Case Summary (G.R. No. 169108)
Terms of the Compromise Agreement (May 22, 1998)
- IBC (First Party) agreed to pay P2,000,000 (25% immediately, balance in installments).
- IBC agreed to offset 320 daytime 30-second spots against a separate marketing fee (at P12,500/spot) to be used on a Run-of-Schedule (ROS) basis.
- Paragraph 4 provided that the remaining 6,080 primetime 30-second spots would be for commercial placement and, in the event of privatization, would be valued at the company’s prevailing market price and made payable upon demand.
- Parties agreed to move for dismissal of the then-pending RTC case; accordingly, Civil Case No. Q-96-26330 was dismissed on July 4, 1998.
Subsequent Litigation and Competing Claims
- On December 18, 2000, after privatization and under new management, petitioner IBC filed Civil Case No. Q-00-42707 seeking declaration that the Compromise Agreement was null and void ab initio, alleging lack of cause/object and absence of required PCGG approval, and claiming restitution (refund of P2,000,000) and recovery for overavailment of ROS spots (P1,140,187.50), plus exemplary damages and fees.
- On January 5, 2001, Antonio Salvador filed Civil Case No. Q-01-43036 for Specific Performance and Damages, alleging IBC refused to comply with paragraph 4; he sought specific performance and monetary reliefs (P200,000 actual damages, P500,000 moral damages, P300,000 attorney’s fees), later quantifying the monetized value of the primetime spots in a writ-of-attachment motion at an average P90,000 per 30-second spot (totaling P540,000,000).
Consolidation, Procedural Motions, and Docket Fee Dispute
- The two cases were consolidated before Branch 99. Salvador filed a motion for writ of attachment (Sept. 23, 2003) and later a motion for summary judgment (Feb. 28, 2004).
- IBC moved (Feb. 5, 2004) to dismiss or suspend proceedings on the ground that Salvador had paid only P8,517.50 in docket fees while his claim (as reflected in his attachment motion) required payment of much higher docket fees (IBC computed unpaid docket fees at P5,452,237.50). IBC argued the deficiency deprived the RTC of jurisdiction or, at minimum, warranted suspension until correct docket fees were paid. Salvador opposed the motion.
Trial Court Ruling on Docket Fees and Subsequent Summary Judgment
- On March 26, 2004, the trial court denied IBC’s motion to dismiss/suspend, holding that IBC was estopped from raising the defective fee issue due to its active participation and that the deficiency did not divest the court of jurisdiction. The trial court indicated unpaid fees would be treated as a judgment lien if the decision favored Salvador. IBC’s motion for reconsideration was denied.
- On August 20, 2004, the trial court rendered summary judgment in favor of Salvador, denying the writ of attachment as moot and ordering IBC to pay Salvador Php540,000,000 (rounded monetized value of 5,980 out of 6,080 airtime spots) with 12% interest per annum from filing (Jan. 2001) until fully paid, plus Php100,000 attorney’s fees.
Court of Appeals Proceedings and Decision
- IBC petitioned the Court of Appeals via certiorari to annul the trial court’s denial of dismissal/suspension and raise the jurisdictional issue regarding insufficient docket fees. The Court of Appeals, in a March 16, 2005 Decision, denied the petition and found no abuse of discretion by the trial court. The CA held that non-payment of appropriate docket fees did not divest the trial court of jurisdiction and that assessment and collection of any additional fees was the responsibility of the Clerk of Court or an authorized deputy. IBC’s motion for reconsideration was denied (July 22, 2005), prompting the present petition for review.
Central Legal Issue Presented
- Whether the trial court acquired and retained jurisdiction over Salvador’s specific performance action despite the allegedly insufficient docket fees paid at the time of filing, and whether the court should have suspended proceedings pending payment of correct docket fees.
Governing Jurisprudence and Rules Applied
- Manchester Development Corp. v. Court of Appeals: emphasized that courts acquire jurisdiction upon payment of prescribed docket fees and cautioned against deliberate omission to evade fees; declared that amounts sought must be specified in the body and prayer to prevent evasion. The Supreme Court in the present decision notes Manchester’s strictness.
- Sun Insurance Office, Ltd. v. Asuncion: relaxed Manchester by allowing courts discretion to permit payment within a reasonable time when non-payment is not fraudulent; held additional fees for awards beyond pleadings constitute a lien and are for the clerk to assess and collect.
- Tacay v. RTC clarified that “awards of claims not specified in the pleading” refers to damages arising after filing.
- Proton Pilipinas v. Banque Nationale de Paris and Heirs of Bertuldo Hinog: reiterated that inadequate initial payment does not automatically result in dismissal where there was no intent to defraud and the party demonstrates willingness to pay additional fees; jurisdiction is not necessarily defeated where deficiency can be remedied within applicable periods.
- Rule 141, Sec. 2, Rules of Court: provides that if the court awards a claim not alleged or a relief different or greater than claimed, the additional fees shall constitute a lien on the judgment; the clerk shall assess and collect the fees.
Application of Law to the Facts
- At the time Salvador filed his complaint (Jan. 5, 2001) his prayer sought specific performance and monetary damages that were legally quantifiable only in part (P200,000 actual, P500,000 moral, P300,000 attorney’s fees). Paragraph 4’s monetary value (the 6,080 primetime spots) depended on the future event of privatization and the prevailing market price — it could not be definitively quantified at filing.
- The P8,517.50 docket fees Salvador paid were computed based on amounts legally ascertainable at filing. The trial court accepted the assessed fees as paid and thereby properly acquired jurisdiction. Salvador relied on the docket clerk’s assessment; there was no showing of bad faith or intent to defraud. The Court applied Sun Insurance and related jurisprudence to conclude Manchester’s strict rule did not apply where there was no fraudulent intent and the party demonstrated willingness to pay additional fees.
- When the trial
Case Syllabus (G.R. No. 169108)
Procedural Posture and Reliefs Sought
- Petition for review on certiorari to the Supreme Court assails the March 16, 2005 Decision of the Court of Appeals in CA-G.R. SP No. 85085 which denied the petition filed by petitioner IBC-13 for lack of merit, and the July 22, 2005 Resolution denying motion for reconsideration.
- The petition challenges the Court of Appeals’ affirmance of the trial court’s denial of petitioner’s motion to dismiss and/or suspend proceedings for alleged insufficient docket fees and related jurisdictional infirmity.
- The Supreme Court was asked to review whether the trial court acquired and retained jurisdiction despite alleged deficient docket fees and whether proceedings should have been suspended or dismissed.
Parties and Representation
- Petitioner: Intercontinental Broadcasting Corporation (IBC-13), represented by its President Renato Bello.
- Private respondent/plaintiff in the underlying action: Antonio Salvador.
- Public respondent/judge of the trial court involved: Hon. Rose Marie Alonzo-Legasto (Branch 99 of the Regional Trial Court of Quezon City).
- Decision of the Supreme Court penned by Justice Ynares-Santiago; concurrence by Panganiban, C.J., Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ.
Underlying Dispute — Origin and Compromise Agreement (22 May 1998)
- The parties sought to put an end to Civil Case No. Q-96-26330 pending before Branch 88, RTC Quezon City by entering into a Compromise Agreement dated 22 May 1998.
- Key stipulations of the Compromise Agreement included:
- (1) FIRST PARTY (IBC) to pay TWO MILLION (P2,000,000.00) PESOS as shown by the attached statement (Annex "A") verified and reconciled with IBC’s books.
- (2) Simultaneous to signing, FIRST PARTY to pay 25% of the P2,000,000.00, with the balance paid in staggered payments, payable in three installments.
- (3) FIRST PARTY agrees to offset airtime 320-30's daytime spots against the FOUR MILLION (P4,000,000.00) marketing fee due to FIRST PARTY under a separate Marketing Agreement between IBC and Colours Network, Inc., represented by ANTONIO SALVADOR, at P12,500/spot; these spots to be utilized by SECOND PARTY on ROS basis.
- (4) The balance of 6,080-30's primetime spots airtime to mean usage in commercial placement for TV commercials; in the event of privatization the spots will be valued at the company’s prevailing market price and be made payable upon demand.
- (5) Both parties to submit a motion to dismiss the case pending before Branch 88, RTC Quezon City.
- With a joint manifestation and motion to dismiss submitted on 8 June 1998, Civil Case No. Q-96-26330 was dismissed on July 4, 1998.
Subsequent Actions — Petitioner’s Later Complaint (18 December 2000)
- On 18 December 2000 petitioner (by then privatized and under new management) filed an action seeking to declare the Compromise Agreement null and void ab initio.
- Grounds alleged by petitioner included: non-existent cause or object; agreement entered into by erstwhile management without requisite approval of the Presidential Commission on Good Government (PCGG).
- Petitioner sought refund of P2,000,000.00 received by private respondent and recovery of overavailment of 506.75 ROS spots amounting to P1,140,187.50.
- Petitioner’s complaint, incorporating claims for exemplary damages, attorney’s fees and litigation expenses, was docketed as Civil Case No. Q-00-42707 before Branch 99, RTC Quezon City.
Private Respondent’s Parallel Action — Complaint for Specific Performance and Damages (5 January 2001)
- Private respondent (Antonio Salvador) filed a complaint for Specific Performance and Damages against IBC-13, its President Boots Anson Roa, and Legal Counsel and Corporate Secretary Atty. Azucena Garcia, docketed as Civil Case No. Q-01-43036 before Branch 220, RTC Quezon City.
- The complaint sought:
- An order directing IBC to comply with paragraph 4 of the Compromise Agreement in accordance with its tenor.
- Monetary reliefs of P200,000.00 as actual damages; P500,000.00 as moral damages; and P300,000.00 as attorney’s fees.
- Such other equitable reliefs as warranted.
Consolidation and Pre-Judgment Motions
- The two cases were subsequently consolidated before Branch 99, RTC Quezon City.
- Private respondent filed a motion for issuance of a writ of attachment on September 23, 2003, asserting a claim computed on an average price of P90,000.00 per 30-second spot that totaled P540,000,000.00.
- Allegations in that motion included gross insincerity and bad faith by petitioner in instituting its action to declare the Compromise Agreement void; contention that petitioner’s sale of its DMZ-FM Station to Blockbuster Broadcasting System indicated intent to defeat respondent’s claim.
- Private respondent filed a motion for summary judgment dated February 28, 2004, alleging petitioner’s answer tendered no genuine issue of fact.
Petitioner’s Motion to Dismiss or Suspend Proceedings (5 February 2004)
- Petitioner filed a motion styled as for dismissal and/or suspension of all proceedings, arguing:
- Private respondent had only paid P8,517.50 in docket fees.
- Private respondent’s real cause of action, measured by the total claim disclosed in the writ of attachment motion, was effectively an action for a sum of money, translating into unpaid docket fees amounting to P5,452,237.50.
- Thus, the suit should be dismissed for lack of jurisdiction or suspended until payment of correct docket fees.
- Private respondent opposed the motion on 16 February 2004.
Trial Court Ruling on Docket Fees and Jurisdiction (26 March 2004)
- RTC Branch 99 issued an Order denying petitioner’s motion to dismiss and/or suspend pending pa