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4/30/2020 ADM. MATTER NO.

RTJ-04-1848

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Republic of the Philippines


SUPREME COURT

SECOND DIVISION

ADM. MATTER NO. RTJ-04-1848 October 25, 2005

(Formerly OCA I.P.I. No. 03-1804-RTJ)

Philippine Amusement and Gaming Corporation (PAGCOR), represented by Atty. Carlos R. Bautista, Jr.,
Complainant,
vs.
HON. ROMULO A. LOPEZ, CHICO-NAZARIO,* Presiding Judge, Branch 34, Regional Trial Court, Manila,
Respondent.

RESOLUTION

AUSTRIA-MARTINEZ, J.:

PAGCOR filed the instant administrative complaint against Judge Romulo A. Lopez of the Regional Trial Court
(RTC) of Manila, Branch 34, seeking his dismissal from the service for alleged gross ignorance of the law and for his
disbarment for such ignorance, violation of the lawyer’s oath and the Code of Professional Responsibility.

The administrative complaint stemmed from the proceedings in Civil Case No. 00-99133,1 entitled, Filipinas Gaming
Entertainment Totalizator Corporation (FILGAME) vs. PAGCOR, Department of Interior and Local Government
(DILG), and Secretary Alfredo S. Lim, filed with the RTC of Manila and assigned by raffle to Branch 34 presided by
respondent Judge. The antecedents and the pertinent proceedings that transpired therein are as follows:

On June 17, 1999, PAGCOR entered into an Agreement with FILGAME and BELLE Jai-Alai Corporation (BELLE)
for the resumption of the Jai-Alai operations in the country.2 FILGAME and BELLE jointly agreed to provide funds, at
no cost to complainant, for pre-operating expenses and working capital. PAGCOR shall manage, operate and
control all aspects of the Jai-Alai operations.

On October 19, 2000, the Office of the President of the Philippines issued a Memorandum addressed to Alicia Ll.
Reyes, then PAGCOR Chairperson and Chief Executive Officer, directing her to take immediate steps to close down
all PAGCOR facilities and outlets in Jai-Alai, on-line bingo and internet casino gaming.

On October 20, 2000, DILG, through then Secretary Alfredo S. Lim, caused the closure of the Jai-Alai main fronton.

Thus, on November 6, 2000, FILGAME and BELLE filed the case for Specific Performance and Injunction with
prayer for Damages and Temporary Restraining Order (TRO), and Writ of Preliminary Injunction3 against PAGCOR,
DILG and Secretary Alfredo Lim, docketed as Civil Case No. 00-99133 and raffled to herein respondent Judge.

On November 10, 2000, respondent issued a writ of temporary restraining order effective for 20 days.

On November 29, 2000, this Court rendered a decision in the cases, entitled, Raoul B. Del Mar vs. PAGCOR,
BELLE and FILGAME and Federico S. Sandoval II and Michael T. Defensor vs. PAGCOR,4 the decretal portion of
which reads:

WHEREFORE, the petitions are GRANTED. Respondents PAGCOR, Belle Jai-Alai Corporation and Filipinas
Gaming Entertainment Totalizator Corporation are enjoined from managing, maintaining and operating jai-alai
games, and from enforcing the agreement entered into by them for that purpose.

Motions for Reconsideration filed by PAGCOR, BELLE and FILGAME were subsequently denied.

Consequently, FILGAME and BELLE filed a Motion to Admit Amended Complaint5 with the trial court where the
cause of action was changed, i.e., from Specific Performance to Recovery of Sum of Money, inasmuch as plaintiffs
could no longer ask for specific performance of their agreement with complainant since the Court had declared the
agreement without force and effect. Thus, FILGAME and BELLE sought to recover their pre-operating expenses
and/or investments totaling ₱1,562,145,661.87 including the goodwill money of ₱200,000,000.00 which they
allegedly invested with the complainant. Complainant filed an opposition on the ground that there is a substantial
change in the complaint and cause of action.

On November 27, 2001, respondent issued an Order6 admitting the amended complaint and directing complainant
and DILG to file their answer.

Complainant filed a motion to dismiss the amended complaint7 on the ground that the trial court had not acquired
jurisdiction over the case for failure of the plaintiffs to pay the prescribed docket fees considering that the docket fee
originally paid was only ₱1,212.00. It claimed that per the affidavit of Atty. Ma. Concepcion Gloria,8 complainant’s
representative, she attested to the fact that as computed by the Docket Fee Assessor, the amended complaint,
which sought recovery of the ₱1,562,145,661.87 including the ₱200,000,000 goodwill money, should have docket
fees of ₱15,775,903.68.

On June 19, 2002, respondent issued an Order9 denying complainant’s motion to dismiss and directed it to file its
answer. Respondent judge made the following ratiocination:

Considering the parties arguments, this Court is of the opinion and so holds that there is no basis for dismissing the
amended complaint since the original complaint was filed and the corresponding docket fee was paid by the plaintiff,
the Court had acquired jurisdiction over the said complaint. Having done so, and considering the rule for the
payment of the docket fees set forth in the Sun Insurance Office, Ltd. with respect to initiatory pleadings, there is no
firm ground to dismiss the Amended Complaint.

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Under the said ruling "where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the
Court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or
reglementary period." If a late payment of the docket fee is allowed in filing initiatory pleading to vest jurisdiction to
the Court, with more reason the same leniency should be afforded in an amended pleading/complaint which sets out
additional/new cause of action necessitating the increase of the docket fee. The plaintiff is correct in not immediately
paying the additional filing fee before the amended complaint is admitted for why will it pay when there is no
assurance that the amended complaint will be admitted.

Once jurisdiction is acquired and vested in a Court, said Court maintains its jurisdiction until judgment is had.
(Aruego, Jr., et al. vs. CA, 254 SCRA 711-719). Such acquired jurisdiction is not lost by the amendment of a
pleading that raises additional/new cause(s) of action. The jurisdiction of a Court is not lost even if additional docket
fees are required by reason of the amendment.

In the same ruling in Sun Insurance case, "any additional filing (docket) fee shall constitute a lien on the judgment
and that 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 provided that the cause of action has not prescribed."

Moreover in Yuchengco vs. Republic, 333 SCRA 368, 381, the Supreme Court even allowed the payment of the
filing fees beyond the prescriptive period.

Complainant then filed its Answer with compulsory counterclaim.10 A pre-trial conference was conducted. On
October 10, 2002, respondent issued a Pre-trial Order and at the same time directed the parties to submit their
respective comments and/or manifestations on the said order. The pre-trial order listed 13 issues to be resolved.

During the October 25, 2002 hearing, FILGAME and BELLE manifested their intention to file a Motion for Summary
Judgment which they subsequently filed. Complainant filed its opposition thereto. Respondent did not conduct any
hearing on the motion for summary judgment.

On May 19, 2003, respondent rendered his decision by way of Summary Judgment11 in favor of FILGAME and
BELLE where complainant was ordered to return and pay the sum of ₱1,562,145,661.87, representing the amount
of pre-operating expenses and/or investment including the goodwill money given by plaintiffs and the release of
₱500,000.00 cash bond posted in support of the TRO.

On June 10, 2003, complainant filed its notice of appeal12 which was subsequently withdrawn.

On June 12, 2003, complainant filed with the Court of Appeals (CA) a petition for certiorari seeking the annulment of
the respondent’s decision by way of summary judgment for having been rendered without or in excess of jurisdiction
and with grave abuse of discretion.13

On July 8, 2003, complainant filed the present administrative case charging respondent with gross ignorance of the
law and for violations of the Lawyer’s Oath and Code of Professional Responsibility in connection with his actions in
Civil Case No. 00-99133.

In a Resolution dated January 26, 2004,14 we deferred action on this complaint until the final resolution of the
petition for certiorari filed before the CA.

On January 21, 2004, a judgment by compromise agreement15 was rendered by the CA in the certiorari case filed
with it and an entry of judgment was subsequently made.16 Thereafter, complainant sought the continuation of the
pending administrative case because there was no longer any legal impediment with the resolution of the certiorari
case.

Complainant charges respondent for gross ignorance of the law and procedure in (1) admitting the amended
complaint of plaintiffs FILGAME and BELLE in Civil Case No. 00-99133 despite the fact that (a) the amended
complaint is a total change of theory of the case; and (b) that the required filing fees for the amended complaint
were not paid; and (2) in rendering summary judgment (a) despite the fact that respondent found the existence of 13
factual issues to be resolved; (b) without conducting a hearing on the motion for summary judgment; (c) based on
the alleged implied admission rather than on the personal knowledge of witnesses and other affiants; and (d)
despite the fact that plaintiffs were estopped from denying the existence of these 13 issues raised in the pre-trial
order.

Complainant contends that respondent denied its motion to dismiss the amended complaint without requiring
plaintiffs FILGAME and BELLE to pay the correct docket fees within a reasonable time from the admission of the
amended complaint, thus the court is deprived of its lawful docket fees in the amount of ₱15,774,691.68; that
respondent’s reliance on the third rule enunciated in the Sun Insurance, i.e., allowing docket fee to constitute as lien
on the judgment, finds no application in the civil case since the ₱1.5 Billion claim is not in the nature of an award not
specified in the pleading.

Complainant claims that respondent Judge was grossly ignorant of the law when he disregarded the 13 factual
issues enumerated in his Pre-trial Order dated October 10, 2002 and rendered a summary judgment on the case;
that in rendering a summary judgment, he disposed of the case with undue haste thus depriving it of its day in court;
that no hearing was conducted by respondent for purposes of resolving FILGAME and BELLE’s motion for summary
judgment as provided under Section 3, Rule 35 of the Rules on Civil Procedure; that although opposition, reply and
rejoinder were submitted by the parties, the same appeared to be inadequate considering the mandatory nature of
the summary hearing.

Complainant avers that respondent granted summary judgment based on its alleged implied admissions when it
failed to specifically deny certain material allegations in the amended complaint and other pleadings of FILGAME
and BELLE; that such is contrary to Section 5, Rule 35 and jurisprudence.

In his Comment, respondent denied having committed gross ignorance of the law in admitting the amended
complaint since dismissal is not the consequence provided for in not paying the right docket fee at the time the
complaint or initiatory pleading is filed; that the trial court acquires jurisdiction over a claim by the filing of appropriate
pleading and payment of the prescribed filing fee but when subsequently the judgment awards a claim not specified
in the pleading, the additional filing fee therefor shall constitute a lien on the judgment.

He argues that the grant of summary judgment despite the existence of a list of issues in his Pre-trial Order dated
October 10, 2002 was not even final and only listed issues or matters which complainant refused to admit when
counsel for BELLE and FILGAME asked for stipulations; that the holding of a trial type hearing is not absolutely
indispensable for the court to rule on a motion for summary judgment; that he granted the motion for summary
judgment not solely on the implied admissions made by complainant but based on the evidence on record and that
complainant’s contention that plaintiffs are estopped from challenging the list of issues in the Pre-trial Order is
without basis since plaintiffs had vigorously insisted for a summary judgment.

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Complainant filed a Reply where it claimed that because of respondent’s undue haste in rendering summary
judgment, some of its evidence were suppressed.

Respondent filed his Rejoinder where he stated that in his Order dated February 19, 2004, he required the payment
of additional docket fees on the amended complaint which was complied with; that since it was the clerk of court
who computed the same, any deficiency can still be collected by issuing another order. He denied the suppression
of evidence since the alleged evidence were not attached to its answer to the amended complaint.

Complainant filed a Sur-rejoinder claiming that the additional docket fees were based on the compromise agreement
entered by the parties in the CA in the amount of ₱120 million and not in the amended complaint for recovery of
money in the amount of ₱1.56 billion.

In a Resolution dated September 15, 2004,17 the Court referred the case to Justice Noel G. Tijam of the CA for
investigation, report and recommendation.

The Investigating Justice submitted his Report recommending the dismissal of the administrative and the
disbarment complaint against respondent for patent lack of merit, based on the following findings:

Anent the issue on non-payment of docket fees on the amended complaint -

Based on the evidence, the undersigned Investigator finds that Respondent Judge did not commit gross ignorance
of the law in admitting the amended complaint. There is no evidence that the respondent Judge acted in bad faith or
was motivated by fraud, dishonesty or corruption in issuing the assailed order.

It is a well-settled rule that once the jurisdiction of the court attaches, it continues until the case is finally terminated.
The trial court cannot be ousted therefrom by subsequent happenings of events, although of a character would have
prevented jurisdiction from attaching in the first instance.

The trial court validly acquired jurisdiction over the amended complaint. In the case of PNOC Shipping and
Transport Corp. vs. CA, the Supreme Court ruled that the plaintiff’s failure to pay the docket fee corresponding to its
increased claim for damages to ₱600,000.00 under the amended complaint should not be considered as having
curtailed the lower court’s jurisdiction. Pursuant to the ruling in Sun Insurance Office, Ltd. vs. Asuncion, the unpaid
docket fee should be considered as a lien on the judgment even though private respondent therein specified the
amount of ₱600,000.00 as its claim for damages in its amended complaint. Besides, it is too late in the day to invoke
lack of jurisdiction because the case decided by the respondent Judge elevated on appeal to the Court of Appeals
has become final and executory when PAGCOR voluntarily entered into a compromise agreement in the Court of
Appeals.

Respondent Judge did not deviate from the rules when he did not dismiss the amended complaint for failure to pay
the additional docket fee because the court may still require the same to be paid within a reasonable time and in no
case beyond the prescriptive period. The timely payment of docket fees is jurisdictional, but considerations of law
and equity come into the picture. Despite the jurisdictional nature on the rule on the payment of the docket fee, the
court still has discretion to relax the rule in meritorious cases.

Furthermore, the undersigned Investigator agrees with Respondent Judge’s argument that the assailed Order was
consistent with Sec. 3, Rule 10 of the Rules on Civil Procedure, as amended and the ruling in the case of Pagubo
vs. CA. Indeed, although an amendment may substantially change or alter the cause of action or defense, the same
must serve the higher interests of substantial justice, and prevent delay and equally promote the laudable objective
of the rules which is to secure a "just, speedy and inexpensive disposition of every action and proceedings."

Contrary to PAGCOR’s claim that Respondent Judge failed to issue an order to collect the additional docket fees,
the evidence shows that Respondent Judge in fact issued an Order dated February 19, 2004, directing the Clerk of
Court of the RTC of Manila to collect and require payment of docket fees within 15 days. The order was issued after
the entry of judgment on a compromise which automatically lifted the TRO which earlier prevented the Respondent
Judge from directing Belle and Filgame to pay the additional fees. Moreover, at PAGCOR’s instance, Respondent
Judge issued another Order dated October 26, 2004 directing the Clerk of Court to recompute the docket fee.

As to the claim that respondent judge rendered summary judgment despite the 13 factual issues embodied in the
Pre-trial Order and that he did not find that plaintiffs are estopped from denying these factual issues –

Section 10 of Rule 8 of the Rules provides that if the defendant is without knowledge or information sufficient to form
a belief as to the truth of the material averment in the complaint, he is bound to so state and this shall have the
effect of denial. In such a case it is indispensable that the matter denied for lack of knowledge is alleged be clearly
set forth so that the adverse party is informed of what is denied.

A scrutiny of the amended answer of PAGCOR in Civil Case No. 00-99133, shows that PAGCOR actually knows the
gross and net income from the Jai-Alai operations, the tax paid by PAGCOR and the pre-operating expenses of
Belle and Filgame. Considering that the Agreement between PAGCOR and Filgame and Belle provided that
PAGCOR shall manage, operate and control all aspects of Jai-Alai operation pursuant to its franchise, it would have
been unbelievable for them not to know the gross and net income from the Jai-Alai operations from June 1999 to
December 2000; the tax paid by PAGCOR to BIR; and the effect of Jai- Alai operations on the government revenues
and where the income of PAGCOR was used. Furthermore, Belle and Filgame had furnished PAGCOR a copy of
the amount of pre-operating per request of PAGCOR as evidenced by a letter dated September 15, 1999 of
Edgardo M. del Fonso, President of Belle Jai-Alai Corporation addressed to Renaldo Tenorio, President and Chief
Operating Officer of PAGCOR and the receipt of which was not denied by PAGCOR.

PAGCOR’s blanket denial of the said allegations in the amended complaint is ineffective because such facts are
within PAGCOR’s knowledge. Thus, said denial was properly treated as an admission.

Indeed, in a similar case, PNB vs. Court of Appeals, the private respondent therein denied the averments in the
complaint regarding the fact of withdrawal of $14,056.25 in PCIB-Cagayan de Oro City Account No. 16087 and the
surrounding circumstances of said withdrawal. The private respondent, however, admitted the averment in the
complaint that he is the sole signatory of the subject account. The Supreme Court considered said denial as
ineffective because such fact was within the knowledge of the private respondent, being the sole signatory to the
said account. Private respondent’s denial was consequently declared by the Supreme Court as equivalent to an
admission.

Respondent Judge, therefore, correctly granted the motion for summary judgment based on the Agreement dated
June 17, 1999 and the stipulation made by PAGCOR’s counsel, Atty. Bautista, regarding the records of summary
operations covering the period of June 1999 to October 2000 being true and correct, having been prepared by a
responsible officer of PAGCOR and based on the existing records of PAGCOR.

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All told, based on the evidence, PAGCOR was privy to all the material allegations in the amended complaint relating
to the Jai-Alai operations. It would have been incredulous for PAGCOR to claim ignorance or lack of knowledge of
said material allegations.

Convincingly, Respondent Judge had sufficient basis to render summary judgment.

As to the claim that the summary judgment was rendered without hearing -

Based on the evidence,we find that Respondent Judge did not commit gross ignorance of the law in not conducting
a trial type hearing in resolving the motion for summary judgment. Well-settled is the rule that, in proceedings for
summary judgment, the court is merely expected to act chiefly on the basis of what is on the records of the case and
that the hearing contemplated in the Rules is not de riguer as its purpose is only to determine whether the issues
are genuine or not and not to receive evidence on issues set up in the pleadings.

Based on the records and the evidence presented, the trial type hearing on the motion was dispensable in view of
the fact that PAGCOR’s blanket/ineffective denial in its answer to the amended complaint had the effect of an
admission, thus, did not raise any genuine issues. Furthermore, a hearing on the motion for summary judgment was
not necessary considering that the evidence necessary for the resolution of the same was already part of the
records. It is evident from the records, particularly in the minutes of the hearings held on November 22, 2002 and
February 10, 2003, as well as Respondent Judge’s Order issued on even dates, that PAGCOR was given ample
opportunity to be heard and present its evidence in opposition to the motion for summary judgment, but PAGCOR
chose not to adduce any such evidence. The scheduled hearing on the motion for summary judgment was cancelled
and the motion was considered submitted for resolution without PAGCOR objecting on the absence of a hearing.
PAGCOR, therefore, cannot now insist that Respondent Judge should have conducted a hearing on the motion.

As to the claim that respondent Judge granted the summary judgment based on complainant’s implied admissions -

It is a recognized rule in summary judgment that the trial court can determine whether there is genuine issue on the
basis of the pleadings, admissions, documents, affidavits, and/or counter-affidavits submitted by the parties. On the
basis of this rule PAGCOR cannot claim that Respondent Judge was grossly ignorant of the law and procedure
when he rendered summary judgment based on implied admissions of the material facts in the amended complaint
and not on personal knowledge of witnesses and other affiants. PAGCOR cannot rely solely on Section 5, Rule 35
of the Rules of Court because the provision pertains only to cases when affidavits and supporting papers are
submitted to establish whether there is genuine issue. Such supporting affidavits must be made on personal
knowledge. Section 1, Rule 35 is explicit that the movant of the motion for summary judgment can support his
motion with affidavits, depositions and admissions. It is illogical to claim that a motion for summary judgment must
be resolved based on affidavits alone, considering that the Rules are clear that the motion can likewise be
supported by depositions and admissions.

As to complainant’s claim that respondent Judge should be disbarred because he violated the laws, rules and legal
principles -

The complaint for violation of lawyer’s oath and Code of Professional Responsibility is not meritorious.

The complaint for disbarment is unfounded. There was no gross ignorance of the law and procedure committed by
the Respondent Judge. Considering the evidence presented, Respondent Judge conducted the proceedings in
accordance with the applicable laws and procedure. To constitute gross ignorance of the law, the judge’s actuation
must not only be contrary to law and jurisprudence, the judge must have also been moved by bad faith, fraud,
dishonesty or corruption. The records are also bereft of any showing of bad faith, fraud, dishonesty and corruption
on the part of the Respondent Judge.

It is settled that in administrative proceedings, the complainant has the burden of substantiating the charges
asseverated in the complaint. The complainant has the burden of proving the allegations in the complaint with
substantial evidence. In the absence of evidence to the contrary, the presumption that respondent has regularly
performed his duties will prevail. Applying the same in the case, PAGCOR failed to support its allegations with
substantial and competent evidence to warrant the dismissal and disbarment of the Respondent Judge.

As a matter of policy, in the absence of fraud, dishonesty, and corruption, the acts of the judge in his judicial capacity
are not subject of disciplinary action even though such acts are erroneous. He cannot be subjected to liability – civil,
criminal, or administrative – for any of his official acts, no matter how erroneous, as long as he acts in good faith.
Only judicial errors tainted with fraud, dishonesty, gross ignorance, bad faith or deliberate intent to do an injustice
will be administratively sanctioned. To hold otherwise, would be to render the judicial office untenable, for no one is
called upon to try the facts or interpret the law in the process of administering justice can be infallible in his
judgment.

Well-settled is the rule that, if a party is prejudiced by the orders of a judge, his remedy lies with the proper court for
proper judicial action and not with the office of the Court Administrator by means of an administrative complaint. It is
an established doctrine and policy that disciplinary proceedings and criminal actions against judges are not
complementary or suppletory of, nor a substitute for, these judicial remedies, whether ordinary or extraordinary.
Resort to and exhaustion of these judicial remedies, as well as entry of judgment in the corresponding action or
proceeding, is pre-requisite for the taking of other measure against the person of the judges concerned. It is only
after the available judicial remedies have been exhausted and the appellate court have spoken with finality, the door
to an inquiry into his criminal, civil and administrative liability may be said to have opened or closed.

Here, the administrative complaint was filed by the Complainant pending the resolution of PAGCOR’s Petition for
Certiorari filed before the Court of Appeals. As such, the filing of this administrative case was in disregard of the
rules, if not malicious. Indeed, Civil Case No. 0099133 has not been resolved with finality at the time the
administrative complaint was filed with the Supreme Court. Also, a review of the records of the case discloses the
fact that counsels of PAGCOR were negligent in handling their case. Clearly, this baseless administrative case was
filed merely to harass Respondent Judge in the hope that the negligence of PAGCOR’s counsel would be
conveniently overlooked or unjustifiably mitigated.

The Court agrees with the findings and recommendation of the Investigating Justice that the administrative
complaint against respondent be dismissed.

The Court finds no gross ignorance of law committed by respondent when he admitted the amended complaint
notwithstanding that such amended complaint substantially altered the cause of action of plaintiffs FILGAME and
BELLE.

Section 3, Rule 10 of the Rules of Court, provides:

SECTION 3. Amendments by leave of court. Except as provided in the next preceding section, substantial
amendments may be made only upon leave of court. But such leave may be refused if it appears to the court that

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the motion was made with intent to delay. Orders of the court upon the matters provided in this section shall be
made upon motion filed in court, and after notice to the adverse party, and an opportunity to be heard.

As held in Valenzuela vs. CA,18

Interestingly, Section 3, Rule 10 of the 1997 Rules of Civil Procedure amended the former rule in such manner that
the phrase "or that the cause of action or defense is substantially altered" was stricken-off and not retained in the
new rules. The clear import of such amendment in Section 3, Rule 10 is that under the new rules, "the
amendment may (now) substantially alter the cause of action or defense." This should only be true, however,
when despite a substantial change or alteration in the cause of action or defense, the amendments sought to be
made shall serve the higher interests of substantial justice, and prevent delay and equally promote the laudable
objective of the rules which is to secure a "just, speedy and inexpensive disposition of every action and proceeding.
(emphasis supplied).

The original complaint filed by the plaintiffs was for specific performance and injunction with prayer for damages and
for TRO and writ of preliminary injunction against complainant while the amended complaint was for recovery of sum
of money. Such amendment to the original complaint was filed by plaintiffs FILGAME and BELLE after the Supreme
Court decision declared that complainant could not enter into a joint agreement with other corporations to operate
the Jai-Alai, and that the Agreement dated June 17, 1999 entered into between complainant and the plaintiffs is null
and void. However, since plaintiffs had provided funds for complainant’s pre-operating expenses and working
capital, plaintiffs had to file an amended complaint which seeks the recovery of their expenses. Although the
amended complaint substantially changed the cause of action of plaintiffs FILGAME and BELLE, the admission
thereof by respondent is allowed under Section 3, Rule 10 and jurisprudence.

The Court also finds that respondent was not guilty of gross ignorance of the law when he admitted the amended
complaint despite the non-payment by plaintiffs FILGAME and BELLE of additional docket fees on the amended
complaint. In Sun Insurance Office, Ltd. vs. Asuncion,19 the Court laid down the rules on the payment of docket fees
as follows:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed
docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of
the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee
within a reasonable time but in no case beyond the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be
considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said
fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

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.20

Respondent is correct in ruling in his Order dated June 19, 2002 that the court had jurisdiction over the amended
complaint as it had acquired jurisdiction over the case when the original complaint was filed and the corresponding
docket fee was paid thereon. Plainly, while the payment of the prescribed docket fee is a jurisdictional requirement,
even its non-payment at the time of filing does not automatically cause the dismissal of the case, as long as the fee
is paid within the applicable prescriptive or reglementary period. Respondent also stated in the same order that this
Court in the Sun Insurance case had further declared that "any additional filing (docket) fee shall constitute a lien on
the judgment and that 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 provided that the cause of action has not prescribed."

In PNOC Shipping and Transport Corporation vs. CA,21 the Court held:

With respect to petitioner's contention that the lower court did not acquire jurisdiction over the amended complaint
increasing the amount of damages claimed to ₱600,000.00, we agree with the Court of Appeals that the lower court
acquired jurisdiction over the case when private respondent paid the docket fee corresponding to its claim in its
original complaint. Its failure to pay the docket fee corresponding to its increased claim for damages under the
amended complaint should not be considered as having curtailed the lower court's jurisdiction. Pursuant to the ruling
in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, the unpaid docket fee should be considered as a lien on the
judgment even though private respondent specified the amount of ₱600,000.00 as its claim for damages in its
amended complaint.22

Thus, the unpaid additional docket fees should be considered as a lien on the judgment even though plaintiffs had
specified the amount of ₱1,562,145,661.87 in the prayer of the amended complaint.

Moreover, the issue of jurisdiction for non-payment of additional docket fees is deemed abandoned as there was
neither a motion for reconsideration nor a petition questioning such Order filed by complainant. In fact, when the
amended complaint was admitted and respondent directed complainant to file its answer, the latter filed its Answer
with compulsory counterclaim and without questioning the jurisdiction of the trial court on the ground of insufficient
payment of docket fees. Complainant even invoked the court’s authority when it asked for affirmative relief on its
counterclaim, thus it is estopped from challenging the court’s jurisdiction.23

Moreover, as observed by the Investigating Justice, "it is too late in the day to invoke lack of jurisdiction because the
civil case decided by the respondent which was elevated on appeal to the CA has become final and executory when
complainant voluntarily entered into a compromise agreement in the CA."24 Thus, the issues raised in the petition
for certiorari were not actually resolved. Thus, it becomes necessary for the Court to determine in the present
administrative case whether or not respondent is guilty of gross ignorance of the law.

Respondent, in his Order dated February 19, 2004, after the entry of judgment on the compromise agreement,
directed plaintiffs BELLE and FILGAME to cause the computation of the additional docket on the amended
complaint, of which the Clerk of Court of Manila is directed to collect. Plaintiffs paid the amount of ₱1,058,732.48.
However, it appeared that based on the affidavit of the collecting agent, she assessed the docket fees based on the
judgment on the compromise which was presented to her by the plaintiffs and not on the amended complaint as
stated in the respondent’s Order dated February 19, 2004, thus docket fees collected were still insufficient. If the
amount of docket fees paid is insufficient considering the amount of the claim, the clerk of court of the lower court
involved or his duly authorized deputy has the responsibility of making a deficiency assessment,25 thus it is no
longer the fault of respondent when there was a mistake in the assessment. However, when the matter was brought
to the attention of respondent by complainant in its sur-rejoinder in this administrative complaint, respondent called
the attention of the clerk of court where she was asked to recompute the same so that proper order can be issued.26

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Respondent, on November 18, 2004, issued another Order based on the compliance report submitted by the Clerk
of Court that plaintiffs have still to pay the amount of ₱14,717,171.19 based on the claim in the amended complaint
by directing the plaintiffs to pay within 15 days from receipt. These actuations of respondent are in accordance with
the Sun Insurance case.

Anent complainant’s claim that respondent was grossly ignorant of the law in rendering summary judgment (a)
based on implied admissions; (b) notwithstanding the 13 factual issues embodied in respondent’s Pre-Trial Order
dated October 10, 2002; and (c) without conducting a trial, the Court finds that these alleged errors committed by
respondent pertained to the performance of his adjudicative functions.

In Maquiran vs. Grageda,27 we held:

As everyone knows, the law provides ample judicial remedies against errors or irregularities being committed by a
Trial Court in the exercise of its jurisdiction. The ordinary remedies against errors or irregularities which may be
regarded as normal in nature (i.e., error in appreciation or admission of evidence, or in construction or application of
procedural or substantive law or legal principle) include a motion for reconsideration (or after rendition of judgment
or final order, a motion for new trial), and appeal. The extraordinary remedies against error or irregularities which
may be deemed extraordinary in character (i.e., whimsical, capricious, despotic exercise of power or neglect of duty,
etc.) are, inter alia, the special civil action of certiorari, prohibition or mandamus, or a motion for inhibition, a petition
for change of venue, as the case may be.

Now, the established doctrine and policy is that disciplinary proceedings and criminal actions against Judges are not
complementary or suppletory of, nor a substitute for, these judicial remedies, whether ordinary or extraordinary.
Resort to and exhaustion of these judicial remedies, as well as the entry of judgment in the corresponding action or
proceeding, are pre-requisites for the taking of other measures against the persons of the judges concerned,
whether of civil, administrative, or criminal nature. It is only after the available judicial remedies have been
exhausted and the appellate tribunals have spoken with finality, that the door to an inquiry into his criminal, civil, or
administrative liability may be said to have opened, or closed.

… Law and logic decree that "administrative" or criminal remedies are neither alternative nor cumulative to judicial
review where such review is available, and must wait on the result thereof'. Indeed, since judges must be free to
judge, without pressure or influence from external forces or factors, they should not be subject to intimidation, the
fear of civil, criminal or administrative sanctions for acts they may do and dispositions they may make in the
performance of their duties and functions; and it is sound rule, which must be recognized independently of statute,
that judges are not generally liable for acts done within the scope of their jurisdiction and in good faith; and that
exceptionally, prosecution of the judge can be had only if "there be a final declaration by a competent court in some
appropriate proceeding of the manifestly unjust character of the challenged judgment or order, and ** also evidence
of malice or bad faith, ignorance of inexcusable negligence, on the part of the judge in rendering said judgment or
order" or under the stringent circumstances set out in Article 32 of the Civil Code.

Considering that the resolution of these issues was foreclosed when the parties entered into a compromise
agreement in the petition for certiorari involving said issues, the Court, in the present administrative case, will not
and cannot resolve the same for obvious reason. The least that the Court can do, under the circumstances, is to
determine whether respondent may be held administratively liable for rendering the summary judgment.

The 13 issues which were embodied in the Pre-trial Order of the respondent judge are as follows:

1. Whether or not plaintiffs incurred the total expenses of ₱1,562,145,661.87;

2. Whether or not PAGCOR as a result of the expenditures which FILGAME and Belle agreed to bear PAGCOR
earned ₱200,000,000.00 goodwill money and a net income of ₱197,000,000.00;

3. Whether or not plaintiffs have only jointly earned ₱173,000,000.00 or barely 9% of their total investment of ₱1.56
Billion;

4. Whether or not PAGCOR’s Jai- Alai operations generated gross earnings in the aggregate amount of
₱2,826,947,353.00 from June of 1999 to November 30, 2000;

5. Whether or not the average earnings for that period is ₱157,052,630.73 per month for that same period;

6. Whether or not from the period from June 1999 to November 30, 2000 PAGCOR realized a net income of
₱199,738,755.31;

7. Whether or not from the period of June 1999 to November 30, 2000 PAGCOR remitted the amount of
₱262,470,808.71 to the BIR;

8. Whether or not with the reactivation of Jai-Alai operations no revenues were generated by the Philippine
government;

9. Whether or not PAGCOR’s earnings from Jai-Alai operations contributed immensely not only in terms of boosting
government’s coffers but directly funding socio-economic projects;

10. Whether or not Belle and FILGAME relying on the representations made by PAGCOR, the OGCC and the
Department of Justice have at all times faithfully complied with their obligations and undertakings with the end in
mind that they will be able to recover their investment and earn a responsible return thereon before the expiration of
the agreement between Belle and PAGCOR on the year 2008;

11. Whether or not Belle and FILGAME made its massive investment of financial and physical capital worth
approximately ₱1.56 Billion relying upon PAGCOR’s representation and the Philippine government’s categorical and
official representation through the OGCC and Department of Justice that it was legal for Belle and FILGAME to
recover its investment and profit through sharing in the income form (sic) an ongoing and legally sanctioned Jai-Alai
operation carried on by PAGCOR under and in accordance with the June 17, 1999 agreement between plaintiffs and
PAGCOR;

12. Whether or not PAGCOR closed the Jai-Alai operations before the finality of the resolution on June 19, 2001 and
without legal basis;

13. Whether or not PAGCOR may be required to pay Belle and FILGAME by way of quantum meruit compensation
for the use of facilities and network provided to PAGCOR, and for the services and technical know how already put
to service of PAGCOR and the government for the years 1999 to 2000 based on the expected return of investment
of Belle and FILGAME and the projected income of PAGCOR for the period ending in 2008.28

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A perusal of these issues convinces us that issues no. 1 and no. 13 are genuine issues which necessitate the
presentation of evidence so as to establish plaintiffs FILGAME and BELLE’s action for the recovery of the sum of
₱1.56 Billion. The Court finds that respondent erred in rendering the summary judgment, however, respondent could
not be held administratively liable. To justify the taking of drastic disciplinary action, the law requires that the error or
mistake of the judge must be gross or patent, malicious, deliberate or in bad faith.29 These are not present in the
instant case. The Investigating Justice finds, and the Court agrees, that there is no evidence showing that
respondent acted with malice in rendering the summary judgment. This is bolstered by the fact that a judgment by
compromise agreement was already rendered by the CA on the civil case and an entry of judgment was
subsequently made.

Moreover, the Court finds that respondent had meticulously explained why he found no genuine issue as to the fact
that plaintiffs are entitled to the recovery of their investments, to wit:

a. The provisions of the June 17, 1999 Agreement between PAGCOR, BELLE and FILGAME (Exh "1") which gave
PAGCOR the power to manage/operate and control all aspects of Jai-Alai operation, and the duty to both maintain
separate accounts, ledgers and other records and to render periodic accounting and financial reports relative to Jai-
Alai operation.

b. The fact that the Managing Head for Finance of PAGCOR’s Jai-Alai Department, Mrs. Esther H. Reyes, not only
testified that it was part of her job to make financial reports to management, but was able to produce both records of
the daily gross receipts of Jai-Alai operations for September 2000 and October, 2000 and summaries of the results
of those operations from June 1999 to October 2000.

c. The fact that PAGCOR counsel, Atty. Carlos R. Bautista, Jr. categorically stipulated that the records of daily gross
receipts and summaries of operations produced by Mrs. Esther H. Reyes are genuine and prepared by the
corresponding Jai-Alai Department of PAGCOR based on PAGCOR’s records.

d. The fact that FILGAMES’s Mr. Cesar Marcelo testified that PAGCOR required BELLE and FILGAME to submit
valuations of the properties contributed by it to the Jai-Alai operations and that FILGAME in compliance submitted
an appraisal report prepared by Cuervo Appraisers, Inc. while BELLE complied by submitting as an attachment to a
letter dated September 15, 1999 to PAGCOR President Mr. Reynaldo Y. Tenorio an inventory listing the value of the
assets contributed by BELLE and FILGAME to the Jai-Alai operation.30

We reiterate the rule that not every error or mistake that a judge commits in the performance of his duties renders
him liable, unless he is shown to have acted in bad faith or with deliberate intent to do an injustice. Good faith and
absence of malice, corrupt motives or improper considerations are sufficient defenses in which a judge charged with
ignorance of the law can find refuge.31

Anent the claim that there was no hearing conducted on the motion for summary judgment, the same was with the
acquiescence of PAGCOR’s counsel. The records show that the motion for summary judgment was set for hearing
by plaintiffs on December 1, 2002, i.e., 11 days from service of the motion as required by the Rules. In the Order
dated November 22, 2000 respondent granted PAGCOR’s prayer to be given 20 days to submit comment/opposition
to the motion for summary judgment to copy furnish plaintiffs’ counsel who is then given 7 days to file his reply and
for PAGCOR to file a rejoinder. The same order states that thereafter the pending incident shall be considered
submitted for resolution. Complainant did not ask for a hearing or any additional relief. It evidently agreed to the
respondent’s order that upon submission of those pleadings, the incident would be submitted for resolution. The
signature of complainant’s counsel affixed in the minutes showed his agreement thereto. In fact, in the Order dated
February 10, 2003, the respondent declared that both parties agreed that the motion and the subsequent pleadings
filed are submitted for resolution. Again, complainant’s counsel never registered his objections thereto as he in fact
affixed his signature to the minutes thereof. In Ley Construction and Development Corporation vs. Union Bank of the
Philippines,32 the Court held:

Admittedly, there is nothing in the records which indicates that Judge Arcangel conducted a hearing before he
resolved respondent’s motion for summary judgment. Nevertheless as explained in Carcon Development
Corporation v. Court of Appeals, in proceedings for summary judgment, the court is merely expected to act chiefly
on the basis of what is in the records of the case and that the hearing contemplated in the Rules is not de riguer as
its purpose is merely to determine whether the issues are genuine or not, and not to receive evidence on the issues
set up in the pleadings.33

Considering the foregoing, there exists no valid ground for the disbarment of respondent.

WHEREFORE, the instant administrative complaint against respondent Judge Romulo A. Lopez is DISMISSED.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

WE CONCUR:

REYNATO S. PUNO

Associate Justice

Chairman, Second Division

ROMEO J. CALLEJO, SR. DANTE O. TINGA

Associate Justice Associate Justice

(On Leave)

MINITA V. CHICO-NAZARIO

Associate Justice

Footnotes
*
On Leave.

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1 An amended complaint was filed to include BELLE Jai-Alai Corporation as plaintiff.

2 Rollo, pp. 478-484.

3 Id., pp. 566-593.

4 346 SCRA 485.

5 Rollo, pp. 557-564.

6 Id., pp. 597-599.

7 Id., pp. 600-604.

8 Id., pp. 605-607.

9 Id., pp. 50-52.

10 Id., pp. 608-614.

11 Id., pp. 35-40.

11 Id., pp. 42-49.

12 Id., p. 733.

13 Docketed as CA-G.R. SP No. 77458.

14 Rollo, p. 383.

15 Id., pp. 404-410; Penned by Justice Renato C. Dacudao and concurred in by Presiding Justice Cancio C.
Garcia (now member of this Court) and Justice Danilo B. Pine.

16 Id., p. 403.

17 Id., p. 812.

18 G.R. No. 131175, August 28, 2001, 363 SCRA 779, 787-788.

19 G.R. Nos. 79937-38, February 13, 1989, 170 SCRA 274.

20 Id., p. 285.

21 G.R. No. 107518, October 8, 1998, 297 SCRA 402.

22 Id., p. 427.

23 Id., p. 428.

24 Report and Recommendation, p. 9.

25 Rivera vs. del Rosario, G.R. No. 144934, January 15, 2004, 419 SCRA 626, 635.

26 CA Rollo, p. 142.

27 A.M. No. RTJ-04-1888, February 11, 2005, 451 SCRA 15, 42-44.

28 Rollo, pp. 39-40.

29 Fernandez vs. Español, A.M. No. MTJ-98-1150, April 15, 1998, 289 SCRA 1, 7, citing Roa, Sr. vs. Imbing,
A.M. No. RTJ-93-935, March 11, 1994, 231 SCRA 57, 61; Guillermo vs. Reyes, Jr., A.M. No. RTJ-93-1088,
January 18, 1995, 240 SCRA 154, 161; Alvarado vs. Laquindanum, A.M. No. MTJ-93-835, July 3, 1995, 245
SCRA 501, 504; Bengzon vs. Adaoag, A.M. No. MTJ-95-1045, November 28, 1995, 250 SCRA, 344, 348.

30 Rollo, pp. 470-471.

31 Balsamo vs. Suan, A.M. No. RTJ-01-1656, September 17, 2003, 411 SCRA 189.

32 G.R. No. 133801, June 27, 2000, 334 SCRA 443.

33 Id., p. 453.

The Lawphil Project - Arellano Law Foundation

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