G.R. No. 114726 - Santos vs. Court of Appeals

In November 1992, the Municipality of Santa Cruz, Laguna, represented by Mayor Rodolfo S. San Luis, filed a complaint for unlawful detainer with damages against petitioners Arturo Santos, Delfin Granada, Rene Julio, Dante Zotomayor, Jesse Acapulco, Nene Julio, Dely Julio, Ronaldo Catindig, and Renato Catindig before the Municipal Trial Court (MTC) of Santa Cruz, Laguna (Civil Case No. 2322).
The Municipality claimed ownership of two parcels of land under Tax Declaration Nos. 12065 and 13088, upon which the petitioners built houses by the municipality’s tolerance.
The Municipality demanded petitioners to vacate the premises for road-widening, street extension, and new municipal public market construction, but petitioners refused.

Petitioners denied that the Municipality was the registered owner, claiming ownership in good faith through possession and occupation for over fifty years.
They challenged the jurisdiction of the MTC, asserting that the issue involved land ownership, which they had already filed as a quieting of title case before the Regional Trial Court (RTC).
On June 24, 1993, the MTC ordered petitioners to vacate and pay rentals of P500 per month from the time of the complaint until they vacated.
Petitioners filed a notice of appeal and supersedeas bond. On July 20, 1993, the MTC ordered the transmission of records to the RTC, Branch 27, Santa Cruz, Laguna.

On September 15, 1993, the RTC dismissed the appeal for failure to pay the corresponding appeal fee.
Petitioners’ motion for reconsideration was denied on October 27, 1993.
Petitioners filed a petition for certiorari with the Court of Appeals alleging grave abuse of discretion.
On March 8, 1994, the Court of Appeals affirmed the dismissal of the appeal.
Petitioners then filed a petition for review on certiorari before the Supreme Court.

Rule 141, Section 8(a)6 of the Revised Rules of Court, effective November 2, 1990, requires a P150 appeal fee for appeals from metropolitan and municipal trial courts.
The Interim Rules and Guidelines on the implementation of B.P. Blg. 129 (Judiciary Reorganization Act of 1981), particularly Sections 20 and 21, provide that appeals from MTC to RTC are perfected by filing a notice of appeal without a requirement as to payment of appeal fees for perfection.
Prior jurisprudence (Fontanar vs. Bonsubre and NAWASA vs. Secretary of Public Works) held that failure to pay appeal fees does not automatically dismiss an appeal but is discretionary.

Does the failure to pay the appeal fee automatically result in the dismissal of an appeal from the municipal trial court to the regional trial court?
What is the proper interpretation and application of appeal fee payment requirements in appeals from municipal trial courts under the Revised Rules of Court and the Interim Rules and Guidelines?
Whether petitioners should be given the opportunity to pay the appeal fee rather than have their appeal dismissed outright.