Saturday, February 25, 2012

Ruby Shelter Builders (RSB) vs. Formaran

Facts:  RSB obtained a P95M loan in from Tan and Obiedo, secured by REM over five parcels of land located in Naga City. RSB failed to pay the loan despite being granted several extensions. It was agreed that RSB should execute deeds of absolute sale over the five parcel of lands in lieu of payment (i.e. dacion en pago).

Without payment having been made by RSB, Tan and Obiedo presented the Deeds of Absolute Sale, as a result of which, they were able to secure TCTs over the five parcels of land in their names.

RSB filed before the RTC a Complaint against respondents Tan and Obiedo for declaration of nullity of deeds of sales and damages. RSB’s causes of actions were: (a) pactum commissorium; and (b) bad faith by Tan and Obediedo.

Upon filing its Complaint with the RTC, RSB paid the sum of P13,644.25 for docket and other legal fees, as assessed by the Office of the Clerk of Court. The Clerk of Court initially considered the case as an action incapable of pecuniary estimation and computed the docket and other legal fees due thereon according to Section 7(b)(1), Rule 141 of the Rules of Court.

Tan filed before the RTC an Omnibus Motion in which he contended that the civil case involved real properties, the docket fees for which should be computed in accordance with Section 7(a), not Section 7(b)(1), of Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC which took effect on 16 August 2004. Since petitioner did not pay the appropriate docket fees for the civil case, the RTC did not acquire jurisdiction over the said case. Hence, respondent Tan asked the RTC to issue an order requiring RSB to pay the correct and accurate docket fees and should RSB fail to do so, to deny and dismiss the case.

RTC ordered RSB to pay additional filing fee and Tan was also ordered to pay docket and filing fees on his counterclaim.

CA upheld RTC, saying that the objectives of RSB in filing the complaint were to cancel the deeds of sale and ultimately, to recover possession of the same. It is therefore a real action. Consequently, the additional docket fees that must be paid cannot be assessed in accordance with Section 7(b). As a real action, Section 7(a) must be applied in the assessment and payment of the proper docket fee.

RTC, instead of dismissing outright RSB’s Complaint, granted RSB time to pay the additional docket fees. Despite the seeming munificence of the RTC, petitioner refused to pay the additional docket fees assessed against it, believing that it had already paid the correct amount before, pursuant to Section 7(b)(1), Rule 141 of the Rules of Court, as amended.

Issue: For the purposes of paying the correct amount of docket fees, whether or not the annulment of deed of sale involving a real property is incapable of pecuniary estimation. 

Held: No. Case is a real action.

After Tan and Obiedo had the Deeds of Absolute Sale presented to the Register of Deeds, they were already issued TCTs over the real properties in question, in their own names. No matter how fastidiously RSB attempts to conceal them, the allegations and reliefs it sought in its Complaint appears to be ultimately a real action, involving as they do the recovery by RSM of its title to and possession of the five parcels of land from Tan and Obiedo.

While it is true that RSB does not directly seek the recovery of title or possession of the property in question, his action for annulment of sale and his claim for damages are closely intertwined with the issue of ownership of the building which, under the law, is considered immovable property, the recovery of which is RSB's primary objective. The prevalent doctrine is that an action for the annulment or rescission of a sale of real property does not operate to efface the fundamental and prime objective and nature of the case, which is to recover said real property. It is a real action.

Considering that the complaint is a real action, the Rule requires that "the assessed value of the property, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees.

A real action indisputably involves real property. The docket fees for a real action would still be determined in accordance with the value of the real property involved therein; the only difference is in what constitutes the acceptable value. In computing the docket fees for cases involving real properties, the courts, instead of relying on the assessed or estimated value, would now be using the fair market value of the real properties (as stated in the Tax Declaration or the Zonal Valuation of the Bureau of Internal Revenue, whichever is higher) or, in the absence thereof, the stated value of the same.

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