G.R. No. 208213 - Ayala Land, Inc. vs. Heirs of Lactao

On September 9, 2005, respondents (alleged heirs of Lucas Lactao and Silvestra Aquino) filed a complaint for quieting of title, annulment and cancellation of titles, and reconveyance over Lot 42-B-1, Pcs-13 (≈215,464 sqm) in Barangay Culiat, Caloocan (now Quezon City).
They paid initial docket fees of ₱6,828.80 and executed an affidavit of undertaking to secure any deficiency by first lien on judgment.
Petitioner Ayala Land, Inc., with Capitol Hills Golf & Country Club, moved to dismiss for prescription, laches, failure to state a cause of action, lack of jurisdiction (insufficient filing fees based on fair market value).
The RTC (Branch 58 then Branch 219) denied the motion to dismiss, granted a temporary restraining order, and upheld jurisdiction despite fee assessment issues.

Petitioner and co-defendant sought certiorari before the Court of Appeals (CA) challenging jurisdiction under the “Manchester rule.”
On May 2, 2008, the CA denied the petition, held that jurisdiction once acquired is never lost, and ordered the RTC Clerk to reassess and collect the correct docket fees (Rule 141, Sec. 7).
The Supreme Court (G.R. 184388 & 184376) denied separate petitions for review; decision became final and executory on June 16, 2009.

RTC issued several orders (Jan 6, Mar 15, Mar 22, Mar 26 2010) directing respondents to furnish data for reassessment of additional fees.
Petitioner insisted the correct fee (exclusive of JDF) was at least ₱62,903,240.00; respondents claimed ₱39,172,020.00 and moved, via May 24 2010 Omnibus Motion, to:

Determine factual/legal basis for fee computation (pre-taking vs. current value).
Declare respondents pauper litigants and make additional fees a lien on any judgment (citing Sun Insurance Office v. Asuncion).

RTC Branch 96 (Aug 18, 2011) granted Omnibus Motion—held respondents indigent, allowed lien on fees—and denied motion to dismiss. Reconsideration denied (Nov 21, 2011); directed Clerk to reassess fees.

On January 24, 2012, petitioner filed certiorari before CA (SP 122999) alleging grave abuse by RTC in awarding pauper status and lien treatment.
Meanwhile, respondents filed ex parte application; on May 4, 2012, RTC granted pauper-litigant status (no income/property to pay fees).
On March 6, 2013, the CA dismissed the certiorari petition as moot and academic due to the pauper order, but declared any exempted fees a lien on judgment. Petitioner’s motion for reconsideration was denied (July 16, 2013).
Petitioner then sought relief in the Supreme Court, assailing the CA’s mootness ruling and pauper declaration.

Did the Court of Appeals err in dismissing the petition as moot and academic upon the RTC’s May 4, 2012 pauper-litigant Order?
May respondents, after appellate directives on additional fees, timely and properly apply for indigent-litigant status and lien treatment?
Does a final appellate order requiring reassessment of docket fees preclude subsequent exemption motions based on indigence?
Should the case have been dismissed with prejudice for respondents’ non-payment of correctly assessed fees under Rule 141?