Case Summary (G.R. No. 148106)
Key Dates and Procedural Posture
Respondent filed a complaint for damages in the RTC on October 15, 1998, seeking substantial actual damages (P71,866,205.67), moral and exemplary damages (P10,000,000.00 each), counsel fees (30% of amounts claimed), and costs. On October 28, 1998 the RTC allowed respondent to litigate as an indigent and exempted him from docket fees, placing the exempted amount (P615,672.83) as a lien on any favorable judgment. Petitioners moved to dismiss (December 1998); the trial court denied these motions (January 20, 1999). Petitioners filed certiorari with the Court of Appeals (May 24, 1999), which issued a writ of preliminary injunction (October 15, 1999) staying RTC proceedings. Respondent thereafter filed an urgent notice to take his deposition (December 7, 1999) and his deposition was taken on December 14, 1999. Petitioners filed a contempt petition in the CA (docketed separately), and the CA consolidated the matters and, on September 13, 2001, dismissed petitioners’ petitions and lifted the writ. Petitioners appealed to the Supreme Court in consolidated petitions for review on certiorari under Rule 45.
Applicable Law and Constitutional Basis
Because the Supreme Court decision was rendered after 1990, the 1987 Constitution is the constitutional framework applicable to the case. Controlling procedural and remedial provisions applied by the courts include the 1997 Rules of Civil Procedure: Section 21, Rule 3 (indigent litigants); Section 5, Rule 7 (certification against forum shopping); Rule 71, Section 3 (indirect contempt); and Section 19, Rule 141 of the Revised Rules of Court (standards and requirements for indigent litigants). The Court also relied on established jurisprudence interpreting docket fees, indigency, forum shopping, and contempt.
Issues Presented
Petitioners advanced three principal grounds for relief: (1) the RTC lacked jurisdiction because respondent failed to pay requisite docket fees and his ex parte motion to litigate as an indigent was defective or unsupported; (2) respondent engaged in forum shopping by failing to disclose the filing of criminal complaints against petitioners; and (3) respondent was guilty of contempt of the CA by submitting and having his deposition taken during the pendency of the CA’s preliminary injunction.
Indigency and Docket Fees: Legal Standard and Application
The general rule is that courts acquire jurisdiction only after the prescribed docket fees are paid. The Rules, however, provide an express exception for indigent parties. Section 21, Rule 3 authorizes a court, upon ex parte application and hearing, to permit a party to litigate as an indigent and to exempt that party from payment of docket and other lawful fees, with the exempted fees to constitute a lien on any favorable judgment unless the court provides otherwise. The guidelines in Section 19, Rule 141 define an “indigent litigant” by reference to gross income and ownership of real property and prescribe that the litigant execute an affidavit, supported by an affidavit of a disinterested person and attaching the current tax declaration where available. Petitioners argued that respondent’s ex parte motion was defective because it lacked affidavits from his children or other family members; the Court rejected that contention because Section 19 expressly requires the affidavit of the litigant and a supporting affidavit of a disinterested person but does not require that each immediate family member execute separate affidavits. The Supreme Court further emphasized that it will not reweigh factual evidence established at the trial court hearing on indigency, and found that the record showed substantial compliance with the statutory and rule-based requirements enabling the RTC to allow respondent to litigate as indigent and to accept the complaint without payment of docket fees.
Forum Shopping: Definition, Certification Requirement, and Ruling
Forum shopping was defined by precedent as the repetitive availing of several judicial remedies in different courts on the same transactions and facts so as to increase the litigant’s chance of obtaining a favorable result. Section 5, Rule 7 requires an initiatory pleading to include a sworn certification that no other action involving the same issues has been previously commenced, or, if another action exists, a statement of its present status, and an obligation to report subsequently discovered similar actions within five days. Respondent’s Certificate of Non-Forum Shopping, attached to his complaint, expressly disclosed that he had (or intended to file) criminal complaints (estafa, falsification, and Insurance Code violations) to be filed with the Makati Prosecutor’s Office and stated that, to his knowledge, no other civil action was pending in the Supreme Court or Court of Appeals. The trial-court record shows that respondent later manifested to the RTC that he had filed criminal complaints with the Makati Prosecutor’s Office. The Supreme Court agreed with the Court of Appeals that respondent’s sworn certification constituted substantial compliance with Section 5, Rule 7, and declined to treat his disclosures as forum shopping.
Contempt Allegation Regarding Deposition: Nature of Offense and Court’s Analysis
Petitioners asserted that respondent’s filing and submission of his December 14, 1999 deposition violated the CA’s injunction and amounted to contempt. The Court analyzed contempt under Rule 71, distinguishing direct from indirect contempt. Indirect contempt encompasses misbehavior outside a court session, disobedience or resistance to a lawful writ, order or injunction, any abuse or unlawful interference with court processes not amounting to direct contempt, and other conduct tending to impede or de
...continue readingCase Syllabus (G.R. No. 148106)
Caption, Court, and Decision
- Supreme Court of the Philippines, First Division.
- G.R. Nos. 150107 and 150108.
- Decision promulgated January 28, 2008.
- Case arose from consolidated petitions for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, seeking reversal of the Court of Appeals Decision dated September 13, 2001 in consolidated CA-G.R. SP No. 52914 and CA-G.R. SP No. 56579.
- Decision authored by Justice Sandoval-Gutierrez; concurred in by Chief Justice Puno (Chairperson), and Justices Corona, Azcuna, and Leonardo-De Castro.
- Costs imposed against petitioners.
Parties
- Petitioners: Tokio Marine Malayan Insurance Company Incorporated (Tokio Marine) — a domestic insurance corporation; individual petitioners comprising Tokio Marine’s corporate officers (Alma Peaalosa, Kimio Hosaka, Sumitomi Nishida, Teresita H. Quiambao) and Antonio B. Lapid (a consultant of Tokio Marine).
- Respondent: Jorge Valdez — former unit manager of Tokio Marine under a Unit Management Contract dated August 16, 1977.
Underlying Contractual Relationship and Allegations
- Respondent Jorge Valdez served as unit manager pursuant to a Unit Management Contract with Tokio Marine dated August 16, 1977.
- On October 15, 1998, respondent filed Civil Case No. 98-91356 in the Regional Trial Court, Branch 35, Manila, alleging breach of the Unit Management Contract by petitioners for refusing to pay commissions and bonuses among other claims.
Reliefs Sought by Respondent in Trial Court Complaint
- Actual damages totalling P71,866,205.67 plus corresponding interests.
- Moral damages of P10,000,000.00.
- Exemplary damages of P10,000,000.00.
- Attorney’s fees corresponding to 30% of the stated amounts.
- Costs of suit.
Trial Court Indigency Application and Order
- Respondent filed an "Urgent Ex Parte Motion For Authority To Litigate As Indigent Plaintiff."
- On October 28, 1998, the trial court granted the motion, allowing respondent to litigate as a pauper/indigent and exempting him from payment of filing fees computed as P615,672.83.
- The trial court expressly directed that the exempted amount shall constitute a lien upon any judgment rendered in favor of the plaintiff (respondent), unless otherwise provided.
- Trial court found respondent did not own real property in the City of Manila or elsewhere, and found sufficient showing of indigency.
Early Procedural Steps in the Trial Court
- December 11, 1998: Petitioners filed separate motions to dismiss respondent’s complaint.
- December 16, 1998: Respondent manifested to the trial court that he had filed various criminal complaints against petitioners with the Office of the City Prosecutor of Makati City.
- January 20, 1999: Trial court issued an Order denying petitioners’ motions to dismiss; motions for reconsideration by petitioners were likewise denied.
- March 12, 1999: Petitioners filed an "Answer Ad Cautelam" in Civil Case No. 98-91356.
Petitions to the Court of Appeals and Provisional Relief
- May 24, 1999: Petitioners filed a petition for certiorari with prayer for temporary restraining order and preliminary injunction with the Court of Appeals, assailing the trial court’s January 20, 1999 Order denying motions to dismiss; docketed as CA-G.R. SP No. 52914.
- October 15, 1999: Court of Appeals issued a Resolution directing issuance of a writ of preliminary injunction restraining the trial court from conducting further proceedings in Civil Case No. 98-91356 during the pendency of CA-G.R. SP No. 52914.
Deposition and Contempt Proceedings Before the Court of Appeals
- December 7, 1999: Respondent filed with the Court of Appeals an "Urgent Notice of Taking of Deposition Upon Oral Examination of Private Respondent Jorge Valdez For Purposes of the Above-Captioned Pending Case And For Such Other Legal Purposes As May Be Warranted By Existing Law and Jurisprudence."
- The record notes respondent was approximately 75 years old and described as sickly at that time.
- December 13, 1999: Petitioners filed with the Court of Appeals a petition to cite respondent in contempt, docketed as CA-G.R. SP No. 56579, alleging respondent’s filing of the urgent notice and the taking of his deposition violated the preliminary injunction issued by the appellate court.
- December 14, 1999: Respondent’s deposition was taken by Atty. Alberto A. Aguja, Notary Public for Manila; respondent’s deposition was filed with the Court of Appeals on the same date.
- CA-G.R. SP No. 56579 was subsequently consolidated with CA-G.R. SP No. 52914.
Court of Appeals Decision (September 13, 2001)
- The Court of Appeals rendered a Decision dismissing the consolidated petitions filed by the petitioners and lifting and dissolving the writ of preliminary injunction previously issued on October 18, 1999 (reference to earlier writ date).
- The Court of Appeals found lack of merit in petitioners' claims and dismissed the petitions; it also dismissed the contempt charge for indirect contempt related to the deposition, finding the deposition was taken in good faith.
- The appellate court concluded the taking of the deposition was not part of the court proceedings in Civil Case No. 98-91356 and therefore not covered by the writ of injunction.
Issues Raised by Petitioners in the Supreme Court
- Petitioners contend the Court of Appeals erred in:
- Denying their motion to dismiss respondent’s complaint in Civil Case No. 98-91356 for nonpayment of docket fees.
- Failing to find that respondent engaged in forum shopping.
- Not declaring respondent guilty of contempt of court for having his deposition taken in alleged violation of the preliminary injunction.
Governing Rules, Doctrines, and Authorities Relied Upon by the Court
- General principle: courts acquire jurisdiction over a case only upon payment of prescribed docket fees; correct docket fees must be paid before courts can act on a petition or complaint (citing Manchester Development Corp. v. Court of Appeals; Sun Insurance Office Ltd. v. Asuncion; Tacay v. RTC of Tagum).
- Exception for indigent litigant: Section 21, Rule 3 of the 1997 Rules of Civil Procedure, as amended — authorizes indigent party to litigate as indigent upon ex parte application and hearing; includes exemption from docket and other lawful fees; exempted amount constitutes lien on any judgment in favor of the indigent unless otherwise provided; any adverse party may contest grant prior to judgment.
- Guidelines for indigency: Section 19, Rule 141 (as amended by A.M. No. 04-2-04 SC effective August 16, 2004) —