Case Summary (G.R. No. 150135)
Petitioners and Respondents
Petitioners sought damages for illegal demolition and lost income amounting to ₱7,000 per month. Respondents counterclaimed that the boarding house constituted a nuisance and challenged petitioners’ indigent status to require payment of filing fees.
Key Dates
– August 30, 1999: Verified complaint drafted.
– September 1, 1999: Filing of complaint and Ex-Parte Motion to Litigate as Indigent Litigants (accompanied by pay slip and assessor’s certification).
– March–July 2000: RTC orders disqualifying petitioners as indigents for failing to meet income/property thresholds under Rule 141, Section 16/18.
– September 11, 2001: RTC dismisses case for nonpayment of filing fees.
– October 30, 2006: Supreme Court issues decision.
Applicable Law
• 1987 Constitution, Article III, Section 11 (free access to courts regardless of poverty)
• 1997 Rules of Civil Procedure, Rule 3, Section 21 (indigent party test: no funds for basic necessities)
• Rules of Court, Rule 141:
– Section 16 (effective July 19, 1984–February 28, 2000): pauper litigants with gross income ≤ ₱1,500/month (outside Metro Manila) or assessed property ≤ ₱18,000
– Section 18 (effective March 1, 2000): gross income ≤ ₱3,000/month (outside Metro Manila) or assessed property ≤ ₱50,000
Facts
- Petitioners filed suit and obtained an initial order granting indigent status under Rule 141, Section 16.
- Respondents challenged the grant, alleging petitioners earned over the threshold (Antonio’s gross pay: ₱10,474; Lorencita’s rental and store income).
- The RTC applied Rule 141, Section 18, found petitioners exceeded income limits, and disqualified them without holding a hearing under Rule 3, Section 21.
- Petitioners’ motions for reconsideration were denied, and the case was eventually dismissed.
Issue
Whether petitioners qualified for exemption from filing fees as indigent litigants.
Supreme Court Ruling
- The RTC erred by applying only Rule 141’s income/property standards and failing to invoke Rule 3, Section 21’s “basic necessities” test and hearing procedure.
- Rule 3, Section 21 and Rule 141’s pauper provisions coexist and must be harmonized:
- If an applicant meets Rule 141’s objective thresholds, indigent status is granted as a matter of right.
- If the applicant fails one or both thresholds, the court must hold a hearing under Rule 3, Section 21 to determine whether the party truly lacks funds for food, shelter, and basic necessities, with the adverse party allowed to present contrary evidence.
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Case Syllabus (G.R. No. 150135)
Procedural History
- On September 1, 1999, the Alguras filed a Verified Complaint for damages and an Ex-Parte Motion to Litigate as Indigent Litigants before RTC, Naga City, Branch 27.
- The trial court granted fee exemption in its September 1, 1999 Order after finding the motion meritorious.
- Respondents answered on October 13, 1999, then moved to disqualify petitioners as indigents on March 10, 2000, alleging undisclosed income sources.
- RTC issued an April 14, 2000 Order disqualifying the Alguras under Rule 141, sec. 18 (Legal Fees), and denied their reconsideration on July 17, 2000.
- For non-payment of filing fees, the case was dismissed on September 11, 2001.
- The Supreme Court granted the Petition for Review on Certiorari under Rule 45, Section 2(c) of Rule 41.
Statement of Facts
- The Alguras claimed respondents illegally demolished part of their house and boarding facility, causing loss of monthly rental income of PhP 7,000.
- Antonio Algura’s July 1999 pay slip (Annex “A”) showed gross monthly income of PhP 10,474.00 and net pay of PhP 3,616.99.
- A July 14, 19