Civil Procedure: Rules of Court, Rule 1 (A.M. No. 19-10-20-SC)

 RULE 1
GENERAL PROVISIONS

Section 1. Title of the Rules. - These Rules shall be known and cited as the Rules of Court.

Section 2. In what courts applicable. - These Rules shall apply in all the courts, except as otherwise provided by the Supreme Court.

Section 3. Cases governed. - These Rules shall govern the procedure to be observed in actions, civil or criminal, and special proceedings.

(a) A civil action is one by which a party sues another for the enforcement or protection of a right, or the prevention or redress of a wrong.

A civil action may either be ordinary or special. Both are governed by the rules for ordinary civil actions, subject to the specific rules prescribed for a special civil action.

(b) A criminal action is one by which the State prosecutes a person for an act or omission punishable by law. 

(c) A special proceeding is a remedy by which a party seeks to establish a status, a right, or a particular fact. 

Section 4. In what cases not applicable. - These Rules shall not apply to election cases, land registration, cadastral, naturalization and insolvency proceedings, and other cases not herein provided for, except by analogy or in a suppletory character and whenever practicable and convenient. 

Section 5. Commencement of action. - A civil action is commenced by the filing of the original complaint in court. If an additional defendant is impleaded in a later pleading, the action is commenced with regard to him on the date of the filing of such later pleading, irrespective of whether the motion for its admission, if necessary, is denied by the court. 

Section 6. Construction. - These Rules shall be liberally construed in order to promote their objective of securing a just, speedy and inexpensive disposition of every action and proceeding. 

Notes:

• General Rule: The Rules of Court do not have retroactive effect. 
• Exception: They can, however, be made applicable to cases pending at the time of their passage and therefore are retroactive in that sense. 
• The rule-making power of the SC has the following limitations:
1. Simplified and inexpensive procedure for the speedy disposition of cases; 
2. Uniform for all courts of the same grade; and 
3. Shall not diminish, increase or modify substantive rights (Art. VIII Sec. 5[5], 1987 Constitution.)
• In the interest of just and expeditious proceedings, the Supreme Court may suspend the application of the Rules of Court and except a case from its operation because the Rules were precisely adopted with the primary objective of enhancing fair trial and expeditious justice.
• Section 2, states in what court or courts the rules apply as it says “these rules shall apply in all the courts except as otherwise provided by the Supreme Court.” Meaning, applicable to all courts except when the SC say otherwise.
• Example: 
• The Summary Rules on Procedure which is applicable to some cases in the MTC.
• Another example of when the SC says otherwise is Section 4, that the rules shall not apply to election cases, land registration, cadastral, naturalization, insolvency proceedings and other cases not herein provided for except by analogy. This is actually not a new provision. It used to be in Rule 143, now it is in Rule 1. 

Q: How come it mentions criminal cases and defines criminal actions when it is supposed to be 1997 Rules on Civil Procedure?

Rule 1 is the general provision for the entire Rules of Court. The title provides, “These rules shall be known as the ‘Rules of Court.’” This is the common denominator from the first to the last Rule. That is the reason why it says there ‘special proceedings,’ ‘civil cases’ and ‘criminal cases.’ 

Q: What is an action? 

An action is the legal and formal demand of one’s right from another person made and insisted upon in a court of justice. (Bouvier’s Law Dictionary) One party prosecutes another for the enforcement or protection of a right or the prevention or redress of a wrong.

Q: What is a claim?

It is a right possessed by one against another. 

The moment said claim is filed before a court, the claim is converted into an action or suit.

Q: Action and suit.

 In this jurisdiction, it is settled that the terms “action” and “suit” are synonymous. 

Civil Action and Criminal Action

• A civil action is one by which a party sues another for the enforcement or protection of a right, or the prevention or redress of a wrong. (Sec. 3[a] Rule 1). 
• A criminal action “is one by which the State prosecutes a person for an act or omission punishable by law” (Sec. 3[b] Rule 1)
• criminal = purpose is primarily punishment
• civil = purpose is primarily compensatory

Classification of Civil Action

• As to Nature
• Ordinary Civil Actions 
• Special Civil Actions 
• As to Cause or Foundation
• Real Actions
• Personal Actions
• Mixed Actions
• As to Place of Filing
• Local Actions 
• Transitory Actions
• As to Object
• Action In Personam 
• Action In Rem
• Action Quasi In Rem 

Classification as to Nature

Ordinary Civil Actions  & Special Civil Actions 

• The special civil actions are governed by Rules 62 to 71. Any action not among those mentioned is automatically ordinary. 

Q: What are the special civil actions?

 Rules 62 to 71: 

• 62 Interpleader
• 63 Declaratory Relief and Similar Remedies
• 64 Review of Judgments and Final Orders or Resolutions of the Commission on Elections and the Commission on Audit
• 65 Certiorari, Prohibition, Mandamus
• 66 Quo Warranto
• 67 Expropriation
• 68 Foreclosure of Real Estate Mortgage
• 69 Partition
• 70 Forcible Entry and Unlawful Detainer
• 71 Contempt.

Q: What is so important in distinguishing a special civil action from an ordinary civil action? 

A: What makes an action special is simply because of the fact that there are some specific rules prescribed for them which are not found in other rules. But to say that the rules on ordinary civil actions do not apply to special civil actions is false. The law is very clear. Both are governed by the rules on ordinary civil actions subject to the specific rules. 

• Therefore, in case of conflict between the specific rule governing a particular type of civil action and the ordinary, then you follow the specific provision. 
• But if the rules on special civil actions are silent, apply the ordinary rules.

Amberti vs CA - 195 SCRA 659 [1991] 

• This case involved a petition for certiorari (special civil action under Rule 65) and then before the respondent could answer the petition, he withdrew the petition. Later on he changed his mind and re-filed the petition. 

Issue: When you file a special civil action for certiorari and then before the other party could answer you withdraw it, is the withdrawal with or without prejudice? Can you re-file it? 

• There is no rule in Rule 65 answering that question so the SC had to resort to the ordinary rules by analogy.  Certiorari is similar to appeal although it is not really an appeal. And the SC looked at the law on appeal. 
• What happens when you perfect your appeal and then later on you withdraw your appeal? What will happen to the order or judgment? Rule 50 says that if you withdraw the appeal, the judgment appealed from will now become final and executory. 
• Therefore, since it is now final and executory, you cannot change it anymore. “Applying the foregoing rules in a supplementary manner (or by analogy), upon the withdrawal of a petition in a special civil action before the answer or comment thereto has been filed, the case shall stand as though no appeal has been taken, so that the judgment or order of the lower court being questioned becomes immediately final and executory.
• Thus, a resolution granting the withdrawal of such a petition is with prejudice and petitioner is precluded from bringing a second action based on the same subject matter.” Now, there are other classifications of civil actions which are not expressly stated in Section 3. The only one stated there is ordinary and special. 

Classification as to Cause or Foundation

Real, Personal or Mixed Actions 

Real Actions

• As an action where the issue or the subject involved is title to, ownership, possession of or interest over a real property like accion publiciana (recover possession), forcible entry, unlawful detainer, foreclosure of mortgage or real property, partition of real property. (Sec. 1, R 4) (c.f. Section 19, BP 129 – controversy relates to real property)
• It is founded on privity of real estate and filed in the court of the place where the property or any part thereof is situated. 

Personal Actions

• All other actions or, when the issue is not one of those – meaning, it is founded on privity of contract, or on quasi-delict, such as actions for a sum of money, or damages arising from breach of a contract, or for the enforcement or resolution of a contract, or for recovery of personal property. (Casilan vs. Tomassi, 90 Phil. 765; Cachero vs. Manila Yellow Taxicab, 101 Phil. 523; Bautista vs. Piguing, L-10006, Oct. 31, 1957) 
• It is filed in the court where the plaintiff or any of the defendants resides, at the option of the plaintiff.

Mixed Actions

• Mixture of real and personal actions. 
• Mixed actions are such as pertain in some degree to both real and personal and, therefore, are properly reducible to neither of them, being brought for the specific recovery of land and for damages sustained in respect of such land. (Dela Cruz vs. Seminary of Manila, 18 Phil. 330) 
• Like an action for recovery of a piece of land with damages it is a mixed action. However, it is more of real rather than personal. If the damage is only incidental, then it is more of a real action rather than a personal action. 
• In a real action, realty or an interest therein is the subject matter of the action. However, not every action involving a real property is a real action because the realty may only be incidental to the subject matter of the suit. To be a “real” action, it is not enough that the action must deal with real property. It is important that the matter in litigation must also involve any of the following issues: title to, ownership, possession, partition, foreclosure of mortgage or any interest in real property.

Examples:

Real Action

Personal Action

• An action for damages to real property, while involving a real property, does not involve any of the issues mentioned.
• An action to recover possession of real property plus damages is a real action because possession of the real property is involved. The aspect of damages is merely an incidental part of the main action, i.e., recovery of possession of real property. However, an action to recover possession of a personal property is a personal action.
• Where the allegations as well as of the complaint do not claim ownership of the lots in question or ask for possession of the same but instead seeks for the execution of a deed of sale by the defendants in favor of the plaintiff, the action is a personal action. (Adamos v. J. M. Tuazon & Co., Inc. 25 SCRA 529)
• An action for specific performance is a personal action as long as it does not involve a claim of or recovery of ownership of real property. 
• However, where a complaint is denominated as one of specific performance but nonetheless prays for the issuance of a deed of sale for a parcel of land for the plaintiff to acquire ownership of the land, its primary objective and nature is one to recover the parcel of land itself and thus, is deemed a real action.  (Gochan v. Gochan, 372 SCRA 356)
• If the action is denominated as one for specific performance, but the plaintiff actually seeks for the issuance of a deed of assignment in his favor of certain shares of stocks to regain ownership and possession of said shares, the action is not one for specific performance but a personal action for the recovery or property. The docket fee therefore, should be computed based on the value of the property and not based on the docket fee for specific performance.
• Where it is alleged in the complaint that the defendant breached the contract so that the plaintiff prays that the contract be rescinded and that the defendant be ordered to return possession of the hacienda to the plaintiff, the ultimate purpose or end of the action is to recover possession of real property and not a mere breach of contract.
• Where the action to annul or rescind a sale of real property has as its fundamental and prime objective the recovery of real property, the action is real.
• Where an award of a house and lot to the plaintiff was unilaterally cancelled, an action that seeks to annul the cancellation of the award over the said house and lot is a personal action. The action does not involve title to ownership or possession of real property. The nature of the action is one to compel the recognition of the validity of the previous award by seeking a declaration that the cancellation is null and void. 
• An action to foreclose a real estate mortgage is a real action, but an action to compel the mortgagee to accept payment of the mortgage debt and to release the mortgage is a personal action. 
• An action to annul a contract of loan and its accessory real estate mortgage is a personal action. In a personal action, the plaintiff seeks the recovery of personal property, the enforcement of a contract or the recovery of damages. In contrast, in a real action, the plaintiff seeks the recovery of real property, or, as indicated in Section 2(a), Rule 4 of the then Rules of Court, a real action is an action affecting title to real property or for the recovery of possession, or for partition or condemnation of, or foreclosure of mortgage on, real property.
• Although the main relief sought in the action is the delivery of the certificate of title, said relief, in turn depends upon who, between the parties, has a better right to the lot in question. It is not possible for the court to decide the main relief without passing upon the claim of the parties with respect to the title to and possession of the lot in question. The action is a real action.
• Where the sale is fictitious, with absolutely no consideration, it should be regarded as a non-existent contract. There being no contract between the parties, there is nothing in truth to annul by action. The action, therefore, cannot be an action for annulment but one for recovery of a fishpond, a real action. (Pascual vs. Pascual  73 Phil. 561).

Significance of distinction

• The distinction between a real action and a personal action is important for the purpose of determining the venue of the action. 
• Questions involving the propriety or impropriety of a particular venue are resolved by initially determining the nature of the action, i.e., if the action is personal or real. 
• A real action is “local”, i.e., its venue depends upon the location of the property involved in the location. 
• “Actions affecting title to or possession of real property, or interest therein, shall be commenced and tried in the proper court which has jurisdiction over the area wherein the real property involved, or apportion thereof is situated.” (Sec. 1 Rule 4) 
• A personal action is ‘transitory,’i.e., its venue depends upon the residence of the plaintiff or the defendant at the option of the plaintiff. 
• A personal action “may be commenced and tried where the plaintiff or any of the principal plaintiffs resides or where the defendant or any of the principal defendants resides, or in the case of a non-resident defendant, where he may be found, at the election of the plaintiff.” (Sec. 2 Rule 4). 
• Hence, if the question involves the venue of an action, the analysis will necessarily involve the following steps: 
1. A determination whether the action is real or personal
2. An application of the rules on venue under Rules 4. 
• Thus, an action for a sum of money, instituted by a resident of Manila against a resident of Quezon City, shall be filed either in Manila or Quezon City at the election of the plaintiff because the action is personal. An action to annul a sale of a land located in Baguio City where recovery of ownership is essentially the material issue in the case, must be filed in Baguio City. The action is a real action and must be filed in the place where the property is situated regardless of the residence of the parties

Classification as to the Place of Filing

Local and Transitory Actions

Local Action

• An action which can only be instituted in a particular place. 
• Good examples of local actions are real actions. 
• Real actions are also automatically local actions. 
• They can only be instituted in the place where the property is situated. 
• This is already provided by law (e.g. accion publiciana, forcible entry, unlawful detainer – can only be filed where the land is situated.) 

Transitory Actions

• Those which follow the party wherever he may reside. (1 Am. Jur. 430) 
• Personal actions are transitory – its filing is based on where the plaintiff or where the defendant resides at the option or election of the plaintiff. It is based on the residence of the parties.

Classification as to Object or Purpose

Actions in Personam, In Rem and Quasi In Rem

In Personam Action

• If the technical object of the suit is to establish a claim generally against some particular persons, with a judgment which, in theory, at least, binds his body or to bar some individual claim or objection, so that only certain persons are entitled to be heard. 
• Examples:
• action for specific performance; 
• action for breach of contract;
• action for sum of money; 
• action for damages.
• The purpose of a proceeding in personam is to impose through the judgment of a court, some responsibility or liability directly upon the person of the defendant.
• In an action in personam, no other than the defendant is sought to be held liable, not the whole world.
• The purpose is to bind the parties or where any judgment that the court will render in that case binds only the parties to the action and their privies or their successors-in-interest.
• Directed against specific persons and seek personal judgments.

In Rem Action

• If the object of the suit is to bar indifferently all who might be minded to make an objection of any sort against the rights sought to be established, and if anyone in the world has a right to be heard on the strength of alleging facts which, if true, show an inconsistent interest, the action.
• Examples:
• probate proceeding;
• cadastral proceeding.
• The purpose is to bind any and everyone or where the judgment which the court will render in the case binds not only the parties to the case but the whole world.
• Directed against the thing or property or status of a person and seek judgments with respect thereto as against the whole world.

Example:

• An action for the Recovery of land or accion publiciana. 
• The case is filed by P against D and after trial the court rendered judgment in favor of P ordering D to deliver the land to P. But here comes X claiming the same property. Is X barred from making his claim because the court, in the case of P vs. D already declared that P is entitled to the property? Is X bound by that judgment? 
• NO, because X is not a party to that case. She cannot be bound by a judgment where she is not a party. Hence, the action between P and D is an action in personam.
• Action for annulment of marriage or declaration of nullity of marriage. 
• Suppose the husband (H) files a case against his wife (W) to annul their marriage. After trial, the court rendered judgment annulling the marriage and it became final. So the parties are now both SINGLE. H meets another girl, A, and courted her and proposed marriage. Can A say "I cannot marry H because I know you are married and as far as I am concerned I am not bound by the judgment of annulment in the case because she was a not a party therein? When the court ruled in the case between H and W that the marriage is annulled is that judgment binding only on H and W, the parties therein."\
• No, it binds the whole world or anybody. 
• When an illegitimate child files a case against the father, for compulsory recognition and got a favorable judgment his/her status as a recognized child is not only binding on his/her father but is binding on the whole world. 
• Take note that an action in rem and in personam have often been confused with the classification of real and personal action, that an action in personam is also a personal action, or, when an action is in rem it is also a real action. It is wrong. The basis of the classification is different. An action could be as to cause or basis a real action. As to object, it could be in personam. In the same manner, it could be a personal action but an action in rem.
• E files a case against C to recover the possession of a piece of land. It is a REAL action because the subject is possession or ownership of real property. But because the purpose is to bind only E and C it is also an action IN PERSONAM. It is a real action as to cause, but as to object, it is in personam.
• P filed a case to annul his marriage with his wife D. It is a PERSONAL action because it does not involve title to, ownership etc., of his real property. It is about status. But it is also IN REM because the judgment therein is binding against the whole world.
• An action for ejectment is a real action because it involves the issue of possession of real property. It is also, however, an action in personam because the action is directed against a particular person who is sought to be held liable.
• An action for delaration of nullity of a marriage is a personal action because it is not founded on real estate. It is also in rem action because the issue of the status of a person is one directed against the whole world. One’s status is a matter that can be set up against anyone in the world. On the other hand, an action for damages is both a personal and in personam action.
• An action for specific performance is an action in personam. An action for specific performance and/or rescission is not an action in rem.
• A cadastral proceeding is an action in rem.
• A land registration proceeding is an action in rem. Hence, the failure to give a personal notice to the owners or claimants of the land is not a jurisdictional defect. It is the publication of such notice that brings in the whole world as a party in the case and vests the court with jurisdiction.
• An action to recover real property is a real action. It is however, also an action in personam for it binds only a particular individual.

Quasi In Rem Action

• ‘Quasi in rem’ is almost in rem. Actually, it is in personam but almost in rem.
• A proceeding to subject the interest of a named defendant over a particular property to an obligation or lien burdening it. Judgment is binding upon particular persons.
• An action quasi in rem is actually in personam because it is directed only against a particular individual but the purpose of the proceeding is to subject his property to the obligation or lien burdening it. 
• The object of the case is the sale or other disposition of property of the defendant over which you have a right or lien over the property. An action quasi in rem is one wherein an individual is named as defendant and the purpose of the proceeding is to subject his interest thereof to the obligation or lien burdening the property.
• The object of an action quasi in rem is the sale or disposition of the property whether by attachment, foreclosure or any other form of remedy.
• Examples:
• Action for partition;
• Action for accounting;
• Such actions are essentially for the purpose of affecting the defendant’s interest in the property and not to render a judgment against him; 
• Attachment;
• Foreclosure of mortgage.
• Illustration:
• An action to foreclose a mortgage is the best example of a civil action quasi in rem because there is a defendant (mortgagor) and the object of the case is to have the property mortgaged sold or disposed of in order to satisfy the mortgage lien of the mortgagee. It is in personam because it is directed only against the person who mortgaged to you but once the property is foreclosed, practically everybody has to respect it. That’s why it is called quasi in rem.
• Or, to borrow the language of the SC in simplifying the term quasi in rem, quasi in rem means ‘against the person in respect to the res, against the mortgagor in respect to the thing mortgaged.’

 

Importance of the distinction

• It determines whether the court must acquire jurisdiction over the person of the defendant and thus determine the mode of serving summons.
• If the action is in personam the court must acquire jurisdiction over the person of the defendant, thru personal service of summons. Service of summons by publication is not allowed. 
•  But if it is in rem jurisdiction over the person of the defendant is not required hence service of summons by publication is sufficient. Such is also true to quasi in rem action. What is important is that the court acquires jurisdiction over the res.

Civil Actions vs. Special Proceedings 

Q: Define a special proceeding. 

A: Rule 1, Section 3 [c]:

 A special proceeding is a remedy by which a party seeks to establish a status, a right, or a particular fact. (2a, R2) Special proceedings should not be confused with a civil action. 

• Special Proceedings are governed by Rules 72-109 of the Rules of Court. 

Distinguish a civil action from a special proceeding. 

A: The following:

• Definition:
• A  civil action is one by which a party sues another for the enforcement or protection of a right, or the prevention or redress of a wrong, whereas, 
• A  special proceeding is a remedy by which a party seeks to establish a status, a right, or a particular fact; 
• Parties:
• In a civil action, there are two (2) definite and particular adverse parties, the party who demands a right, called a plaintiff, and the other whom the right is sought, called a defendant,
• In a special proceeding, while there is a definite party petitioner, there is no definite adverse party as the proceeding is usually considered to be against the whole world
• Pleadings:
• A civil action requires the filing of formal pleadings
• In a special proceeding, relief may be obtained by mere application or petition; 
• Period of Appeal:
• The period to appeal in civil action is generally 15 days and the requirement is the filing of a notice of appeal.
• In special proceeding, the period to appeal is 30 days and aside from notice of appeal, the law requires the filing of a record on appeal.

A good example of a special proceeding is a petition for ADOPTION. It is a special proceeding because the purpose is to establish a status of paternity and filiation between the adopter and adopted who may not be related to each other.

Section 4.

• The Rules of Court do not apply to certain proceedings in court. 

Q: What court proceedings where the Rules of Court are not applicable?

• Election cases,
• Land registration cases,
• Cadastral cases,
• Naturalization cases,
• Insolvency proceedings, and 
• Other cases not herein provided for except by analogy of for suppletory purposes. 

• In these cases, the Rules of Court are suppletory in character. 
• In case of conflict between election law and the Rules of Court, forget the Rules of Court. 
• But when the Election Code is silent, you apply the Rules of Court by analogy or for suppletory purposes. 
• There are some election cases which fall within the jurisdiction of the courts, not necessarily COMELEC. 
• For example, violation of election code where the party may be adjudged to go to jail. That is a criminal case. 
• That is governed by the rules on criminal procedure. It is more on imprisonment. 

Section 5.

Q: When is a court action deemed commenced?

A: A civil action is commenced by the filing of the original complaint in court.

• Of course this is not really complete. 
• The filing of the original complaint in court must be accompanied by the payment of the correct docket fee. A complaint is not deemed filed until the docket fee is paid. 
• This is important to determine the exact date that the action has commenced because it is from that moment that the running of the prescriptive period is interrupted. 
• Civil actions are deemed commenced from the date of the filing and docketing of the complaint, without taking into account the issuance and service of summons.
• If the complete amount of the docket fee is not paid, the prescriptive period continues to run as the complaint is deemed not filed.
•  An action can be commenced by filing the complaint by registered mail, in which case, it is the date of mailing that is considered as the date of filing and not the date of the receipt thereof by the clerk of court.
• The second sentence of Section 5 states that, “If an additional defendant is impleaded in a later pleading, the action is commenced with regard to him on the date of the filing of such later pleading…”
• Example: Today (November 19, 1997), I filed a complaint against A. So, the action is commenced on Nov. 19, 1997. However next month, say, December 19, if there is an additional defendant, the date of the commencement of the action with regards to the additional defendant is not the date when the original action is filed, but on the date when he was included in the amended pleading. 

RULE 111 - PROSECUTION OF CIVIL ACTION

Section 1. Institution of criminal and civil actions. – (a) When a criminal action is instituted, the civil action for the recovery of civil liability arising from the offense charged shall be deemed instituted with the criminal action unless the offended party waives the civil action, reserves the right to institute it separately or institutes the civil action prior to the criminal action.

The reservation of the right to institute separately the civil action shall be made before the prosecution starts presenting its evidence and under circumstances affording the offended party a reasonable opportunity to make such reservation.

When the offended party seeks to enforce civil liability against the accused by way of moral, nominal, temperate, or exemplary damages without specifying the amount thereof in the complaint or information, the filing fees therefore shall constitute a first lien on the judgment awarding such damages.

Where the amount of damages, other than actual, is specified in the complaint or information, the corresponding filing fees shall be paid by the offended party upon the filing thereof in court.

Except as otherwise provided in these Rules, no filing fees shall be required for actual damages.

No counterclaim, cross-claim or third-party complaint may be filed by the accused in the criminal case, but any cause of action which could have been the subject thereof may be litigated in a separate civil action.

(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the corresponding civil action. No reservation to file such civil action separately shall be allowed.

Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees based on the amount of the check involved, which shall be considered as the actual damages claimed. Where the complaint or information also seeks to recover liquidated, moral, nominal, temperate or exemplary damages, the offended party shall pay additional filing fees based on the amounts alleged therein. If the amounts are not so alleged but any of these damages are subsequently awarded by the court, the filing fees based on the amount awarded shall constitute a first lien on the judgment.

Where the civil action has been filed separately and trial thereof has not yet commenced, it may be consolidated with the criminal action upon application with the court trying the latter case. If the application is granted, the trial of both actions shall proceed in accordance with section 2 of this Rule governing consolidation of the civil and criminal actions.

(Read: Magaspi v. Ramolete, Manchester v. CA)

Payment of Filing fees In Case Civil Aspect Is Deemed Impliedly Instituted In the Criminal Action

• In any event, the Court now makes that intent plainer, and in the interest of clarity and certainty, categorically declares for guidance of all concerned that when the civil action is deemed impliedly instituted with the criminal in accordance with Section 1, Rule 111 of the Rules of Court – because the offended party has not waived the civil action, or reserved the right to institute it separately, or instituted the civil action prior to the criminal action – the rule is as follows: 
1. When the amount of the damages, other than actual, is alleged in the complaint or information filed in court, then the corresponding filing fees shall be paid by the offended party upon filing thereof in court for trial; 
2. In any other case, however, -- i.e.  when the amount of damages is not so alleged in the complaint or information filed in court the corresponding filing fees need not be paid and shall simply constitute a first lien on the judgment, except in an award for actual damages.

Q: Suppose there was no mention of any claim for moral or exemplary damages, by not stating the amount claimed, can he still prove them during the trial? YES 

But he did not pay docket fee? Never mind, once it is awarded, there is now a lien in the judgment for the payment of the docket fee. 

For Independent Civil Actions 

• In the case of Sun Insurance if the damages was not mentioned in the complaint in the civil case they are deemed waived. If it is mentioned, and the amount is fixed you must pay the docket fee at the start of the case though if it is not complete, you are given the chance to complete the payment or amend the complaint within reasonable time. In criminal cases, even if there is no mention of damages in the information, you can still prove and claim them as long as there is no waiver or reservation. 

Sun Insurance Office Ltd. v. CA

Ruling:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.
2. 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.
3. 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 therefor 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.

Re Compulsory Counterclaim 

• Rule 141 on Legal Fees was revised effective August 26, 2004 by AM No. 04-2-04-SC and the revision includes the payment of docket fees not only for permissive counterclaim but also for compulsory counterclaims. 
• But the SC suspended the enforcement of the new rates of legal fees under Rule 141 effective September 21, 2004, with respect to compulsory counterclaims, among others. 
• It did not suspend the imposition of legal fees. 
• However, in Korea Technologies Co. Ltd. Vs. Lerma, 542 SCRA 1, January 7, 2008, the Court said: 
• “On July 17, 1998, at the time PGSMC filed its Answer incorporating its counterclaims against KOGIES, it was not liable to pay filing fees for said counterclaim being compulsory in nature. We stress, however, that effective August 16, 2004, under Sec. 7 of Rule 141, as amended by AM No. 04-2-04-SC, docket fees are now required to be paid in compulsory counterclaim or cross claims.”

Third Rule from Sun Insurance: 

• If the judgment awards a claim not specified in the pleadings, the filing fee therefor shall be a lien in the judgment. It shall be the responsibility of the clerk of Court or his duly-authorized deputy to enforce the lien, assess and collect the additional fee. 
• Q: When can this possibly happen?
• A: That can happen for example if I ask for damages. A man was hospitalized because of physical injuries. While still in the hospital he filed an action for damages and based the amount of damages on the current billing but alleged that he continues to incur expenses as may be determined in the course of trial. He paid the docket fee corresponding to the amount mentioned. After trial he was able to establish expenses in the sum of P50,000.00. 
• Q: Can the court award the P 50,000?
• A: Yes, because the additional expenses came only after the filing of the case. The additional docket fee will constitute a lien on the award

Ramones vs. Sps. Guimoc, G.R. No. 226645, August 13, 2018

Jurisprudence now uniformly holds that "when insufficient filing fees are initially paid by the plaintiffs and there is no intention to defraud the government, the Manchester rule does not apply." 

In line with this legal paradigm, prevailing case law demonstrates that "the non-payment of the prescribed filing fees at the time of the filing of the complaint or other initiatory pleading fails to vest jurisdiction over the case in the trial court. Yet, where the plaintiff has paid the amount of filing fees assessed by the clerk of court, and the amount paid turns out to be deficient, the trial court still acquires jurisdiction over the case, subject to the payment by the plaintiff of the deficiency assessment. The reason is that to penalize the party for the omission of the clerk of court is not fair if the party has acted in good faith.

Ng Soon v. Alday, G.R. No. 85879 September 29, 1989

The Court states that Manchester laid down the rule that all Complaints should specify the amount of damages prayed for not only in the body of the complaint but also in the prayer; that said damages shall be considered in the assessment of the filing fees in any case; and that any pleading that fails to comply with such requirement shall not be accepted nor admitted, or shall, otherwise, be expunged from the record. While it may be that the body of petitioner's Complaint below was silent as to the exact amount of moral and exemplary damages, and attorney's fees, the prayer did specify the amount of not less than P50,000.00 as moral and exemplary damages, and not less than P50,000.00 as attorney's fees. These amounts were definite enough and enabled the Clerk of Court of the lower Court to compute the docket fees pay.

First Sarmiento v. PBCOM G.R. No. 202836, June 19, 2018

To determine the nature of an action, whether or not its subject matter is capable or incapable of

pecuniary estimation, the nature of the principal action or relief sought must be ascertained. If the

principal relief is for the recovery of a sum of money or real property, then the action is capable of

pecuniary estimation. However, if the principal relief sought is not for the recovery of sum of money or

real property, even if a claim over a sum of money or real property results as a consequence of the

principal relief, the action is incapable of pecuniary estimation.

Tacay v. RTC of Tagum, G.R. Nos. 88075-77 December 20, 1989

• When this case was filed, there was no Sun Insurance decision yet. The guiding rule was still Manchester. But while this was pending the Sun Insurance was already out.
• Case involves recovery of land with damages, not purely for damages. Filing fee assessed based on assessed value of the land because it's a real action, and plaintiff paid accordingly. Defendant moved to dismiss, citing Manchester, as the complaint didn't specify the amount of damages claimed. RTC of Tagum denies the motion to dismiss. Defendant appeals to the Supreme Court (SC) invoking Manchester.
• SC states Manchester is no longer controlling due to Sun Insurance but introduces a new rule. 
• “Where the action involves real property and a related  claim for damages as well, the legal fees shall be assessed on the basis of both: a) the value of the property and  b) the total amount of related damages sought. The court acquires jurisdiction over the action if the filing of  the initiatory pleading is accompanied by the payment of the  requisite fees, or, if the fees are not paid at the time of the  filing of the pleading, as of the time of full payment of the fees  within such reasonable time as the court may grant, unless, of  course, prescription has set in the meantime.”
• In other words, the total docket fee must be based on the assessed value of the land and for the damages. Thus:
1. If only the land recovery fee is paid, the court does not dismiss but may exclude the claim for damages. 
2. Alternatively, citing Sun Insurance, the court may grant a reasonable time for payment of the balance.
• While Sun Insurance relaxed the rule (as to how or when to complete the payment), it did not however, effect any change in the rule that it is not only the filing of the complaint but also the payment of the docket fee that is necessary for the acquisition of the jurisdiction of the court over the complaint filed. If the filing of the initiatory pleading is not accompanied by payment of the docket fees, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. 

No “file now, pay later” policy 

Filipinas Shell Petroleum Corp. v. CA, G.R. No. 104658. April 7, 1993

Adrian dela Paz sued all oil companies (Shell, Caltex, Mobil, etc.) of the Philippines for infringement of patent with prayer for the payment of reasonable compensation for damages. According to him, these companies used in their operation a certain type of machine which he claimed he invented. His patent was infringed. Thus, all these companies are all liable to him for royalties. The estimated yearly royalty due him is P236,572. Since the violation has been for many years already, his claims reached millions. The trial court ordered him to pay P945,636.90 as docket fee. He had no money so he questioned it. The trial court ruled: “We will allow you to file the case and the docket fee is deductible from whatever judgment of damages shall be awarded by the court.”

The SC ruled that there is no such thing as file now pay later. No justification can be found to convert such payment to something akin to a contingent fee which would depend on the result of the case. “Filing fees are intended to take care of court expenses in the handling of cases in terms of cost of supplies, use of equipments, salaries and fringe benefits of personnel, etc., computed as to man hours used in handling of each case. The payment of said fees therefore, cannot be made dependent on the result of the action taken, without entailing tremendous losses to the government and to the judiciary in particular.” 

Q: What is the remedy of the plaintiff if he/she cannot really pay  the filing fee? Have himself declared by the court as a pauper litigant.

Lacson v. Reyes, G.R. No. 86250 February 26, 1990

There was a case filed and then the lawyer filed a motion to direct the plaintiff to pay him his attorney’s fees – a motion for payment of attorney’s fees. 

Is the lawyer required to pay a filing fee? Yes. 

“It may be true that the claim for attorney's fees was but an incident in the main case, still, it is not an escape valve from the payment of docket fees because as in all actions, whether separate or as an offshoot of a pending proceeding, the payment of docket fees is mandatory. The docket fee should be paid before the court would validly act on the motion.” 

Suson v. CA, G.R. No. 78684 April 12, 1989

Mortz filed a case against Charles in Leyte. After filing, the court dismissed the case because it should be filed in Cebu. Mortz wrote a letter to the Office of the Court Administrator (OCA) asking that the docket fee paid in Leyte be considered applicable to Cebu. OCA granted his request. Charles questioned it because of the rule that the payment of docket fee is jurisdictional

 “The OCA has neither the power nor the authority to exempt any party not otherwise exempt under the law or under the Rules of Court in the payment of the prescribed docket fees. It may be noteworthy to mention here that even in the Supreme Court, there are numerous instances when a litigant has had to re-file a petition previously dismissed by the Court due to a technicality (violation of a pertinent Circular), and in these instances, the litigant is required to pay the prescribed docket fee and not apply to the re-filed case the docket fees paid in the earlier dismissed case.” “In the case at bar, in the strict sense, Mortz’s complaint cannot be deemed to have been ‘re-filed’ in Cebu City because it was not originally filed in the same court but in the RTC Leyte. Thus, when Mortz’s complaint was docketed by the clerk of court of the RTC Cebu City, it became an entirely separate case from that dismissed by the RTC of Leyte due to improper venue. As far as the case in Cebu is concerned, while undoubtedly the order of dismissal is not an adjudication on the merits of the case, the order, nevertheless, is a final order. This means that when private respondent did not appeal therefrom, the order became final and executory for all legal intents and purposes.”

De Leon v. CA, March 6, 1998

The question for decision is whether in assessing the docket fees to be paid for the filing of an action for annulment or rescission of a contract of sale, the value of the real property, subject matter of the contract, should be used as basis, or whether the action should be considered as one which is not capable of pecuniary estimation and therefore the fee charged should be a flat rate of P400.00 as provided inRule 141, Section 7(b)(1) of the Rules of Court. Defendant argued that an action for annulment or rescission of a contract of sale of real property is a real action and, therefore, the amount of the docket fees to be paid by Plaintiff should be based either on the assessed value of the property, subject matter of the action, or its estimated value as alleged in the complaint. Since Plaintiff alleged that the land, in which they claimed an interest as heirs, had been sold for P4,378,000.00 to defendant, this amount should be considered the estimated value of the land for the purpose of determining the docket fees. Plaintiff countered that an action for annulment or rescission of a contract of sale of real property is incapable of pecuniary estimation and, so, the docket fees should be the fixed amount of P400.00 in Rule 141, Section 7(b).

Plaintiff is correct. “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. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim.”

However, where the basic issue is something other than the right to recover a sum of money, or where the money claim is purely incidental to, or a consequence of, the principal relief sought, like in suits to have the defendant perform his part of the contract (specific performance) and in actions for support, or for annulment of a judgment or to foreclose a mortgage, this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance.” 

“The rationale of the rule is plainly that the second class cases, besides the determination of damages, demand an inquiry into other factors which the law has deemed to be more within the competence of courts of first instance, which were the lowest courts of record at the time that the first organic laws of the Judiciary were enacted allocating jurisdiction.” “Actions for specific performance of contracts have been expressly pronounced to be exclusively cognizable by courts of first instance and no cogent reason appears, and none is here advanced by the parties, why an action for rescission (or resolution) should be differently treated, a "rescission" being a counterpart, so to speak, of ‘specific performance’.” 

“In both cases, the court would certainly have to undertake an investigation into facts that would justify one act or the other. No award for damages may be had in an action for rescission without first conducting an inquiry into matters which would justify the setting aside of a contract. Issues of the same nature may be raised by a party against whom an action for rescission has been brought, or by the plaintiff himself.” 

“It is, therefore, difficult to see why a prayer for damages in an action for rescission should be taken as the basis for concluding such action as one capable of pecuniary estimation — a prayer which must be included in the main action if plaintiff is to be compensated for what he may have suffered as a result of the breach committed by defendant, and not later on precluded from recovering damages by the rule against splitting a cause of action and discouraging multiplicity of suits.” 

“Thus, although eventually the result may be the recovery of land, it is the nature of the action as one for rescission of contract which is controlling.” “Since the action of Plaintiff against Defendant is solely for annulment or rescission which is not susceptible of pecuniary estimation, the action should not be confused and equated with the ‘value of the property’ subject of the transaction; that by the very nature of the case, the allegations, and specific prayer in the complaint, sans any prayer for recovery of money and/or value of the transaction, or for actual or compensatory damages, the assessment and collection of the legal fees should not be intertwined with the merits of the case and/or what may be its end result.”

“Since the action of Plaintiff against Defendant is solely for annulment or rescission which is not susceptible of pecuniary estimation, the action should not be confused and equated with the ‘value of the property’ subject of the transaction; that by the very nature of the case, the allegations, and specific prayer in the complaint, sans any prayer for recovery of money and/or value of the transaction, or for actual or compensatory damages, the assessment and collection of the legal fees should not be intertwined with the merits of the case and/or what may be its end result.” 

In Go vs. UCPB, GR No. 156182 Nov. 11, 2004 the court declared the following as real actions: 

    3) judicial foreclosure of real estate mortgage;

    4) actions to annul real estate mortgage; 

for the reason that a real estate mortgage is a real right as well as a real property. 

So an action to cancel or annul a real estate mortgage necessarily affects title to the real property, hence a real action and jurisdiction is determined by the assessed value of the property.

Totality Rule

• Now, continuing with Section 33, it says there in paragraph: “Provided further, That where there are several claims or causes of actions between the same or different parties, embodied in the same complaint, the amount of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the causes of action arose out of the same or different transactions.”
• Under this rule, where there are several claims or causes of actions between the same or different parties, embodied in the same complaint, the amount of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the causes of action arose out of the same or different transactions (Sec. 33 as amended by RA No. 7691; Pantrinco North Express Inc. vs. Standard Insurance Company Inc., 453 SCRA 482)

Illustration of Joinder of Causes of Action

• The defendant secured from me two loans covered by two promissory notes and all of them are due and he has not paid me any. Let's say each note covers a principal amount of P175,000.00. I decided to file one complaint embodying two causes of action against him although I have the option also to file two separate complaints. If you will look at the value of each claim which is P175,000 that is triable by the MTC but if you will add the claims that will be P350,000.00.
• Q: Which court will have jurisdiction? A: The RTC because the jurisdictional amount is the total amount. Never mind that there are two separate loans because the law says “irrespective of whether the cause of action arose out of the same or different transactions.” In the example, there are two causes of action arising from two separate transactions. Illustrate a joinder of causes of action arising from only one transaction. 
• Suppose the loan is payable in installments on separate dates. Each failure is a cause of action. Now in the examples, there is only one plaintiff and one defendant.
• Q: What about when there are several plaintiffs or defendants? There are four (4) passengers riding on a public vehicle. They were all injured when the bus met an accident and all of them were hospitalized. So after they were discharged, the four of them wanted to sue the bus company for damages arising from contract of carriage or culpa contractual. They decided to file only one complaint and, in effect, joined the four causes of action.
• Q: What will be now the basis of jurisdiction the claim of each plaintiff or the totality of the claims of the 4 plaintiffs? A: The totality of the claims. You apply the totality rule because the law says “where there are several claims or cause of action between the same or different parties.” So whether the parties are the same or the parties are different embodied in the same complaint the amount of the demand shall be the totality of the claims the totality rule applies in both situations.

Totality Rule Subject to Rule on Joinder of Parties

• Where two or more plaintiffs, having separate causes of action, sue one defendant or a plaintiff sues one or more defendants in a single complaint, based on several causes of action for or against each other, respectively, the totality rule applies only where there is a common question of fact or law among them as provided in Section 6 of Rule 3. 
• When there are several parties-plaintiffs or defendants and there are several causes of action, as in the last example given, when you join the causes of action there will necessarily be a joinder of parties. In such a case there can only be a proper joinder of causes of action when there is a proper joinder of parties and the totality rule applies only when the joinder is proper.
• Q: When is a joinder of parties proper? A: It is proper when there is a common question of fact and law. Note also that joinder of parties is permissive (Sec. 6, R3) 

Section 6.

Q: How do you interpret or construe the Rules of Court?

A: The purpose of Procedural Law is to hasten litigation. So you do not interpret it to prolong a case. That is based on the principle of liberal construction. 

• Cases should, as much as possible, be determined on the merits after the parties have been given full opportunity to ventilate their causes and defences, rather than on technicality or some  procedural imperfection. 
• After all, technical rules of procedure are not ends in themselves but are primarily devised to help in the proper and expedient dispensation of justice. In appropriate cases, therefore, the rules may be construed liberally in order to meet and advance the cause of substantial justice.
• So, the purpose of procedure is to help the hand that dispenses justice and not to tie these hands. Otherwise, the courts will become mere robots. And, as much as possible, courts should avoid technicalities to give way to the realities of the situation. 
•  In one case, “Lawsuits, unlike duels, are not to be won by a rapier’s thrust.”
• Procedural “rules are not intended to hamper litigants or complicate litigation but, indeed, to provide for a system under which suitors may be heard in the correct form and manner and at the prescribed time in a peaceful confrontation before a judge whose authority they acknowledge. The other alternative is the settlement of their conflict through the barrel of a gun.” 
• Meaning, the purpose of the rules is for people to fight each other in a civilized way. If you cannot accept the judicial system, what is your alternative? The only alternative is to shoot your opponent. We will settle our conflict through the barrel of a gun. For all its shortcomings and its defects, the judicial system is still the civilized way of dealing with your opponent.

 Q: When may lapses in the literal observance in the Rules of Court be excused?

Lapses in the literal observance of a rule of procedure will be overlooked: 

• when they do not involve public policy;
• when they arose from an honest mistake or unforeseen accident;
• when they have not prejudiced the adverse party; and 
• when they have not deprived the court of its authority

One final note, while it is true that the Rules of Court should be liberally construed as a general rule, there are certain provisions which according to the SC, should be strictly construed because they were intended precisely to minimize delay. These are provisions on:

• reglementary periods;
• rule on forum shopping;
• service of summons

A good example would be provisions which prescribe the time during which certain acts are going to be done, like the filing of an answer, because if you will disregard this, it will promote more delay rather than expedite litigations.

Another example is the filing of a notice of appeal. These are the provisions which are to be strictly construed because while it is true that the Rules of Procedure are to be liberally construed, it is not a license to completely ignore these rules.

Reasons which would warrant the suspension of the Rules:

1. the existence of special or compelling circumstances;
2. the merits of the case; 
3. a cause not entirely attributable to the fault or negligence of a party favored by the suspension of the rules;
4. a lack of any showing that the review sought is merely frivolous and dilatory and
5. the other party will not be unjustly prejudiced thereby