This document discusses a case regarding a property that was mortgaged, foreclosed on, and sold at public auction due to default on a loan. It summarizes the key events and arguments from both parties' perspectives. The petitioner GSIS claimed it followed proper procedures in foreclosing and selling the property, while the respondents argued the GSIS and other parties violated laws in the process. The document also discusses relevant laws and precedents regarding compulsory counterclaims, docket fees, and the authority of the Supreme Court over legal fees.
This document discusses a case regarding a property that was mortgaged, foreclosed on, and sold at public auction due to default on a loan. It summarizes the key events and arguments from both parties' perspectives. The petitioner GSIS claimed it followed proper procedures in foreclosing and selling the property, while the respondents argued the GSIS and other parties violated laws in the process. The document also discusses relevant laws and precedents regarding compulsory counterclaims, docket fees, and the authority of the Supreme Court over legal fees.
This document discusses a case regarding a property that was mortgaged, foreclosed on, and sold at public auction due to default on a loan. It summarizes the key events and arguments from both parties' perspectives. The petitioner GSIS claimed it followed proper procedures in foreclosing and selling the property, while the respondents argued the GSIS and other parties violated laws in the process. The document also discusses relevant laws and precedents regarding compulsory counterclaims, docket fees, and the authority of the Supreme Court over legal fees.
* damages arising after the filing of the complaint or similar
pleading as to which the additional filing fee therefor shall GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), constitute a lien on the judgment.Petitioner also invoked petitioner, vs. HEIRS OF FERNANDO F. CABALLERO, our ruling in Sun Insurance Office, Ltd. v. Judge Asuncion, 170 represented by his daughter, JOCELYN G. CABALLERO, SCRA 274 (1989), where the Court held that: x x x x 3. Where respondents. the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing Actions; Counterclaims; Tests to Determine Whether a fee but, subsequently, the judgment awards a claim not Counterclaim is Compulsory or Permissive.To determine specified in the pleading, or if specified the same has been left whether a counterclaim is compulsory or not, the Court has for determination by the court, the additional filing fee devised the following tests: (a) Are the issues of fact and law therefor shall constitute a lien on the judgment. It shall be the raised by the claim and by the counterclaim largely the same? responsibility of the Clerk of Court or his duly authorized (b) Would res judicata bar a subsequent suit on defendants deputy to enforce said lien and assess and collect the claims, absent the compulsory counterclaim rule? (c) Will additional fee. In Ayala Corporation v. Madayag, 181 SCRA substantially the same evidence support or refute plaintiffs 687 (1990), the Court, in interpreting the third rule laid down claim as well as the defendants counterclaim? and (d) Is in Sun Insurance Office, Ltd. v. Judge Asuncion, 170 SCRA 274 there any logical relation between the claim and the (1989), regarding awards of claims not specified in the counterclaim? A positive answer to all four questions would pleading, held that the same refers only to damages arising indicate that the counterclaim is compulsory. after the filing of the complaint or similar pleading as to Same; Same; Docket Fees; Jurisdiction; The rule in permissive which the additional filing fee therefor shall constitute a lien counterclaims is that for the trial court to acquire jurisdiction, on the judgment. The amount of any claim for damages, the counterclaimant is bound to pay the prescribed docket therefore, arising on or before the filing of the complaint or fees.The rule in permissive counterclaims is that for the trial any pleading should be specified. While it is true that the court to acquire jurisdiction, the counterclaimant is bound to determination of certain damages as exemplary or corrective pay the prescribed docket fees. This, petitioner did not do, damages is left to the sound discretion of the court, it is the because it asserted that its claim for the collection of rental duty of the parties claiming such damages to specify the payments was a compulsory counterclaim. Since petitioner amount sought on the basis of which the court may make a failed to pay the docket fees, the RTC did not acquire proper determination, and for the proper assessment of the jurisdiction over its permissive counterclaim. The judgment appropriate docket fees. The exception contemplated as to rendered by the RTC, insofar as it ordered Fernando to pay claims not specified or to claims although specified are left for petitioner the rentals which he collected from CMTC, is determination of the court is limited only to any damages considered null and void. Any decision rendered without that may arise after the filing of the complaint or similar jurisdiction is a total nullity and may be struck down at any pleading for then it will not be possible for the claimant to time, even on appeal before this Court. Government Service specify nor speculate as to the amount thereof. Insurance System (GSIS) vs. Heirs of Fernando F. Caballero, PETITION for review on certiorari of the decision and 632 SCRA 5, G.R. No. 158090 October 4, 2010 resolution of the Court of Appeals. Same; Same; Same; Separation of Powers; The provision in The facts are stated in the opinion of the Court. the Charter of the Government Service Insurance System (GSIS), i.e., Section 39 of Republic Act No. 8291, which Before this Court is a petition for review on certiorari under exempts it from all taxes, assessments, fees, charges or Rule 45 of the Rules of Court seeking to set aside the duties of all kinds, cannot operate to exempt it from the Decision1 and the Resolution,2 dated December 17, 2002 and payment of legal feesthe Supreme Court now has the sole April 29, 2003, respectively, of the Court of Appeals (CA) in authority to promulgate rules concerning pleading, practice CA-G.R. CV. No. 49300. and procedure in all courts.In In Re: Petition for Recognition of the Exemption of the Government Service Insurance System The antecedents are as follows: from Payment of Legal Fees, 612 SCRA 193 (2010), the Court ruled that the provision in the Charter of the GSIS, i.e., Section Respondent Fernando C. Caballero (Fernando) was the 39 of Republic Act No. 8291, which exempts it from all taxes, registered owner of a residential lot designated as Lot No. assessments, fees, charges or duties of all kinds, cannot 3355, Ts-268, covered by TCT No. T-16035 of the Register of operate to exempt it from the payment of legal fees. This was Deeds of Cotabato, containing an area of 800 square meters because, unlike the 1935 and 1973 Constitutions, which and situated at Rizal Street, Mlang, Cotabato. On the said lot, empowered Congress to repeal, alter or supplement the rules respondent built a residential/commercial building consisting of the Supreme Court concerning pleading, practice and of two (2) stories. procedure, the 1987 Constitution removed this power from On March 7, 1968, Fernando and his wife, Sylvia Caballero, Congress. Hence, the Supreme Court now has the sole secured a loan from petitioner Government Service Insurance authority to promulgate rules concerning pleading, practice System (GSIS) in the amount of P20,000.00, as evidenced by a and procedure in all courts. promissory note. Fernando and his wife likewise executed a Same; Same; Same; The third rule laid down in Sun Insurance real estate mortgage on the same date, mortgaging the afore- Office, Ltd. v. Asuncion, 170 SCRA 274 (1989), regarding stated property as security. awards of claims not specified in the pleading, refers only to Fernando defaulted on the payment of his loan with the GSIS. CMTC to bid despite knowledge that said corporation has no Hence, on January 20, 1973, the mortgage covering the authority to do so. The GSIS also disregarded Fernandos prior subject property was foreclosed, and on March 26, 1973, the right to buy back his family home and lot in violation of the same was sold at a public auction where the petitioner was laws. The Register of Deeds of Cotabato acted with abuse of the only bidder in the amount of P36,283.00. For failure of power and authority when it issued the TCT in favor of CMTC Fernando to redeem the said property within the designated without requiring the CMTC to submit its supporting papers period, petitioner executed an Affidavit of Consolidation of as required by the law. Ownership on September 5, 1975. Consequently, TCT No. T- 16035 was cancelled and TCT No. T-45874 was issued in the Petitioner and its officers filed their Answer with Affirmative name of petitioner. Defenses and Counterclaim.4 The GSIS alleged that Fernando lost his right of redemption. He was given the chance to On November 26, 1975, petitioner wrote a letter to Fernando, repurchase the property; however, he did not avail of such informing him of the consolidation of title in its favor, and option compelling the GSIS to dispose of the property by requesting payment of monthly rental in view of Fernandos public bidding as mandated by law. There is also no prior continued occupancy of the subject property. In reply, right to buy back that can be exercised by Fernando. Further, Fernando requested that he be allowed to repurchase the it averred that the articles of incorporation and other papers same through partial payments. Negotiation as to the of CMTC were all in order. In its counterclaim, petitioner repurchase by Fernando of the subject property went on for alleged that Fernando owed petitioner the sum of several years, but no agreement was reached between the P130,365.81, representing back rentals, including additional parties. interests from January 1973 to February 1987, and the additional amount of P249,800.00, excluding applicable On January 16, 1989, petitioner scheduled the subject interests, representing rentals Fernando unlawfully collected property for public bidding. On the scheduled date of bidding, from Carmelita Ang Hao from January 1973 to February 1988. Fernandos daughter, Jocelyn Caballero, submitted a bid in the amount of P350,000.00, while submitted a bid in the amount After trial, the RTC, in its Decision5 dated September 27, of P450,000.00. Since CMTC was the highest bidder, it was 1994, ruled in favor of petitioner and dismissed the awarded the subject property. On May 16, 1989, the Board of complaint. In the same decision, the trial court granted Trustees of the GSIS issued Resolution No. 199 confirming the petitioners counterclaim and directed Fernando to pay award of the subject property to CMTC for a total petitioner the rentals paid by CMTC in the amount of consideration of P450,000.00. Thereafter, a Deed of Absolute P249,800.00. The foregoing amount was collected by Sale was executed between petitioner and CMTC on July 27, Fernando from the CMTC and represents payment which was 1989, transferring the subject property to CMTC. not turned over to petitioner, which was entitled to receive Consequently,TCT No. T-45874 in the name of GSIS was the rent from the date of the consolidation of its ownership cancelled, and TCT No. T-76183 was issued in the name of over the subject property. CMTC. Fernando filed a motion for reconsideration, which was Due to the foregoing, Fernando, represented by his daughter denied by the RTC in an Order dated March 27, 1995. and attorney-in-fact, Jocelyn Caballero, filed with the Regional Trial Court (RTC) of Kabacan, Cotabato a Complaint3 against Aggrieved by the Decision, respondent filed a Notice of CMTC, the GSIS and its responsible officers, and the Register Appeal.6 The CA, in its Decision dated December 17, 2002, of Deeds of Kidapawan, Cotabato. Fernando prayed, among affirmed the decision of the RTC with the modification that others, that judgment be rendered: declaring GSIS Board of the portion of the judgment ordering Fernando to pay rentals Trustees Resolution No. 199, dated May 16, 1989, null and in the amount of P249,800.00, in favor of petitioner, be void; declaring the Deed of Absolute Sale between petitioner deleted. Petitioner filed a motion for reconsideration, which and CMTC null and void ab initio; declaring TCT No. 76183 of the CA denied in a Resolution dated April 29, 2003. Hence, the Register of Deeds of Kidapawan, Cotabato, likewise, null the instant petition. and void ab initio; declaring the bid made by Fernando in the An Ex Parte Motion for Substitution of Party,7 dated July 18, amount of P350,000.00 for the repurchase of his property as 2003, was filed by the surviving heirs of Fernando, who died the winning bid; and ordering petitioner to execute the on February 12, 2002. They prayed that they be allowed to be corresponding Deed of Sale of the subject property in favor of substituted for the deceased, as respondents in this case. Fernando. He also prayed for payment of moral damages, exemplary damages, attorneys fees and litigation expenses. Petitioner enumerated the following grounds in support of its petition: In his complaint, Fernando alleged that there were irregularities in the conduct of the bidding. CMTC I misrepresented itself to be wholly owned by Filipino citizens. It misrepresented its working capital. Its representative THE HONORABLE COURT OF APPEALS COMMITTED AN Carmelita Ang Hao had no prior authority from its board of ERROR OF LAW IN HOLDING THAT GSIS COUNTERCLAIM, directors in an appropriate board resolution to participate in AMONG OTHERS, OF P249,800.00 REPRESENTING RENTALS the bidding. The corporation is not authorized to acquire real COLLECTED BY PRIVATE RESPONDENT FROM CARMELITA estate or invest its funds for purposes other than its primary MERCANTILE TRADING CORPORATION IS IN THE NATURE OF purpose. Fernando further alleged that the GSIS allowed A PERMISSIVE COUNTERCLAIM WHICH REQUIRED THE PAYMENT BY GSIS OF DOCKET FEES BEFORE THE TRIAL COURT CAN ACQUIRE JURISDICTION OVER SAID Tested against the above-mentioned criteria, this Court COUNTERCLAIM. agrees with the CAs view that petitioners counterclaim for the recovery of the amount representing rentals collected by II Fernando from the CMTC is permissive. The evidence needed by Fernando to cause the annulment of the bid THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR award, deed of absolute sale and TCT is different from that OF LAW IN HOLDING THAT GSIS DOCUMENTARY EVIDENCE required to establish petitioners claim for the recovery of SUPPORTING ITS CLAIM OF P249,800.00 LACKS PROPER rentals. IDENTIFICATION.8 The issue in the main action, i.e., the nullity or validity of the The petition of the GSIS seeks the review of the CAs Decision bid award, deed of absolute sale and TCT in favor of CMTC, is insofar as it deleted the trial courts award of P249,800.00 in entirely different from the issue in the counterclaim, i.e., its favor representing rentals collected by Fernando from the whether petitioner is entitled to receive the CMTCs rent CMTC. payments over the subject property when petitioner became In their Memorandum, respondents claim that CMTC cannot the owner of the subject property by virtue of the purchase real estate or invest its funds in any purpose other consolidation of ownership of the property in its favor. than its primary purpose for which it was organized in the The rule in permissive counterclaims is that for the trial court absence of a corporate board resolution; the bid award, deed to acquire jurisdiction, the counterclaimant is bound to pay of absolute sale and TCT No. T-76183, issued in favor of the the prescribed docket fees.13 This, petitioner did not do, CMTC, should be nullified; the trial court erred in concluding because it asserted that its claim for the collection of rental that GSIS personnel have regularly performed their official payments was a compulsory counterclaim. Since petitioner duty when they conducted the public bidding; Fernando, as failed to pay the docket fees, the RTC did not acquire former owner of the subject property and former member of jurisdiction over its permissive counterclaim. The judgment the GSIS, has the preemptive right to repurchase the rendered by the RTC, insofar as it ordered Fernando to pay foreclosed property. petitioner the rentals which he collected from CMTC, is These additional averments cannot be taken cognizance by considered null and void. Any decision rendered without the Court, because they were substantially respondents jurisdiction is a total nullity and may be struck down at any arguments in their petition for review on certiorari earlier time, even on appeal before this Court.14 filed before Us and docketed as G.R. No. 156609. Records Petitioner further argues that assuming that its counterclaim show that said petition was denied by the Court in a is permissive, the trial court has jurisdiction to try and decide Resolution9 dated April 23, 2003, for petitioners the same, considering petitioners exemption from all kinds of (respondents herein) failure to sufficiently show that the fees. Court of Appeals committed any reversible error in the challenged decision as to warrant the exercise by this Court of In In Re: Petition for Recognition of the Exemption of the its discretionary appellate jurisdiction.10 Said resolution Government Service Insurance System from Payment of Legal became final and executory on June 9, 2003.11 Respondents Fees,15 the Court ruled that the provision in the Charter of attempt to re-litigate claims already passed upon and the GSIS, i.e., Section 39 of Republic Act No. 8291, which resolved with finality by the Court in G.R. No. 156609 cannot exempts it from all taxes, assessments, fees, charges or be allowed. duties of all kinds, cannot operate to exempt it from the payment of legal fees. This was because, unlike the 1935 and Going now to the first assigned error, petitioner submits that 1973 Constitutions, which empowered Congress to repeal, its counterclaim for the rentals collected by Fernando from alter or supplement the rules of the Supreme Court the CMTC is in the nature of a compulsory counterclaim in the concerning pleading, practice and procedure, the 1987 original action of Fernando against petitioner for annulment Constitution removed this power from Congress. Hence, the of bid award, deed of absolute sale and TCT No. 76183. Supreme Court now has the sole authority to promulgate Respondents, on the other hand, alleged that petitioners rules concerning pleading, practice and procedure in all counterclaim is permissive and its failure to pay the courts. prescribed docket fees results into the dismissal of its claim. In said case, the Court ruled that: To determine whether a counterclaim is compulsory or not, the Court has devised the following tests: (a) Are the issues of The separation of powers among the three co-equal fact and law raised by the claim and by the counterclaim branches of our government has erected an impregnable wall largely the same? (b) Would res judicata bar a subsequent suit that keeps the power to promulgate rules of pleading, on defendants claims, absent the compulsory counterclaim practice and procedure within the sole province of this Court. rule? (c) Will substantially the same evidence support or The other branches trespass upon this prerogative if they refute plaintiffs claim as well as the defendants enact laws or issue orders that effectively repeal, alter or counterclaim? and (d) Is there any logical relation between modify any of the procedural rules promulgated by this Court. the claim and the counterclaim? A positive answer to all four Viewed from this perspective, the claim of a legislative grant questions would indicate that the counterclaim is of exemption from the payment of legal fees under Section 39 compulsory.12 of RA 8291 necessarily fails. Congress could not have carved out an exemption for the complaint; hence, the rule laid down in Sun Insurance finds GSIS from the payment of legal fees without transgressing no application in the present case. another equally important institutional safeguard of the Courts independencefiscal autonomy. Fiscal autonomy Due to the non-payment of docket fees on petitioners recognizes the power and authority of the Court to levy, counterclaim, the trial court never acquired jurisdiction over assess and collect fees, including legal fees. Moreover, legal it and, thus, there is no need to discuss the second issue fees under Rule 141 have two basic components, the Judiciary raised by petitioner. Development Fund (JDF) and the Special Allowance for the WHEREFORE, the petition is DENIED. The Decision and the Judiciary Fund (SAJF). The laws which established the JDF and Resolution, dated December 17, 2002 and April 29, 2003, the SAJF expressly declare the identical purpose of these funds to guarantee the independence of the Judiciary as respectively, of the Court of Appeals in CA-G.R. CV. No. 49300, mandated by the Constitution and public policy. Legal fees are AFFIRMED. therefore do not only constitute a vital source of the Courts financial resources but also comprise an essential element of SO ORDERED. Government Service Insurance System (GSIS) the Courts fiscal independence. Any exemption from the vs. Heirs of Fernando F. Caballero, 632 SCRA 5, G.R. No. payment of legal fees granted by Congress to government- 158090 October 4, 2010 owned or controlled corporations and local government units will necessarily reduce the JDF and the SAJF. Undoubtedly, such situation is constitutionally infirm for it impairs the Courts guaranteed fiscal autonomy and erodes its independence.
Petitioner also invoked our ruling in Sun Insurance Office, Ltd.
v. Judge Asuncion,16 where the Court held that:
x x x x
3.Where the trial court acquires jurisdiction over a claim by
the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.
In Ayala Corporation v. Madayag,17 the Court, in interpreting
the third rule laid down in Sun Insurance Office, Ltd. v. Judge Asuncion regarding awards of claims not specified in the pleading, held that the same refers only to damages arising after the filing of the complaint or similar pleading as to which the additional filing fee therefor shall constitute a lien on the judgment.
The amount of any claim for damages, therefore, arising on
or before the filing of the complaint or any pleading should be specified. While it is true that the determination of certain damages as exemplary or corrective damages is left to the sound discretion of the court, it is the duty of the parties claiming such damages to specify the amount sought on the basis of which the court may make a proper determination, and for the proper assessment of the appropriate docket fees. The exception contemplated as to claims not specified or to claims although specified are left for determination of the court is limited only to any damages that may arise after the filing of the complaint or similar pleading for then it will not be possible for the claimant to specify nor speculate as to the amount thereof. (Emphasis supplied.)
Petitioners claim for payment of rentals collected by
Fernando from the CMTC did not arise after the filing of the
China Banking Corporation, Attys. Reynaldo m. Cabusora and Renato c. Taguiam, Petitioners, Vs. Court of Appeals, Hon. Pedro t. Santiago, Sps. So Ching and Cristina So, And Native West International Trading Corp., Respondents.