G.R. No.

146262 January 21, 2005

HEIRS OF EUGENIO LOPEZ, SR., petitioners,

vs.
HON. ALFREDO R. ENRIQUEZ, in his capacity as Administrator of the Land Registration Authority and the REGISTER OF
DEEDS OF MARIKINA CITY, respondents.

DECISION

CARPIO, J.:

The Case

This is a petition for review1 to reverse the Decision2 dated 29 November 2000 of the Court of Appeals ("appellate court") in CA-
G.R. SP No. 55993. The appellate court affirmed the Resolution3 dated 21 May 1999 issued by the Land Registration Authority
("LRA") in Consulta No. 2879. The LRA ruled that a notice of lis pendens based on a motion is not registrable.

The Facts

Alfonso Sandoval ("Sandoval") and Roman Ozaeta, Jr. ("Ozaeta") filed an application for registration of title before the Regional
Trial Court of Pasig City, Branch 152 ("land registration court").he land registration court issued an order of general default and
hearings on the application followed. On 31 May 1966, the land registration court granted the application. The decision became
final and executory, and the land registration court issued a certificate of finality dated 8 March 1991.

On 16 July 1997, petitioners Eugenio Lopez, Jr., Manolo Lopez, Oscar Lopez, and Presentacion L. Psinakis ("petitioners"), heirs of
Eugenio Lopez, Sr., filed a motion6 in LRC No. N-18887. The motion alleged that Sandoval and Ozaeta sold the lots subject of the
application to the late Eugenio Lopez, Sr. on 23 September 1970. Petitioners prayed that the court consider in the land registration
case the Deed of Absolute Sale7 over the lots executed by Sandoval and Ozaeta and their respective spouses in favor of Eugenio
Lopez, Sr. Invoking Section 22 of Presidential Decree No. 1529 ("PD 1529"),8 petitioners also prayed that the court issue the
decree of registration in their names as the successors-in-interest of Eugenio Lopez, Sr.

The Register of Deeds of Marikina City issued the corresponding OCT Nos. O-1603 and O-1604 in favor of Sandoval and Ozaeta
and their spouses only on 18 August 1998.

On 25 November 1998, petitioners filed with the Register of Deeds of Marikina City an application to annotate the notice of lis
pendens at the back of OCT Nos. O-1603 and O-1604 on the ground that petitioners have filed with the land registration court a
motion to declare OCT Nos. O-1603 and O-1604 void.14 Petitioners attached to the application a copy of the 25 November 1998
motion and the pertinent OCTs.

In a letter15 dated 15 December 1998, the Register of Deeds of Marikina City denied the application to annotate the notice of lis
pendens.

The Ruling of the Land Registration Authority

WHEREFORE, premises considered, this Authority is of the opinion and so holds that the notice of lis pendens is not registrable.

The Ruling of the Court of Appeals

The appellate court dismissed the petition for lack of merit. The appellate court reiterated the LRA’s ruling that only a party to a
case has the legal personality to file a notice of lis pendens. Petitioners have no legal personality because they failed to file a
motion to lift the order of general default in the land registration case.

Issues
Petitioners present the following issues for resolution of this Court:
 1. WHETHER PETITIONERS’ MOTION TO DECLARE VOID THE DECREES ISSUED BY THE LAND REGISTRATION
AUTHORITY IS A PROPER BASIS FOR FILING THE NOTICE OF LIS PENDENS, and

2. WHETHER PETITIONERS CAN FILE THE MOTION TO DECLARE VOID THE DECREES ISSUED BY THE LAND
REGISTRATION COURT IN LRC CASE NO. N-18887 DESPITE THE FACT THAT THE COURT HAS NOT LIFTED THE
GENERAL ORDER OF DEFAULT.

The Ruling of the Court

(Issue 1. WHETHER PETITIONERS’ MOTION TO DECLARE VOID THE DECREES ISSUED BY THE LAND REGISTRATION
AUTHORITY IS A PROPER BASIS FOR FILING THE NOTICE OF LIS PENDENS)

The petition has no merit.

We agree with the observation of the appellate court that the pleadings filed by petitioners, public respondents and the
Office of the Solicitor General cite "more or less the same provisions of the laws as applicable in support of their
respective contentions but differ x x x only with respect to their interpretation thereof."

Notice of Lis Pendens

Lis pendens literally means a pending suit. The doctrine of lis pendens refers to the jurisdiction, power or control which a
court acquires over property involved in a suit, pending the continuance of the action, and until final judgment

The purposes of lis pendens are (1) to protect the rights of the party causing the registration of the lis pendens, and (2) to advise
third persons who purchase or contract on the subject property that they do so at their peril and subject to the result of the pending
litigation.21

The filing of a notice of lis pendens has a two-fold effect. First, it keeps the subject matter of the litigation within the power of the
court until the entry of the final judgment to prevent the defeat of the final judgment by successive alienations. Second, it binds a
purchaser, bona fide or not, of the land subject of the litigation to the judgment or decree that the court will promulgate
subsequently. However, the filing of a notice of lis pendens does not create a right or lien that previously did not exist.22

Without a notice of lis pendens, a third party who acquires the property after relying only on the certificate of title is a purchaser in
good faith.

The notice of lis pendens x x x is ordinarily recorded without the intervention of the court where the action is pending. The notice is
but an incident in an action, an extrajudicial one, to be sure. It does not affect the merits thereof. It is intended merely to
constructively advise, or warn, all people who deal with the property that they so deal with it at their own risk, and whatever rights
they may acquire in the property in any voluntary transaction are subject to the results of the action, and may well be inferior and
subordinate to those which may be finally determined and laid down therein. The cancellation of such a precautionary notice is
therefore also a mere incident in the action, and may be ordered by the Court having jurisdiction of it at any given time. And its
continuance or removal x x x is not contingent on the existence of a final judgment in the action, and ordinarily has no effect on the
merits thereof.24

A notice of lis pendens may involve actions that deal not only with title or possession of a property, but also with the use
or occupation of a property.25 The litigation must directly involve a specific property which is necessarily affected by the
judgment.

Magdalena Homeowners Association, Inc. v. Court of Appeals26 enumerated the cases where a notice of lis pendens is
appropriate:

[A] notice of lis pendens is proper in the following cases, viz:

a) An action to recover possession of real estate;

b) An action to quiet title thereto;
c) An action to remove clouds thereon;
d) An action for partition; and
 e) Any other proceedings of any kind in Court directly affecting the title to the land or the use or occupation thereof or the
buildings thereon.

On the other hand, the doctrine of lis pendens has no application in the following cases:
a) Preliminary attachments;
b) Proceedings for the probate of wills;
c) Levies on execution;
d) Proceedings for administration of estate of deceased persons; and
e) Proceedings in which the only object is the recovery of a money judgment.

Petitioners’ enumeration readily reveals that they have not complied with the requisites. Both the LRA and the appellate court
denied the application for a notice of lis pendens because petitioners are mere movants, and not original parties, in LRC No. N-
18887. As petitioners are not parties to an action as contemplated in Section 76 of PD 1529, they failed to present the
requisite pleading to the Register of Deeds of Marikina City. We hold that the Register of Deeds correctly denied the
application for a notice of lis pendens.

(ISSUE 2. WHETHER PETITIONERS CAN FILE THE MOTION TO DECLARE VOID THE DECREES ISSUED BY THE LAND
REGISTRATION COURT IN LRC CASE NO. N-18887 DESPITE THE FACT THAT THE COURT HAS NOT LIFTED THE
GENERAL ORDER OF DEFAULT.)

Reconveyance

Reconveyance is based on Section 55 of Act No. 496, as amended by Act No. 3322, which states that "xxx in all cases of
registration procured by fraud the owner may pursue all his legal and equitable remedies against the parties to such fraud, without
prejudice, however, to the rights of any innocent holder for value of a certificate of title xxx."

An action for reconveyance is an action in personam available to a person whose property has been wrongfully registered
under the Torrens system in another’s name. Although the decree is recognized as incontrovertible and no longer open to
review, the registered owner is not necessarily held free from liens. As a remedy, an action for reconveyance is filed as an
ordinary action in the ordinary courts of justice and not with the land registration court.30Reconveyance is always available
as long as the property has not passed to an innocent third person for value. A notice of lis pendens may thus be annotated on
the certificate of title immediately upon the institution of the action in court. The notice of lis pendens will avoid transfer to an
innocent third person for value and preserve the claim of the real owner.31

Necessity of a Motion to Lift the Order of General Default

In its comment,32 the LRA states that under Section 26 of PD 1529 the order of default includes petitioners. Therefore, petitioners’
failure to move to lift the default order did not give them standing in the case. As long as the court does not lift the order of
general default, petitioners have no legal standing to file the motion to declare void the decrees of registration issued to
the applicant. Section 26 of PD 1529 provides thus:

Sec. 26. Order of default; effect. – If no person appears and answers within the time allowed, the court shall, upon motion of the
applicant, no reason to the contrary appearing, order a default to be recorded and require the applicant to present evidence. By the
description in the notice "To All Whom It May Concern", all the world are made parties defendant and shall be concluded by the
default order.

Where an appearance has been entered and an answer filed, a default order shall be entered against persons who did not appear
and answer.

Considering the facts and arguments as presented above, we hold that the motion filed by petitioners is insufficient to give them
standing in the land registration proceedings for purposes of filing an application of a notice of lis pendens. However, we disagree
with the LRA and the appellate court’s observation that petitioners need to file a motion to lift the order of general default. A motion
to lift the order of general default should be filed before entry of final judgment. The land registration court granted the
application for registration of title on 31 May 1966 and issued a certificate of finality on 8 March 1991. Petitioners filed their motion
on 16 July 1997. Thus, even if petitioners filed a motion to lift the order of general default, the order of default could not be
set aside because the motion was filed out of time.
In Lim Toco v. Go Fay,37 this Court explained the effect of an order of default to the party defaulted. A party declared in
default loses his standing in court. As a result of his loss of standing, a party in default cannot appear in court, adduce
evidence, be heard, or be entitled to notice. A party in default cannot even appeal from the judgment rendered by the
court, unless he files a motion to set aside the order of default under the grounds provided in what is now Section 3, Rule
9 of the 1997 Rules of Civil Procedure.

Under Section 26, PD 1429, petitioners are deemed to have been included by the default order. Those who did not file an answer
should be considered as having lost their standing in court from that stage (Republic v. Dela Rosa, 173 SCRA 12) except when
they file a motion to set aside the order [of] default on the grounds mentioned in Section 3, Rule 18 of the Rules of Court (Toco v.
Fay, 80 Phil. 166).

In land registration cases (as in the said LRC No. N-18887), an order of general default was deemed to have been issued based
on the presumption of regularity in judicial proceedings (Pascual, et al. v. Ortega, et al., 58 O.G. 12 March 1962 C.A.).

Petitioners failed to adduce any evidence showing that the order of general default was lifted. Records disclosed that
without first filing a motion to lift the order of general default, petitioners filed a motion to declare as null and void the
decrees and titles. Until the order of general default is lifted by the court, petitioner could not be considered as a party to
the action. They are deemed movants whose personality as far as the case is concerned is not yet admitted by the court
considering that the order of default has not been lifted.

Petitioners are not mere interested parties in this case. By filing their motion to have the decrees and the corresponding
certificates of title declared void, they took the role of oppositors to the application for land registration.

The appellate court stated that "in as much as it would want to oblige to the plea of petitioners to hasten or expedite the
proceedings and to avoid further expenses on the part of the petitioners, however[,] (it) could not." 40 Indeed, it requires a
delicate balancing act between the objective of the Rules of Court to secure a just, speedy and inexpensive disposition of
every action and proceeding41 and the strict requirements for a notice of lis pendens. The facts in this case show that
petitioners have not complied with the requirements.

WHEREFORE, we DENY the petition. We AFFIRM the Decision of the Court of Appeals in CA-G.R. SP No. 55993 dated 29
November 2000.

G.R. No. 126275 November 11, 2004

JOHANNE J. PEÑA & ERLANA G. VDA. DE INOCENCIO, doing business under the name and style of LARGESTONE
ENTERPRISES, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and DURA-TIRE & RUBBER INDUSTRIES, INC., respondents.

Before us is a petition for review on certiorari of the Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 42383 affirming the
Decision2 of the Regional Trial Court (RTC) of Manila, Branch 10, in Civil Case No. 92-61507 and its Resolution dated August 19,
1996 denying the motion for reconsideration of the said decision.

The Antecedents

Respondent Dura-Tire & Rubber Industries, Incorporated (Dura-Tire for brevity) is a corporation engaged in the business of
manufacturing and sale of vehicle tires and other rubber products. Among the customers of the respondent were petitioners
Johanne J. Peña and Erlana G. Vda. de Inocencio who, by themselves, were also engaged in the business of buying rubber
products from the respondent and of selling the same to their customers under the business name Largestone Enterprises
(Largestone). Largestone was also the authorized sales agent of respondent Dura-Tire. The petitioners would purchase rubber
products from the respondent on credit for delivery to their customers, after which the petitioners would pay the respondent for the
said purchases.

On May 8, 1991, the respondent and petitioner Inocencio entered a surety agreement in which the latter bound and obliged herself,
jointly and solidarily, with petitioner Peña to pay to the respondent, when due, all money indebtedness or obligation of any kind
incurred by petitioner Peña in the past and/or thereafter, arising from or growing out of any sale, whether on credit and/or
forwarding on consignment, for sale or return goods and deliveries, as well as customers’ accounts guaranteed by petitioner Peña,
and to pay on demand any said indebtedness upon his default. 3 Petitioner Peña signed the agreement as a witness.

In partial payment of the said purchases from the respondent, petitioner Inocencio issued the following Philbanking Checks and
also drew and issued to the respondent Philippine National Bank. However, these checks were returned by the drawee banks for
either of the following reasons: "closed account," "payment stopped," or "drawn against insufficient funds." The petitioners,
likewise, failed to pay for the balance of their account.

On June 10, 1992, the respondent filed a Complaint with the RTC of Manila against the petitioners for the collection of their
account, plus interests and attorney’s fees.

The petitioners did not file any motion for reconsideration of the decision, nor a motion for new trial, and appealed the decision
instead

On March 19, 1996, the CA promulgated a decision affirming the decision of the RTC. The petitioners filed a motion for
reconsideration of the decision, but the CA denied the same.

ISSUE: (3) THAT THE COURT OF APPEALS HAD ERRED IN DECLARING THAT FOR FAILURE OF THE DEFENDANTS TO
AVAIL THE REMEDY OF NEW TRIAL UNDER SEC. 1(a) OF RULE 37 OR IN THE ALTERNATIVE, A PETITION FOR RELIEF
FROM SAID ORDER AND JUDGMENT, IT IS ABSURB (SIC) FOR THE DEFENDANT (SIC) TO QUESTION THE DEFAULT
ORDER IN THE PRESENT APPEAL

The Ruling of the Court

We agree with the petitioners that the trial court erred in declaring them as in default for their failure to file a pre-trial brief
at least three days before the scheduled pre-trial set on February 19, 1993 and to appear before the trial court on said date
and time.

Under Section 1, Rule 2080 of the Rules of Court,81 the parties and their counsel are mandated to appear before the court for pre-
trial and if the defendants fail to do so despite due notice and without any justifiable reason therefor, they may be declared as in
default, conformably to Section 2, Rule 20 of the said Rules.82 The parties are also mandated under Circular No. 1-89 dated
January 19, 198983 to file their respective pre-trial briefs at least three days before the pre-trial conference and if the defendants fail
to do so, they may be declared as in default. The parties and their counsel must be served with copies of the order of the court
setting the case for pre-trial, either by personal delivery or by mail under Sections 3, 4, and 5, Rule 13 84 of the Rules of Court, or by
substituted service under Section 6, Rule 1385 of the Rules of Court.

The rule is that service by registered mail is complete upon actual receipt thereof by the addressee, except when the addressee
does not claim his mail within five days from the date of the first notice of the postmaster, in which case, the service shall take
effect within the said period. The certification from the postmaster would be the best evidence to prove that the notice had been
validly made. However, if there is nothing on record showing how, when, and to whom, the delivery of the registry notices of the
registered mail was made, the court should not rely on the notation "return to sender: unclaimed" to support the presumption of
constructive service.

As admitted by the petitioners, a copy of the January 4, 1993 Order of the trial court was sent to and received by their counsel on
January 14, 1993. A copy of the same order was placed on a sealed brown envelope, addressed to the petitioners. The records
also contain a registry notice addressed to the petitioners at "Pandacan, Manila." There is no showing that the notice was sent to or
received by the petitioners. In fact, the respondent even failed to submit to the trial court a certificate from the postmaster stating
that the clerk of court sent a notice of registered mail to the petitioners’ counsel and that the latter received the same. And yet, the
trial court declared the petitioners as in default for their counsel’s failure to appear for pre-trial and to file their brief three days
before February 19, 1993.
We are, thus, convinced that the trial court erred in declaring the petitioners as in default, in allowing the respondent to adduce its
evidence ex parte, and in rendering judgment by default against the petitioners.

However, it must be stressed that the petitioners failed to file a motion for new trial under Section 1(a), Rule 37 of the
Rules of Court despite receipt of notice of the trial court’s decision. The petitioners had the right to appeal the judgment
by default on the ground that the said judgment was contrary to law or the evidence. They were, however, proscribed
from assailing the trial court’s Order dated February 19, 1993 declaring them as in default.

The burden of proof is on the petitioners to establish their defenses by a preponderance of evidence while the burden of proof is on
the respondent, as plaintiff, to prove by a preponderance of evidence the material allegations of its complaint.88 If the defendants
admit the material allegations of the complaint, the plaintiff is then relieved of its burden.

We do not agree with the contention of the respondent that the petitioners drew and issued the checks to it in payment of
obligations separate from those covered by the sales invoices appended to its complaint. The respondent failed to
adduce any sales invoice issued by it showing sales and deliveries of the products to the petitioners or to their
customers for which the latter drew and delivered the checks. We are convinced that the said checks were drawn and
issued by the petitioners to the respondent in partial payment of the products covered by the said sales invoices.95

In fine, the petitioners are jointly and severally liable to the respondent in the principal amount of P329,944.50.

WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 42383, and
its Resolution dated August 19, 1996, are hereby AFFIRMED with the modification that the petitioners are ordered to pay,
jointly and severally, to the private respondent the principal amount of P329,944.50.

SO ORDERED.

(G.R. No. 167631 December 16, 2005 ) Jenette Marie B. Crisologo, Petitioner,
vs.
GLOBE TELECOM INC. and Cesar M. Maureal, Vice President for Human Resources, Respondents.

Petitioner was an employee of respondent company. When she was promoted as Director of Corporate Affairs and Regulatory
Matters, she became entitled to an executive car, and she procured a 1997 Toyota Camry. In April 2002, she was separated from
the company. Petitioner filed a complaint for illegal dismissal and reinstatement with the National Labor Relations Commission
(NLRC), which later dismissed the complaint. Petitioner filed, on August 12, 2004, a petition for certiorari with the Court of Appeals,
docketed as CA-G.R. SP No. 85679 assailing the NLRC’s dismissal.

Pending said petition, respondent company filed with the Regional Trial Court of Mandaluyong (Branch 213) an action for recovery
of possession of a motor vehicle with application for a writ of replevin with damages, docketed as Civil Case No. MC04-2480.
Petitioner filed a motion to dismiss on the ground of litis pendentia and forum shopping but this was denied by the trial court. Thus,
petitioner filed a petition for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 85927.1 Petitioner also filed with the
Court of Appeals a motion for the issuance of a writ of prohibition to enjoin proceedings in the replevin case before the trial court.

Thereafter, respondent company filed a motion to declare defendant in default in Civil Case No. MC04-2480, which was granted by
the trial court. Respondent company was thus allowed to present its evidence ex-parte. Petitioner filed a motion for reconsideration
of the order of default but it was denied by the trial court.

ISSUE:
WON the Petitioner’s filing of review on certiorari withthe SC citing Matute case is the proper recourse for
a judgment by default rendered by the trial court

RULING

No. The filing of the present petition is clearly not the proper remedy to assail the default judgment rendered by the trial
court. The Matute case is of 1969, vintage and pertained to the old Rules of Court and has already been superseded by the
1997 Rules of Civil Procedure.Her only recourse then is to file an ordinary appeal with the Court of Appeals under Sec. 2 (a),
Rule 41 of the1997 Rules of Civil Procedure, as amended
A party who has been declared in default may likewise appeal from the judgment rendered against him
as contrary to the evidence or to the law, even if no petition for relief to set aside the order of default has
been presented by him in accordance with Rule 38. (Emphasis supplied)

The decision sought to be reviewed in this case is a judgment by default rendered by the trial court in Civil Case
No. MC04-2480. As such, the applicable rule is Section 2, Rule 41 of the 1997 Rules of Civil Procedure, as
amended, which provides for the different modes of appeal from a Regional Trial Court’s judgment or final order,
to wit:

Section 2. Modes of appeal. —

(a) Ordinary appeal. — The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of
its original jurisdiction shall be taken by filing a notice of appeal with the court which rendered the judgment or final order
appealed from and serving a copy thereof upon the adverse party. No record on appeal shall be required except in special
proceedings and other cases of multiple or separate appeals where the law or these Rules so require. In such cases, the
record on appeal shall be filed and served in like manner.

(b) Petition for review. — The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the
exercise of its appellate jurisdiction shall be by petition for review in accordance with Rule 42.

(c) Appeal by certiorari. — In all cases where only questions of law are raised or involved, the appeal shall be to
the Supreme Court by petition for review on certiorari in accordance with Rule 45. (Emphasis supplied)

In Cerezo vs. Tuazon,4 the Court reiterated the remedies available to a party declared in default:

a) The defendant in default may, at any time after discovery thereof and before judgment, file a motion under
oath to set aside the order of default on the ground that his failure to answer was due to fraud, accident,
mistake or excusable negligence, and that he has a meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b), Rule
9]);

b) If the judgment has already been rendered when the defendant discovered the default, but before the same
has become final and executory, he may file a motion for new trial under Section 1 (a) of Rule 37;

c) If the defendant discovered the default after the judgment has become final and executory, he may file
a petition for relief under Section 2 [now Section 1] of Rule 38; and

d) He may also appeal from the judgment rendered against him as contrary to the evidence or to the law, even if
no petition to set aside the order of default has been presented by him (Sec. 2, Rule 41).

Moreover, a petition for certiorari to declare the nullity of a judgment by default is also available if the trial court
improperly declared a party in default, or even if the trial court properly declared a party in default, if grave abuse
of discretion attended such declaration.5

It is on this score that the Court is inclined to concur with petitioner’s argument that even if the remedy resorted to was wrong,
the Court may refer the case to the Court of Appeals under Rule 56, Section 6, paragraph 2 of the 1997 Rules of Civil
Procedure, as amended, which provides: "(A)n appeal by certiorari taken to the Supreme Court from the Regional Trial Court
submitting issues of fact may be referred to the Court of Appeals for decision or appropriate action." This despite the express
provision in Section 5(f) of the same Rule, which provides that an appeal may be dismissed when there is error in the choice or
mode of appeal.

Both Sections 5(f) and 6 of Rule 57 use the term "may," denoting discretion on the part of the Court in dismissing the
appeal or referring the case to the Court of Appeals. The question of fact involved in the appeal and substantial ends of
justice warrant a referral of this case to the Court of Appeals for further appropriate proceedings.

WHEREFORE, the motion for reconsideration is GRANTED. The petition is reinstated and the case is REFERREDto the
Court of Appeals for appropriate action.
G.R. No. 116121 July 18, 2011

THE HEIRS OF THE LATE RUBEN REINOSO, SR., represented by Ruben Reinoso Jr., Petitioners,
vs.
COURT OF APPEALS, PONCIANO TAPALES, JOSE GUBALLA, and FILWRITERS GUARANTY
ASSURANCE CORPORATION,** Respondent.

The complaint for damages arose from the collision of a passenger jeepney and a truck at around 7:00 o’clock in the evening of
June 14, 1979 along E. Rodriguez Avenue, Quezon City. As a result, a passenger of the jeepney, Ruben Reinoso, Sr. (Reinoso),
was killed. The passenger jeepney was owned by Ponciano Tapales (Tapales) and driven by Alejandro Santos (Santos), while the
truck was owned by Jose Guballa (Guballa) and driven by Mariano Geronimo (Geronimo).

On November 7, 1979, the heirs of Reinoso (petitioners) filed a complaint for damages against Tapales and Guballa. In turn,
Guballa filed a third party complaint against Filwriters Guaranty Assurance Corporation (FGAC) under Policy Number OV-09527.

On March 22, 1988, the RTC rendered a decision in favor of the petitioners and against Guballa.

On appeal, the CA, in its Decision dated May 20, 1994, set aside and reversed the RTC decision and dismissed
the complaint on the ground of non-payment of docket fees pursuant to the doctrine laid down in Manchester v.
CA.4 In addition, the CA ruled that since prescription had set in, petitioners could no longer pay the required
docket fees.5 Petitioners filed a motion for reconsideration of the CA decision but it was denied.

ISSUE: WON jurisdiction of the trial court remains even if there was failure to pay the correct filing fee
as long as the correct amount would be paid subsequently.

RULING:

The Court finds merit in the petition.

The rule is that payment in full of the docket fees within the prescribed period is
mandatory.8 In Manchester v. Court of Appeals,9 it was held that a court acquires jurisdiction over any
case only upon the payment of the prescribed docket fee. The strict application of this rule was,
however, relaxed two (2) years after in the case of Sun Insurance Office, Ltd. v. Asuncion,10 wherein the Court
decreed that where the initiatory pleading is not accompanied by the payment of the docket fee, the court may
allow payment of the fee within a reasonable period of time, but in no case beyond the applicable prescriptive or
reglementary period. This ruling was made on the premise that the plaintiff had demonstrated his willingness to
abide by the rules by paying the additional docket fees required. 11 Thus, in the more recent case of United
Overseas Bank v. Ros,12 the Court explained that where the party does not deliberately intend to defraud the
court in payment of docket fees, and manifests its willingness to abide by the rules by paying additional docket
fees when required by the court, the liberal doctrine enunciated in Sun Insurance Office, Ltd., and not the strict
regulations set in Manchester, will apply. It has been on record that the Court, in several instances, allowed the
relaxation of the rule on non-payment of docket fees in order to afford the parties the opportunity to fully ventilate
their cases on the merits. In the case of La Salette College v. Pilotin,13 the Court stated:

Notwithstanding the mandatory nature of the requirement of payment of appellate docket fees, we also
recognize that its strict application is qualified by the following: first, failure to pay those fees within the
reglementary period allows only discretionary, not automatic, dismissal; second, such power should be used by
the court in conjunction with its exercise of sound discretion in accordance with the tenets of justice and fair play,
as well as with a great deal of circumspection in consideration of all attendant circumstances.

In this case, it cannot be denied that the case was litigated before the RTC and said trial court had
already rendered a decision. While it was at that level, the matter of non-payment of docket fees
was never an issue. It was only the CA which motu propio dismissed the case for said reason.

Considering the foregoing, there is a need to suspend the strict application of the rules so that the
petitioners would be able to fully and finally prosecute their claim on the merits at the appellate
level rather than fail to secure justice on a technicality, for, indeed, the general objective of
procedure is to facilitate the application of justice to the rival claims of contending parties, bearing
always in mind that procedure is not to hinder but to promote the administration of justice.
WHEREFORE, the petition is GRANTED. The May 20, 1994 Decision and June 30, 1994 Resolution of the
Court of Appeals are REVERSED and SET ASIDE and the March 22, 1988 Decision of the Regional Trial Court,
Branch 8, Manila, is REINSTATED.

G.R. No. 148482. August 12, 2005

JOSEPH DORMAN D. TAMAYO, LAUREANA D. TAMAYO and LINAFLOR D. TAMAYO, Petitioners,

vs.
JOSE D. TAMAYO, JR., FLORITS TAMAYO-MAGNO, LUZMINDA TAMAYO-ANTHONY and FORTUNA
TAMAYO-ENRIQUEZ, Respondent.

FACTS:

Petitioners and respondents are half-blood siblings. Their mother is Dorothela Dayanghirang-Tamayo. Respondents are
Dorothela’s legitimate children with Dr. Jose Tamayo, Sr. Petitioners, on the other hand, are her illegitimate children with Jose
Matuco.

Dorothela eventually separated from Jose Matuco. Respondents thereafter took care of Dorothela and petitioners. Respondents
sent petitioners to school and even caused the issuance of their birth certificates, allowing them to use the surname Tamayo.

On November 15, 1977, spouses Tamayo executed, in favor of respondents, a Deed of Donation Inter Vivos of their two parcels of
land covered by Transfer Certificates of Title Nos. 830 and 5868 of the Registry of Deeds, Davao City. Thus, these titles were
cancelled and in lieu thereof, Transfer Certificates of Title Nos. T-61159 and T-61160 were issued in their names on April 5, 1978.

On October 7, 1990, Dr. Jose Tamayo, Sr. died. Thereafter, or on June 13, 1996, petitioners filed with the Regional Trial Court,
Branch 11, Davao City, a complaint for the revocation of the said donation, alleging they were preterited from the estate of Dr.
Tamayo; and that respondents fraudulently caused the execution of the Deed of Donation Inter Vivos. The trial court dismissed the
complaint.

Feeling aggrieved, petitioners interposed an appeal to the Court of Appeals, but failed to pay the corresponding docket fees.
Hence, their appeal was dismissed.

ISSUE: WON nonpayment of the docket fees does not automatically result in the dismissal of the appeal.

RULING:

It is a doctrinal rule that the perfection of appeals in the manner and within the period permitted by law is not only
mandatory but also jurisdictional. Thus, the payment of docket fees within the prescribed period for taking an appeal is
mandatory for the perfection of an appeal.5 Anyone seeking exemption from the application of this Rule has the burden of
proving that exceptionally meritorious instances exist which warrant such departure.6 However, the Court of Appeals did
not find any compelling reason to relax the rules. Neither we.

The bitter consequence of such grave inadvertence is to render the trial court’s Decision final and executory. We thus
rule that the Court of Appeals did not err in dismissing petitioners’ appeal.

WHEREFORE, the instant petition is hereby DENIED. Costs against petitioners.