674 SUPREME COURT

REPORTS ANNOTATED
Pilipinas Shell Petroleum Corp. vs.
Court of Appeals
G.R. No. 76119. April 10, 1989. *

PILIPINAS SHELL PETROLEUM CORPORATION, CALTEX

(PHILIPPINES) INC., AND MOBIL OIL PHILIPPINES, INC.,
petitioners, vs. THE COURT OF APPEALS, HON. ESTHER NOBLES BANS,
Presiding Judge, Branch LXXI, Zambales and Olongapo City, and ADRIAN
S. DELA PAZ, respondents.
Remedial Law; Civil Procedure; Filing Fees; The payment of filing fees cannot be
made dependent on the result of the action taken, without entailing tremendous losses
to the government and to the judiciary in particular.—Conversely, nowhere can a
justification be found to convert such payment to something akin to a contingent fee
which would depend on the result of the case. Under the circumstances, the Court
would stand to lose the filing fees should the party be later adjudged to be not
entitled to any claim at all. Filing fees are intended to take care of court expenses in
the handling of cases in terms of cost of supplies, use of equipments, salaries and
fringe benefits of personnel, etc., computed as to man hours used in handling of each
case. The payment of said fees therefore, cannot be made dependent on the result of
the action taken, without entailing tremendous losses to the government and to the
judiciary in particular.
Same; Same; Same; What is subject to adjustment under Rule 141 Sec. 5(a) is
the difference in the filing fee but not the whole
______________

*SECOND DIVISION.
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VOL. 171, APRIL 10, 6
1989 75
Pilipinas Shell Petroleum
Corp. vs. Court of Appeals
amount.—At issue in the trial court, was respondent judge’s Order dated July
11, 1985 ordering private respondent to pay the additional docket fee in the amount
of P945,636.90, but upon motion, the Court reconsidered its Order and allowed the
plaintiff (private respondent herein) to pay the same after the prosecution of the
instant case to be deducted from whatever judgment in damages shall be awarded
by the Court. Relative thereto, there is merit in petitioners’ claim that the third
paragraph of Rule 141, Section 5(a) clearly contemplates a situation where an
amount is alleged or claimed in the complaint but is less or more than what is later
proved. If what is proved is less than what was claimed, then a refund will be made;
if more, additional fees will be exacted. Otherwise stated, what is subject to
adjustment is the difference in the fee and not the whole amount. Such
interpretation would give meaning to the provisions of subject Rule and would
implement instead of defeat its objectives.
Same; Same; Same; Same; The provision of Sec. 16(3) Rule 141 that the legal
fees shall be a lien on the monetary or property judgment rendered in favor of a
pauper litigant does not apply in the instant case, there being no showing that private
respondent is litigating as a pauper.—Corollary thereto, the third paragraph of
Section 16, Rule 141 which states that: “The legal fees shall be a lien on the
monetary or property judgment rendered in favor of the pauper-litigant.” cannot be
applied to the case at bar because said provision specifically refers to pauper-
litigants, and nowhere in the records was it shown that private respondent is
litigating as a pauper and therefore exempted from the payment of court fees.
Same; Same; Same; Same; Same; Judgments; If a 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 therefore, shall constitute a lien on the judgment.—
Finally, in a similar case, although the trial court was held to have acquired
jurisdiction over the case despite the payment of insufficient fees, the Court ruled
that the proceedings in the Civil Case may be resumed, after all of the lawfull fees
shall have paid. (Magaspi, v. Ramolete, 115 SCRA 205 [1982]). The Magaspi ruling
was overturned in Manchester Development Corporation v. Court of Appeals, 149
SCRA 562 (1987) which held that non-payment of the correct docket fee was
jurisdictional. Subsequently however, the Manchester doctrine was relaxed in San
Insurance Office Ltd. v. Hon. Maximiano Asuncion (G.R. Nos. 79937-38),
promulgated February 13, 1989, where the Court en banc, thru Mr. Justice Emilio
Gancayco, laid down the
676
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76 REPORTS ANNOTATED
Pilipinas Shell Petroleum
Corp. vs. Court of Appeals
following rules: “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.”

PETITION for certiorari with preliminary injunction to review the decision of

the Court of Appeals. Griño-Aquino, J.

The facts are stated in the opinion of the Court.

Siguion Reyna, Montecillo & Ongsiako for petitioners.

PARAS, J.:
This is a petition for certiorari under Section 1, Rule 65 of the Rules of Court,
with preliminary injunction, seeking the annulment or setting aside of the
decision of respondent Court of Appeals promulgated on September 4, 1986
**

dismissing petitioners’ petition for certiorari; and its resolution of September

26, 1985 denying petitioners’ motion for reconsideration of the
aforementioned decision.
The facts of the case are as follows:
Private respondent Adrian dela Paz is a holder of Letters
______________

** Penned by Justice Carolina C. Griño-Aquino, and concurred in by Justices Leonor Ines-Luciano and Emeterio

C. Cui.
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VOL. 171, APRIL 10, 1989 677
Pilipinas Shell Petroleum Corp. vs.
Court of Appeals
Patent No. 14132 issued by the Patent Office on February 27, 1981 for his
alleged invention, Coco-diesel fuel for diesel engines and its manufacture. On
March 7, 1983 private respondent filed a complaint with the Regional Trial
Court of Olongapo City, Branch LXII, for infringement of patent with prayer
for payment of reasonable compensation and for damages against herein
petitioners Pilipinas Shell Petroleum Corporation, Caltex (Phil.), Mobil Oil
Philippines, Inc., and Petrophil Corporation (Rollo, p. 31). There was no
mention in the complaint of the amount of damages being claimed but private
respondent alleged, among others, that the conservative estimate of the
combined gross sales of defendants (petitioners herein and Petrophil
Corporation) of plaintiff’s (private respondent’s herein) invention is
P934,213,780.00 annually computed at the rate of 20 million barrels (volume)
being yearly sold by the marketing arms of defendants at the price of P2.938
per liter (Rollo, p. 35). In the hearing of November 13, 1984 private
respondent estimated the yearly royalty due him from defendants
(petitioners herein and Petrophil Corporation) to be P236,572,350.00 (Rollo,
p. 39).
During the hearing of February 19, 1985, petitioners discovered that
private respondent paid only as filing fee the amount of P252.00 based on his
claim for attorney’s fees in the amount of P200,000.00. Petitioners orally
moved for the dismissal of the complaint for failure of private respondent to
pay the correct filing fee (Rollo, p. 14). The parties filed their respective
memoranda (Rollo, p. 50) with the Solicitor General filing a separate
memorandum (Rollo, p. 45) for defendant Petrophil Corporation.
On July 11, 1985, the Regional Trial Court issued an order denying the
***

motion to dismiss but ordering private respondent to pay the additional

docket fee in the amount of P945,636.90 computed at P4.00 per P1,000.00 in
excess of the first P150,000.00 based on the amount of P236,572,350.00 which
private respondent explicitly averred in his testimony of November 13, 1984
as the amount he seeks to recover (Rollo, p. 54).
 On July 31, 1985, private respondent filed a motion for re-
____________

*** Presided over by Judge Esther Nobles Bans.

678
678 SUPREME COURT
REPORTS ANNOTATED
Pilipinas Shell Petroleum Corp. vs.
Court of Appeals
consideration of the order of the trial court requiring him to pay an additional
docket fee (Rollo, p. 54) which was opposed by petitioners (Rollo, p. 66) and
Petrophil Corporation (Rollo, p. 59). Acting on the motion, on October 30,
1985 the trial court issued an order allowing private respondent to pay the
required additional docket fee after the prosecution of the case, to be
deducted from whatever judgment in damages shall be awarded by the Court
(Rollo, p. 70). The motions for reconsideration filed by petitioners (Rollo, p.
77) and Petrophil Corporation (Rollo, p. 86) were denied by the trial court in
its order of November 18, 1985 (Rollo, p. 92).
On November 14, 1986, petitioners elevated the case to respondent Court
of Appeals through a special civil action for certiorari, under the provisions of
Rule 65 of the Rules of Court, to annul and set aside the orders dated October
30, 1985 and November 18, 1985 of the Regional Trial Court of Olongapo
City, Branch LXXII, with prayer for a restraining order/preliminary
injunction (Rollo, p. 93). Respondent Court dismissed the petition for lack of
merit in its decision promulgated on September 4, 1986 (Rollo, p. 168). The
motion for reconsideration of the decision, filed by petitioners (Rollo, p. 171)
was denied by respondent court in its resolution dated September 26, 1986
(Rollo, p. 320).
Instant petition was filed with the Court on November 6, 1986 (Rollo, p.
11). The Second Division of this Court resolved to issue the temporary
restraining order prayed for in a resolution dated November 17, 1986 (Rollo,
p. 180), which was issued on November 18, 1986, restraining the Judge of the
Regional Trial Court of Olongapo City, Branch LXXII, her agents,
representatives, and/or any person or persons, acting upon her orders or in
her stead, from further proceeding with its Civil Case No. 45-0-83, entitled
“Adrian dela Paz v. Filipinas Shell Petroleum Corporation, et al.” (Rollo, p.
181).
On December 2, 1986, private respondent filed a letter with the Court
addressed to Deputy Court Administrator Ranjo, praying for the lifting of the
temporary restraining order issued by the Court on November 18, 1986
(Rollo, p. 198.)
Private respondent filed his comment on the petition on December 15,
1986 (Rollo, p. 187); petitioners filed their reply to
679
VOL. 171, APRIL 10, 1989 679
Pilipinas Shell Petroleum Corp. vs.
Court of Appeals
comment on January 2, 1987 (Rollo, p. 194). In accordance with the
Resolution of the Court, dated January 7, 1987 (Rollo, p. 197) private
respondent filed his rejoinder on February 12, 1987 (Rollo, p. 236).
Petitioners filed on March 2, 1987 their comment on private respondent’s
letter of December 2, 1986 (Rollo, p. 258) in accordance with the Resolution of
the Court of March 4, 1987 (Rollo, p. 234).
On March 30, 1987, the Court resolved: (a) to give due course to the
petition; and (b) to dispense with the memoranda of the parties. In the same
resolution the Court considered the case submitted for deliberation (Rollo, p.
261).
Meantime, on February 9, 1987 Judge Esther Nobles Bans inhibited
herself voluntarily from further hearing the case due to an alleged verified
letter-complaint of private respondent to the Chief Justice for her
disqualification/inhibition (Rollo, p. 366) and the case was re-raffled to
Branch LXXIII of the Regional Trail Court of Olongapo City, presided over by
Judge Alicia L. Santos (Rollo, p. 365).
The given issues of the petition are as follows:

1. I.Whether or not the trial court can defer the payment of the filing fee
till after judgment although the plaintiff (herein private respondent)
who is not a pauper-litigant, could state the amount of damages
claimed when he filed his complaint; and
2. II.Whether or not Section 5, paragraph A, Rule 141 of the Rules of
Court is applicable to the case at bar.

The main issue in this case is whether or not a party can file a complaint
without specifying the amount of damages he is claiming and as a result
defer the payment of the proper fees until after trial on the merits, in
accordance with the appraisal of the Court.
Under paragraph B No. 11 of the Interim Rules of Court, “x x x If any
demand is for damages in a civil action, the amount thereof must be
specifically alleged.”
In the case at bar, private respondent deliberately omitted stating any
amount of damages (except attorney’s fees), although the same could have
been estimated at the filing of the complaint since he already knew the
figures of the alleged
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680 SUPREME COURT
REPORTS ANNOTATED
Pilipinas Shell Petroleum Corp. vs.
Court of Appeals
sales of the petitioner oil companies including the Petrophil, lending credence
to petitioners’ claim that such omission is deliberate for the purpose of
avoiding the payment of the correct fees (Rollo, p. 19).
As correctly ruled by the Court of Appeals, the Rule applicable to this case
is Section 5(a) of Rule 141 of the Rules of Court. Concededly, that particular
Section 5(a) envisions two kinds of claims, such as: (1) those which are
immediately ascertainable which fall under the first paragraph thereof and
(2) those which could not be immediately ascertained as to the exact amount
and which fall under the third paragraph of the same section.
The first paragraph of said section specifies the amount to be paid
corresponding to the sum claimed, exclusive of interest, of the value of the
property in litigation, or the value of the estate. Under this paragraph,
obviously fall claims capable of exact pecuniary estimation. On the other
hand, the third paragraph covers claims where the exact amount has to be
finally determined by the Court. The third paragraph of the same section
provides:
“In case the value of the property or estate or the sum claimed is less or more in accordance with the
appraisal of the court, the difference of feeshall be refunded or paid as the case may be.” (Italics
supplied)
It will be observed that the above provision clearly contemplates an initial
payment of the filing fees corresponding to the estimated amount of the claim
subject to adjustment as to what later may be proved. Conversely, nowhere
can a justification be found to convert such payment to something akin to a
contingent fee which would depend on the result of the case. Under the
circumstances, the Court would stand to lose the filing fees should the party
be later adjudged to be not entitled to any claim at all.
Filing fees are intended to take care of court expenses in the handling of
cases in terms of cost of supplies, use of equipments, salaries and fringe
benefits of personnel, etc., computed as to man hours used in handling of
each case. The payment of
681
VOL. 171, APRIL 10, 1989 681
Pilipinas Shell Petroleum Corp. vs.
Court of Appeals
said fees therefore, cannot be made dependent on the result of the action
taken, without entailing tremendous losses to the government and to the
judiciary in particular.
In the case at bar, only the amount of P252.00 based on the claim of
attorney’s fees was paid but such is but a part of his enormous claim for
royalties/reasonable compensation, which was not estimated and the
corresponding filing fees were left unpaid.
At issue in the trial court, was respondent judge’s Order dated July 11,
1985 ordering private respondent to pay the additional docket fee in the
amount of P945,636.90, but upon motion, the Court reconsidered its Order
and allowed the plaintiff (private respondent herein) to pay the same after
the prosecution of the instant case to be deducted from whatever judgment in
damages shall be awarded by the Court.
Relative thereto, there is merit in petitioners’ claim that the third
paragraph of Rule 141, Section 5(a) clearly contemplates a situation where an
amount is alleged or claimed in the complaint but is less or more than what is
later proved. If what is proved is less than what was claimed, then a refund
will be made; if more, additional fees will be exacted. Otherwise stated, what
is subject to adjustment is the differencein the fee and not the whole amount.
Such interpretation would give meaning to the provisions of subject Rule
and would implement instead of defeat its objectives.
Corollary thereto, the third paragraph of Section 16, Rule 141 which states
that:
“The legal fees shall be a lien on the monetary or property judgment rendered in favor of the pauper-
litigant.”
cannot be applied to the case at bar because said provision specifically refers
to pauper-litigants, and nowhere in the records was it shown that private
respondent is litigating as a pauper and therefore exempted from the
payment of court fees.
Neither is the provision under Section 1 of Rule 111 applicable. The second
paragraph of Section 1 of Rule 111 which
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682 SUPREME COURT
REPORTS ANNOTATED
Pilipinas Shell Petroleum Corp. vs.
Court of Appeals
provides for the institution of criminal and civil actions, reads:
“Where the offended party seeks to enforce civil liability against the accused by way of actual, moral,
nominal, temperate or exemplary damages, the filing fees for such civil action as provided in these
Rules shall first be paid to the Clerk of Court where the criminal case is filed. In all other cases, the
filing fees corresponding to the civil liability awarded by the Court shall constitute a first lien on the
judgment award and no payment by execution or otherwise may be made to the offended party without
his first paying the amount of such filing fees to the Clerk of Court.”
The instant case is not a criminal action with the civil action for the recovery
of civil liability impliedly instituted with it. On the contrary it is a purely civil
action for the recovery of a sum of money in the form of reasonable
compensation or royalty payments and/or damages.
Finally, in a similar case, although the trial court was held to have
acquired jurisdiction over the case despite the payment of insufficient fees,
the Court ruled that the proceedings in the Civil Case may be resumed, after
all of the lawful fees shall have been paid. (Magaspi v. Ramolete, 115 SCRA
205 [1982]).
The Magaspi ruling was overturned in Manchester Development
Corporation v. Court of Appeals, 149 SCRA 562 (1987) which held that non-
payment of the correct docket fee was jurisdictional.
Subsequently however, the Manchester doctrine was relaxed in San
Insurance Office Ltd. v. Hon. Maximiano Asuncion (G.R. Nos. 79937-38),
promulgated February 13, 1989, where the Court en banc, thru Mr. Justice
Emilio Gancayco, laid down the following rules:

1. “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.

683
VOL. 171, APRIL 10, 1989 683
Pilipinas Shell Petroleum Corp. vs.
Court of Appeals

1. “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.
2. “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.”

Private respondent’s right of free access to the courts is not denied by the
correct application of the provisions of Rule 141, Section 5(a) in the instant
case, because he has a remedy under the same Rule, where he can apply for
the privilege to litigate his case as pauper if he is so entitled.
PREMISES CONSIDERED, (1) the decision of the Court of Appeals is
REVERSED and SET ASIDE; (2) the order of respondent Judge dated July
11, 1985 is REINSTATED; (3) the case is REMANDED to the trial court; (4)
the proceedings in Civil Case No. 45-0-88 are ordered RESUMED upon
payment of all lawful fees (as assessed by the Clerk of Court of said Court) by
private respondent or upon exemption from payment thereof upon proper
application to litigate as pauper; and (5) the temporary restraining order
issued by the Court on November 18, 1986 will be deemed LIFTED should
Order No. 4 be complied with.
SO ORDERED.
Melencio-Herrera(Chairman), Padilla and Sarmiento, JJ., concur.
 Regalado, J., No part; did not participate in the deliberations.
Decision reversed and set aside.
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684 SUPREME COURT
REPORTS ANNOTATED
Pilipinas Shell Petroleum Corp. vs.
Court of Appeals
Note.—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. (San
Insurance Office vs. Hon. Asuncion, G.R. Nos. 79937-38: February 13, 1989.)

——o0o——

685