davao Light for damages after the company abruptly disconnected his electric meter. He claimed moral damages, loss of business and credit standing, and loss of profits. In his original and amended complaints, he did not quantify these claims, except for attorney's fees of 20,000 pesos and litigation expenses of 5,000 pesos. He stated that his principal claims would either be proven at trial or left to the discretion of the court.

Because only the quantified claims were considered, Merced paid docket fees of only 82 pesos and 50 centavos. During hearings in November 1985 and January 1986, he finally declared the specific amounts: 2,000,000 pesos for loss of business and credit standing, 5,000,000 pesos for moral damages, and 1,845,384 pesos and 50 centavos for loss of profits — a grand total of 8,845,384 pesos and 50 centavos.

Davao Light moved to require additional docket fees, invoking the Judiciary Reorganization law and the rule on filing fees, and the clerk of court assessed an additional 35,080 pesos. Judge Dinopol denied the motions, reasoning that the determination of filing fees is made at the time the action is filed, that no law prohibits claims from being proven at trial or left to the court's discretion, that assessment was premature, and that any monetary judgment would be subject to a lien for the fees.

Issues

• Whether or not the trial judge committed grave abuse of discretion in refusing to order the re-assessment of filing fees based on the totality of the principal demands.
• Whether or not the complaint, which failed to specify the amount of damages, should be treated as never having validly conferred jurisdiction on the trial court.

Applicable Provisions

Rule 11 of the Interim Rules of Court provides:

Rule 11. Application of the totality rule. — In actions where the jurisdiction of the court is dependent on the amount involved, the test of jurisdiction shall be the aggregate sum of all the money demands, exclusive only of interest and costs, irrespective of whether or not the separate claims are owned by or due to different parties. If any demand is for damages in a civil action, the amount thereof must be specifically alleged.

This rule is the heart of the case: it requires that damages be specifically alleged, and it makes the aggregate of all money demands the measure of both jurisdiction and filing fees.

Ruling

On the first issue, the Court ruled in favor of Davao Light. The last sentence of Rule 11 is new, and under it the old practice — where unspecified damages placed the action within the jurisdiction of the courts of first instance — no longer holds. All claims for damages must now be specifically alleged for the purpose of determining jurisdiction. The Court explained that this innovation aims to do away with the pernicious practice of litigants omitting the amount of damages, not only to choose the forum but also to mislead the docket clerk and evade the correct filing fees. When the judge refused to order re-assessment based on the totality of the demands, he acted in contravention of Rule 11, which was already in effect when the complaint was filed, and committed grave abuse of discretion calling for the corrective writ of certiorari.

On the second issue, the Court laid down the guideline from the Manchester Development Corporation case:

The Court serves warning that it will take drastic action upon a repetition of this unethical practice. To put a stop to this irregularity, henceforth, all complaints, petitions, answers and other similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any pleading that fails to comply with this requirement shall not be accepted nor admitted, nor shall otherwise be expunged from the record.

Strictly applied, this guideline would render all proceedings in the civil case null and void, because the trial court never acquired jurisdiction upon payment of only 82 pesos and 50 centavos. But the Court noted that the assailed order was issued before the Manchester resolution, so strict application would be unduly harsh. Instead, the Court gave Merced a non-extendible period of five days to amend his complaint by specifying the damages in both the body and the prayer, failing which the action would be dismissed.

Doctrine

First, under the totality rule, the test of jurisdiction and the basis for filing fees is the aggregate sum of all money demands, exclusive of interest and costs. Second, in a civil action for damages, the amount must be specifically alleged — not left to proof at trial or to the court's discretion. Third, a complaint that fails to specify damages in both the body and the prayer shall not be accepted, admitted, or shall be expunged from the record, and the damages alleged are considered in assessing filing fees. Fourth, a judge who refuses to enforce these rules commits grave abuse of discretion correctible by certiorari.

Disposition

The petition was granted; the order of February 14, 1986 was set aside, Merced was given five non-extendible days to amend his complaint by specifying the damages or face dismissal, the docket clerk was directed to assess fees on the aggregate demand, and Judge Dinopol was admonished to strictly adhere to the Manchester guideline.

Remember This

Memorize this line: all claims for damages must be specifically alleged in both the body and the prayer, and filing fees are assessed on the totality of the demands. Examiners use this case to test the totality rule, the consequences of an unquantified damages prayer, and the remedy of certiorari against a judge who refuses to collect the correct docket fees.