G.R. No. 85847 - Gregorio vs. Angeles

The petitioners, spouses Belen Gregorio, initiated a suit against the private respondents, spouses Sylvia and Ramon Carrion, as well as the Office of the Sheriff of Makati.
The dispute arose out of a loan transaction, wherein the petitioners claimed a sum of money encompassing various components: principal, attorney’s fees, interest, exemplary damages, and litigation expenses, among others.

On October 16, 1987, the petitioners filed a complaint (Civil Case No. 18058) in the Regional Trial Court, Branch 137, Makati, seeking:

Payment of the principal amount of ₱100,000.00 (subject to deductions for payments made).
Attorney’s fees calculated at 25% of the principal, or alternatively a fixed amount of ₱52,000.00.
Interest at 12% per annum for nine years, amounting to ₱108,000.00, integrated with the principal sum.
Exemplary damages to be adjudicated at the discretion of the court.
Litigation expenses of ₱10,000.00.
Other relief, such as issuing an order or writ of attachment due to conversion, as supported by the affidavit.

The petitioners failed to appear at the pre-trial conference and did not file a pre-trial brief, leading to the dismissal of the complaint.
Subsequently, on February 23, 1988, a second complaint (Civil Case No. 88-159) was filed in Regional Trial Court, Branch 58, Makati, mirroring the relief prayed in the first complaint.
The respondents moved to dismiss the second complaint on grounds including:

Failure to prosecute for an unreasonable length of time in accordance with Section 3, Rule 17 of the Revised Rules of Court.
An alleged defect based on the non-specification of the amount of exemplary damages both in the body and the prayer of the complaint.

The trial court initially denied the dismissal motion on the length of prosecution matter but later dismissed the complaint based on the administrative requirement set forth in Administration Circular No. 7, which re-affirmed the Supreme Court ruling in Manchester Development Corporation v. Court of Appeals.

The contention centered on the petitioners’ failure to specify a concrete sum for exemplary damages.
The respondents relied on the precedent in Manchester Development Corporation and the corresponding implementing circular, arguing that such omission warranted dismissal or expunction of the pleading.
The lower court dismissed the case on November 10, 1988, holding that the omission violated the requirement for complaints concerning damages recoverable only at the discretion of the court.

The petitioners elevated the case to the Supreme Court, contesting the dismissal and arguing that the omission was not fatal.
The main contention was that while the complaint failed to specify the amount for exemplary damages, it adequately stated the sums for actual damages, sufficient for docket fee computation.
The petitioners asserted that exemplary damages are discretionary by nature and that a precise amount is not always ascertainable at the pleading stage.

Whether the failure of the complaint to specify the sum of exemplary damages, along with other damages, justifies the dismissal or expunction of the pleading.

Does the omission of a specific amount for exemplary damages undermine the sufficiency of the complaint for the purpose of computing docket fees?
Can the determination of the amount of exemplary damages be deferred to the trial stage given their discretionary nature?
Is the administrative circular (Circular No. 7) implementing the Manchester ruling applicable to the case at hand regarding the specification of damages?