Case Digest (G.R. No. 205068)
Facts:
Heirs of Renato P. Dragon, represented by Patricia Angeli D. Nubla, v. The Manila Banking Corporation, G.R. No. 205068, March 06, 2019, Supreme Court Third Division, Leonen, J., writing for the Court.From 1976 to 1982, Renato P. Dragon obtained several loans from The Manila Banking Corporation evidenced by four promissory notes with a total principal of P6,945,642.00. Each note provided for interest, penalty interest on default, and attorney’s fees. After Manila Banking was placed under Bangko Sentral ng Pilipinas receivership in 1987, the bank’s receiver sent repeated demand letters to Dragon, the last dated August 12, 1998; a Statement of Account attached to that demand showed a claimed total of P44,038,995.00 (principal plus accrued interest, penalties and fees) as of July 31, 1998.
When Dragon failed to pay, Manila Banking filed a Complaint for collection of sum of money on January 7, 1999, praying for judgment on the principal P6,945,642.00 “plus interests, penalties, and attorney’s fees computed up to the date of actual payment.” Dragon answered, alleging partial payments and claiming novation: that Kalilid Wood Industries Corporation (of which he was an officer/stockholder) had assumed his loan obligations pursuant to a 1984 restructuring that was said to have been recognized in an April 22, 1991 RTC decision in a separate case. He also pleaded prescription and sought moral damages. Dragon did not, in his original answer, raise the trial court’s lack of jurisdiction for insufficiency of docket fees.
On September 26, 2007, the Regional Trial Court (Branch 150, Makati City) rendered judgment for Manila Banking ordering Dragon to pay the P6,945,642.00 principal plus interest and penalties stipulated in the notes and attorney’s fees equivalent to 5% of the total amount due; the RTC found Dragon’s novation and prescription defenses unpleaded or unproven and noted that Manila Banking failed to substantiate the larger Statement of Account computations. Both parties moved for reconsideration; Dragon raised, for the first time after judgment, the issue that Manila Banking had underpaid docket fees. The RTC denied the motions in an April 3, 2008 Order, relying on this Court’s decision in Sun Insurance Office, Ltd. v. Asuncion.
On appeal, the Court of Appeals in a June 27, 2012 Decision affirmed the RTC’s judgment (holding Dragon waived his defenses for not raising them at pre-trial, that the demand letters interrupted prescription, and that novation was not proved) and in a December 5, 2012 Resolution denied motions for reconsideration; the CA also held that deficient docket-fee payment did not automatically divest jurisdiction because the trial court could allow payment of the balance within a reasonable time or treat it as a lien on the judgment.
After Dragon’s death, his heirs were substituted and filed a Petition for Review on Certiorari under Rule 45 before the Supreme Court, arguing (1) the trial court lacked jurisdiction because Manila Banking paid only P34,975.75 in filing fees while its Statement of Account showed it was claiming much more (P44,038,995.00) and thus had concealed the true amount to evade correct docket fees; (2) the April 22, 1991 RTC decision operated as res judicata/novation; and (3) prescription had run. Manila Banking countered tha...(Subscriber-Only)
Issues:
- Are the existence of novation and the prescription of the action questions of fact not cognizable under a petition for review on certiorari under Rule 45?
- Did the Regional Trial Court acquire jurisdiction over Manila Banking’s Complaint despite alleged insufficient payment ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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