SPOUSES BELEN GREGORIO, PETITIONERS, VS. THE HONORABLE JUDGE ZOSIMO Z. ANGELES, PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, MAKATI, BRANCH 58, SPOUSES SYLVIA AND RAMON CARRION,…

Gregorio versus Angeles

The Case

This is a petition filed by the spouses Belen Gregorio against Judge Zosimo Angeles of the Regional Trial Court of Makati, Branch 58, and against the spouses Sylvia and Ramon Carrion. The petitioners ask the Supreme Court to set aside the trial court's order dismissing their complaint for a sum of money arising from a loan. The dismissal rested on the ground that the complaint failed to specify the amount of exemplary damages prayed for, which the trial court believed was required by the Manchester doctrine and by Administrative Circular Number 7. The case matters because it draws the line between a complaint that states enough sums for the clerk of court to compute docket fees and one that leaves the amount to mere guesswork, and because it reminds us that the Manchester rule is aimed at fraud on the government, not at every pleading that omits a figure.

Procedural History

The petitioners first sued the private respondents for a sum of money before the Regional Trial Court of Makati, Branch 137. That complaint was dismissed because the petitioners failed to appear at the pre-trial conference and to file a pre-trial brief. The petitioners then filed a second complaint, this time before the Regional Trial Court of Makati, Branch 58, presided over by Judge Zosimo Angeles. The private respondents moved to dismiss the second complaint on the ground of failure to prosecute for an unreasonable length of time, but the trial court denied that motion. The private respondents then filed a motion to dismiss and or to expunge the complaint from the record, arguing that the petitioners failed to specify in the body and in the prayer of the complaint the amount of exemplary damages they sought to recover, invoking the Manchester ruling and Administrative Circular Number 7. On November 10, 1988, the trial judge dismissed the case for failure of the plaintiff to comply with Administrative Circular Number 7. The petitioners went directly to the Supreme Court by petition, and the Court granted the petition and remanded the case to the court below for further proceedings.

Facts

On October 16, 1987, the petitioners sued the private respondents for a sum of money arising from a loan. The complaint prayed that the defendants be ordered to pay jointly and severally the principal of 100,000 pesos, less whatever was paid per evidence to be presented; attorney's fees of 25 percent of principal, plus interest, or 52,000 pesos; interests of 12 percent per annum amounting to 108,000 pesos for nine years, which is part of the principal; exemplary damages subject to the discretion of the court; expenses of litigation of 10,000 pesos; and such other relief as the court may deem just, including the issuance of a writ of attachment due to conversion. Because the petitioners failed to appear at the pre-trial conference and to file a pre-trial brief, the trial court dismissed that complaint.

On February 23, 1988, the petitioners filed a second complaint, this time before Branch 58 of the Regional Trial Court of Makati, with substantially the same prayer. The private respondents moved to dismiss on the ground of failure to prosecute for an unreasonable length of time under Section 3, Rule 17 of the Revised Rules of Court, but the trial court denied the motion.

The private respondents then filed a motion to dismiss and or to expunge the complaint from the record. They argued that the petitioners failed to specify both in the body and in the prayer of the complaint the amount of exemplary damages they sought to recover, relying on the Manchester ruling and on Administrative Circular Number 7. On November 10, 1988, the trial judge dismissed the case on that ground. Hence the petition before the Supreme Court.

Issues

• Whether or not the failure of the complaint to specify the sum of exemplary damages allegedly suffered warrants its dismissal under the Manchester doctrine and Administrative Circular Number 7.
• Whether or not the complaint stated enough sums for the clerk of court to compute the docket fees payable, such that the trial court erred in expunging the pleading.

Applicable Provisions

Article 2233 of the Civil Code provides:

Exemplary damages cannot be recovered as a matter of right; the court will decide whether or not they should be adjudicated.

This provision bears on the case because it explains why the amount of exemplary damages need not be fixed in the complaint: the court itself decides in the course of the trial whether they should be awarded and how much.

Section 3, Rule 17 of the Revised Rules of Court, invoked by the private respondents in their first motion to dismiss, provides:

If the plaintiff fails to appear at the time of the trial, or to prosecute his action for an unreasonable length of time, or to comply with these rules or any order of the court, the action may be dismissed upon motion of the defendant or upon the court's own motion.

This provision bears on the case because it was the ground of the private respondents' first motion to dismiss, which the trial court denied, and it frames the procedural setting of the dismissal that followed.

Ruling

On the first issue, the Court ruled that the failure to specify the amount of exemplary damages does not warrant dismissal. The complaint specified enough sums as and for actual damages, except exemplary damages, within the contemplation of Manchester and Circular Number 7. What would have been fatal was if the petitioners had mentioned no amount at all. That is the teaching of Manchester. The Court quoted Article 2233 of the Civil Code to show that exemplary damages cannot be recovered as a matter of right and that the court will decide whether or not they should be adjudicated. It also noted that the amount of exemplary damages need not be proved, so the amount payable may be determined in the course of the trial. The plaintiff could not have predicted how much exemplary losses they had incurred.

The Court was careful to clarify that it was not saying the amount of exemplary damages need never be alleged in all cases. It would have been different had the case been one purely for moral, nominal, temperate, or exemplary damages, as in libel, other than actual. In such cases, although these damages cannot be shown with certainty, the plaintiff must ascertain in his estimation the sums he wants and the sums required to determine the amount of docket and other fees. The case at bar is different. It is in essence a demand for specific performance as a consequence of a contract of loan, and the demand for exemplary damages was obviously meant to magnify the total claims, as is the usual practice, but the failure to specify it is not lethal. The court can assess the docketing fees on the basis of the actual damages sought.

On the second issue, the Court ruled that where the complaint states enough facts and sums to enable the Clerk of Court of the lower court to compute the docket fees payable, the trial court would be in error to expunge the pleading. What is fatal is if the complaint left to the judge mere guesswork as to the amounts payable as and by way of docket fees. Finally, the Court stressed that Manchester involved clearly an effort to defraud the government, and so resort to its ruling must be justified by a showing of a prior attempt to cheat the courts. This is not the case here.

Doctrine

A Bar candidate should retain these rules. First, the failure of a complaint to specify the amount of exemplary damages is not a ground for dismissal where the complaint states enough sums as and for actual damages for the clerk of court to compute the docket fees. Second, exemplary damages cannot be recovered as a matter of right, and the court will decide whether or not they should be adjudicated, so the amount payable may be determined in the course of the trial. Third, the Manchester rule is aimed at a prior attempt to cheat the courts or defraud the government, and it must not be applied mechanically to every pleading that omits a figure. Fourth, where the complaint is one purely for moral, nominal, temperate, or exemplary damages, as in libel, other than actual, the plaintiff must ascertain in his estimation the sums he wants and the sums required to determine the amount of docket and other fees.

Disposition

The petition was granted, and the case was remanded to the court below for further proceedings.

Remember This

The single line worth memorizing is that what is fatal is a complaint that leaves the judge to mere guesswork on docket fees, not one that omits the amount of exemplary damages while stating enough actual damages. Examiners like to use this case to test the application of the Manchester doctrine and Administrative Circular Number 7 to complaints that pray for exemplary damages subject to the discretion of the court.