SUN INSURANCE OFFICE, LTD. (SIOL), E. B. PHILLIPS AND D. J. WARBY vs. HON. MAXIMIANO C. ASUNCION, Presiding Judge, and MANUEL CHUA UY PO TIONG; G.R. NO. 79937-38, FEB. 13, 1989

TOPIC: EFFECT OF NON-FILING OF FEE

SUN INSURANCE OFFICE, LTD. (SIOL), E. B. PHILLIPS AND D. J. WARBY vs. HON. MAXIMIANO C. ASUNCION, Presiding Judge, and MANUEL CHUA UY PO TIONG; G.R. NO. 79937-38, FEB. 13, 1989

NATURE OF THE CASE: The petition was prompted by the CA’s allegedly incorrect assessment of the damages sought by respondent Tiong in his complaint, which was to be the basis of the docket fee to be paid. The SC is then asked to resolve again the issue of whether or not a court acquires jurisdiction over a case when the correct and proper docket fee has not been paid.

FACTS: Sun Insurance filed a complaint for the consignation of a premium refund on a fire insurance policy with a prayer for the judicial declaration of its nullity against private respondent Manuel Uy Po Tiong with the RTC of Makati. Private respondent as declared in default for failure to file the required answer within the reglementary period. Later, Tiong also filed a case against Sun Insurance for the refund of premiums and the issuance of a writ of preliminary attachment, seeking the payment of actual, compensatory, moral, exemplary and liquidated damages, attorney’s fees, expenses of litigation, and costs of suit with the RTC of Quezon City. However, the amount of damages sought by Tiong was not specified, though it can be inferred from the body of the complaint that it's around P50 million. Tiong only paid P210 as docket fee for his complaint which prompted Sun Insurance to raise an objection, which was disregarded by the then presiding judge of the case Judge Jose Castro.

                Upon the order of the SC, the records of the complaint filed by Tiong along with 22 other cases assigned to the branches of the RTC of Quezon City were under investigation for under-assessment of docket fees. Later, the SC returned the records to the RTC and were re-raffled  to the other judges of the said court with the exclusion of Judge Castro. The SC also ordered the judges, through a Resolution, to reassess the docket fees of the re-raffled cases and that in case of deficiency, to order its payment. The clerks of court were also required to issue certificates of re-assessment of docket fees. However, the clerk of court who was assigned to reassess the docket fee of the complaint filed by Tiong had a difficulty complying with the Resolution because the exact amount sought  to be recovered was not indicated in the complaint. Thus, the now presiding Judge Maximiano Asuncion required the parties to comment on the clerk of court's report.

                Tiong filed a "Compliance" and a "Re-Amended Complaint" and indicated P10 million as actual compensatory damages in his prayer. But, in the second amended complaint Tiong filed, he alleged P44, 601, 623.70 as actual and compensatory damages and attorney's fees. Judge Asuncion admitted the second amended complaint and the clerk of court reassessed the docket fee to be P39, 786, which was subsequently paid by Tiong. Sun Insurance questioned the order of Judge Asuncion admitting the second amended complaint with the CA. However, while the case filed by Sun Insurance was still pending in the CA, Tiong filed another supplemental complaint claiming an additional P20 million as damages, making his total claim for damages to be P64, 601, 623.70. Seven months after filing said supplemental complaint, Tiong paid the additional docket fee of P80, 396.

                Subsequently, the CA ruled on the petition filed by Sun Insurance. The CA ordered the RTC to reassess the docket fee to be paid by Tiong on the basis of the amount of P25, 401, 707. The case was then elevated to the SC. But during the pendency of this petition in the SC and after the promulgation of the decision in Manchester, Tiong complied with the CA's decision and paid an additional docket fee of P62, 132.92 based on the amount stipulated by the CA. Thus, Tiong paid a total of P182, 824. 90 as docket fee.

Sun Insurance (Pet): The docket fee paid by Tiong is not sufficient. Tiong should pay a total of P257, 810.49 because the total damages Tiong actually sought was P64, 601, 620.70. Pursuant to the ruling in Manchester, Tiong's complaint should be dismissed and all incidents arising therefrom should be annulled for Tiong's failure to pay the proper docket fee.

Tiong (Res): The ruling in Manchester cannot be applied retroactively. At the time the complaint was instituted, the Manchester ruling was not yet made. The correct jurisprudence to apply in the case, then, is the Magaspi v. Ramolete doctrine wherein the SC held that the trial court acquired jurisdiction over the case even if the docket fee paid was insufficient.

ISSUES: 1) WON the Manchester ruling can be applied retroactively.

(MAIN ISSUE) 2) WON Tiong could be considered to have filed the case even if the docket fee paid was insufficient and that the trial court could be considered to have acquired jurisdiction over the case.

HELD: 1) Yes, The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating the procedure of the courts will be construed as applicable to actions pending and undetermined at  the time of their passage. Procedural laws are retrospective in that sense and to that extent.

2) Yes, although there was an obvious intent on the part of TIong to defraud the government of the docket fee due through his amendments in his complaints, a more liberal interpretation of the rules is called for considering that, unlike in the Manchester case, Tiong demonstrated his willingness to abide by the rules by paying the additional docket fees as required.

                Thus, even if the Manchester ruling was applied, the SC, through this case provided the following guidelines regarding docket fees:

                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 therefor 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.

                This petition was then dismissed. The Clerk of Court was also instructed to reassess and determine the additional filing fee to be paid by Tiong considering the total amount of the claim sought in his original complaint and supplemental complaint; and to require Tiong to pay the deficiency.

 -SJL