G.R. No.
153690 – DAVID LU v. PATERNO LU YM, SR.,
PATERNO LU YM, JR., VICTOR LU YM, ET. AL. & LUYM DEVELOPMENT
CORPORATION.
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G.R. No.
157381 - PATERNO
LU YM, SR., PATERNO LU YM, JR., VICTOR LU YM, JOHN LU YM, KELLY LU YM, and LUDO
& LUYM DEVELOPMENT CORPORATION v. DAVID LU.
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G.R. No.
170889 - JOHN LU
YM and LUDO & LUYM DEVELOPMENT CORPORATION v. THE HON. COURT OF APPEALS OF
CEBU CITY (former Twentieth Division),
DAVID LU, ROSA GO, SILVANO LUDO & CL CORPORATION.
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CONCURRING
OPINION
BERSAMIN, J.:
I concur with Associate Justice Conchita Carpio Morales,
whose lucid opinion for the Majority presents a most thorough consideration and
apt resolution of the issues.
In writing this concurring opinion, I only desire to
express some thoughts, hoping to contribute to the elucidation of decisive matters.
G.R. No. 153690
On
WHEREFORE,
based on the foregoing premises, it is respectfully prayed that this
Honorable Court rule in favor of the Plaintiffs, as follows:
1. Declare null and void the
issuance of 600,000 unsubscribed and unissued shares to Defendants Lu Ym father
and sons and their spouses, children and holding companies, for a price of only
one-eighteenth of their real value, as having been done in breach of directors’
fiduciary duty to stockholders, in violation of Plaintiffs’ minority
stockholders’ rights, and in unjust enrichment of the Defendants,
majority/controlling
stockholders/directors, at the expense of their cousins, the other
stockholders.
2. Order the
dissolution of Defendant Ludo and LuYm Development Corporation, in order to
protect the rights and redress the injuries of Plaintiffs;
3. During
the pendency of the instant case, order the appointment of a receiver pendente lite for LuDo and LuYm
Development Corporation.
Such other reliefs as may be just and equitable
on the premises are likewise prayed for.[1]
Defendants Lu Ym father and sons filed a motion to dismiss, citing as grounds that only one of the
plaintiffs had signed the complaint, thereby violating the rule against forum
shopping; and that the parties did not exert earnest efforts towards a
compromise.
The RTC denied the motion to
dismiss, holding that the signature of one of the plaintiffs was a
substantial compliance.
On
Lu Ym father and sons then filed a petition for certiorari in the Court of Appeals (CA) to assail the denial of
their motion to dismiss and the
placing of LLDC under receivership (C.A.-G.R. SP No. 64154). However, the CA
dismissed the petition because only two petitioners had signed the verification
and the certification against forum shopping.
Lu Ym father and sons refiled the petition (C.A.-G.R. SP No. 64523).
Although initially dismissing the refiled petition upon finding no grave abuse
of discretion on the part of the RTC in denying the motion to dismiss and because of the prematurity of the challenge
against the receivership (due to the pendency of the petitioners’ motion for reconsideration thereon in
the RTC), the CA reconsidered and reinstated the petition upon the petitioners’
motion for reconsideration. The
petitioners later presented a supplement to their petition.
On
After the CA denied their motion
for reconsideration, David Lu, et al.
elevated the decision of the CA to this Court (G.R. No. 153690).
G.R. No. 157381
In the meanwhile, in Civil Case No.
CEB-25502, Lu Ym father and sons sought the inhibition of the Presiding Judge
of Branch 5 of the RTC. After the inhibition was granted on
On
On
Dissatisfied with the CA’s decision, Lu Ym father and sons appealed to
this Court (G.R. No. 157381).
G.R. No. 170889
On
The amended complaint contained the following reliefs, viz:
WHEREFORE, based on the foregoing premises, it is
respectfully prayed that this Honorable Court rule in favor of the Plaintiffs,
as follows:
1. Declare null and void the
issuance of 600.000 unsubscribed and
unissued shares of the defendant
corporation to Defendants Lu Ym father and sons and their spouses, children,
and holding companies, for a price of one-eighteenth of their real value, for
being inequitable, having been done in breach of director’s fiduciary duty to
stockholders, in violation of Plaintiffs’ minority stockholders’ rights, and in
unjust enrichment of the Defendants, majority controlling
stockholders/directors, at the expense of their cousins, the other
stockholders.
2. Order the dissolution of Defendant
Ludo and Luym Development Corporation, in order to protect the rights and
redress the injuries of Plaintiffs;
3. Order the creation of a
management committee pendente lite,
and order receiver Luis Cañete to turn over all assets and records to the
management committee.
Such other relief as may be just and equitable on
the premises are likewise prayed for.[3]
On
On
Lu Ym father and sons timely appealed to the CA (C.A.-G.R. CV No.
81163), where they applied for a TRO to defeat the executory nature of the RTC
decision. David Lu, et al. opposed
the application for TRO.
Although it issued a TRO, the CA denied the application for a writ of
preliminary injunction on
On
Dissatisfied, Lu Ym father and sons initiated a special action for certiorari and prohibition (G.R. No.
170889).
Decision dated
The Court consolidated G.R. No. 153690, G.R. No. 157381 and G.R. No.
170889.
On
WHEREFORE,
premises considered, the petitions in G.R. Nos. 153690 and 157381 are DENIED
for being moot and academic; while the petition in G.R. No. 170889 is DISMISSED
for lack of merit. Consequently, the Status Quo Order dated
The
Court of Appeals is DIRECTED to proceed with CA-G.R. CV No. 81163 and to
resolve the same with dispatch.
SO
ORDERED.
In the main, the Court (Third Division) ruled that it could not
dismiss the initial complaint on the ground of lack of jurisdiction based on
the insufficiency of the docket fees because: (a) the suit instituted in the RTC was an action whose subject
matter was not capable of pecuniary estimation, for which the correct docket
fees had been paid; (b) John Lu and
LLDC were estopped from questioning the jurisdiction of the RTC by their active
participation in the case and by their having belatedly raised the issue of
docket fees in the CA through their motion
for reconsideration; and (c) on
the assumption that the docket fees were insufficient, the insufficiency was
the Clerk of Court’s mistake and the deficiency might be considered as a lien
on the judgment.[5]
Resolution dated
Through its Resolution dated August 4, 2009,[6] however, the
Court (Special Third Division), by a vote of 4 to 1,[7] executed a complete turnabout (upon a “deeper reflection”), and declared that
the RTC did not acquire jurisdiction for failure of David Lu, et al. to pay the correct amount of
docket fees, viz:
WHEREFORE, in view of the foregoing, the Motion for
Reconsideration filed by John Lu Ym and Ludo & LuYm Development Corporation
is GRANTED. The Decision of this Court dated
All interlocutory matters challenged in these consolidated
petitions are DENIED for being moot and academic.
SO ORDERED.[8]
The Majority in the Special Third Division held that the extent of the
damage or injury allegedly suffered by David Lu, et al. could be characterized as capable of pecuniary estimation;
that the 600,000 shares of stock were properties in litigation, whose definite
value should be the basis for computing the docket fees; and that the RTC did
not acquire jurisdiction over the action without their payment of the correct
amount of docket fees.[9] In addition, they noted John Lu and LLCD’s argument that David Lu, et al. were guilty of fraud by failing to mention any real property
in their complaint despite annotating the notices of lis pendens on LLCD’s properties; that their doing so reflected
their objective of recovering real property, indicating the nature of the case
as a real action affecting title to or the right to possession of real
properties; that their silence or inaction to point this out to the Clerk of
Court who had computed the docket fees constituted fraud; that Lu Ym father and
sons were not estopped from challenging the RTC’s jurisdiction because they had
raised the insufficiency of the docket fees — albeit with the OCA and not
directly with the RTC — before the RTC
rendered its decision; and that the erroneous manner of their challenge as to
the sufficiency of the docket fees should not be deemed a waiver of their right
to assail the jurisdiction of the RTC.
In her Dissent, Justice Carpio Morales reiterated the wisdom and
soundness of the Decision promulgated on
David Lu, et al.’s Motion for
Reconsideration and Motion to Refer Resolution to the Court En Banc was
denied with finality on
Matters for Resolution
Undeterred, David Lu, et al.
have filed the following, to wit: (a)
Second Motion for Reconsideration and
Motion to Refer Resolution to the Court En Banc; (b) Amended Second Motion for
Reconsideration and Motion to Refer
Resolution to the Court En Banc; (c)
Motion for Leave to File Motion for
Clarification, Amended Second Motion for Reconsideration and Motion to Refer
Resolution to the Court En Banc; (d)
Motion for Clarification, and Supplement to the Second Motion for Reconsideration
with Motion to Dismiss.
Submissions
I humbly submit the following in
support of my concurrence with the Majority.
A.
Subject matter of action of David Lu, et al.
is not capable of pecuniary estimation;
Hence, filing fee actually paid was correct
The decisive question is whether SRC
Case No. 021-CEB could
overcome the challenge from Lu Ym father and sons to the effect that
jurisdiction over the claim did not vest in the RTC due to the failure of David
Lu, et al., as plaintiffs, to pay the
correct amount of docket fees at the time of the filing of their complaint. The
resolution of the question depends on the correct determination of whether or
not the action of David Lu, et al.
was one whose subject matter was capable of pecuniary estimation.
To me, the Decision promulgated on August 26, 2008 soundly found and
correctly held that because David Lu, et
al. had “paid
the docket fees for an action the subject of which was incapable of pecuniary
estimation, as computed by the Clerk of Court, the (RTC) validly acquired
jurisdiction over the case.” The following excerpts of
pertinent portions of the Decision promulgated on
A court
acquires jurisdiction over a case only upon the payment of the prescribed fees.
The importance of filing fees cannot be gainsaid for these are intended to take
care of court expenses in the handling of cases in terms of costs of supplies,
use of equipment, salaries and fringe benefits of personnel, and others,
computed as to man-hours used in the handling of each case. Hence, the non-payment or insufficient
payment of docket fees can entail tremendous losses to the government in
general and to the judiciary in particular.
In the instant case, however,
we cannot grant the dismissal prayed for because of the following reasons: First,
the case instituted before the RTC is one incapable of pecuniary estimation.
Hence, the correct docket fees were paid. Second,
John and LLDC are estopped from questioning the jurisdiction of the trial court
because of their active participation in the proceedings below, and because the
issue of payment of insufficient docket fees had been belatedly raised before
the Court of Appeals, i.e., only in their
motion for reconsideration. Lastly,
assuming that the docket fees paid were truly inadequate, the mistake was
committed by the Clerk of Court who assessed the same and not imputable to
David; and as to the deficiency, if any, the same may instead be considered a
lien on the judgment that may thereafter be rendered.
The Court had, in the past,
laid down the test in determining whether the subject matter of an action is
incapable of pecuniary estimation by ascertaining the nature of the principal
action or remedy sought. If the action is primarily for recovery of a sum of
money, the claim is considered capable of pecuniary estimation. However, where
the basic issue is something other than the right to recover a sum of money,
the money claim being only incidental to or merely a consequence of, the
principal relief sought, the action is incapable of pecuniary estimation.
In the current controversy, the
main purpose of the complaint filed before the RTC was the annulment of the
issuance of the 600,000 LLDC shares of stocks because they had been allegedly
issued for less than their par value. Thus, David sought the dissolution of the
corporation and the appointment of receivers/management committee. To be sure,
the annulment of the shares, the dissolution of the corporation and the
appointment of receivers/management committee are actions which do not consist
in the recovery of a sum of money. If, in the end, a sum of money or real
property would be recovered, it would simply be the consequence of such principal
action. Therefore, the case before the RTC was incapable of pecuniary estimation. Accordingly, John’s and LLDC’s
contention cannot be sustained. And since David paid the docket fees for an
action the subject of which was incapable of pecuniary estimation, as computed
by the Clerk of Court, the trial court validly acquired jurisdiction over the
case.
The aforequoted rationalization is backstopped by long-standing
jurisprudence, including one contributed in 1968 by the revered Justice J.B.L.
Reyes in Lapitan v. Scandia, Inc.:[10]
xxx [I]n determining whether an action is one the
subject matter of which is not capable of pecuniary estimation, this Court has
adopted the criterion of first ascertaining the nature of the principal action
or remedy sought. If it is primarily for the recovery of a sum of money, the
claim is considered capable of pecuniary estimation, and whether jurisdiction
is in the municipal courts or in instance would depend on the amount of the
claim. However, where the basic issue is something other than the right to
recover a sum of money, where the money claim is purely incidental to, or a
consequence of, the principal relief sought, this Court has considered such
actions where the subject of the litigation may not be estimated in terms of
money, and are cognizable exclusively by courts of first instance. xxx
An action for the determination of the propriety or legality of a
particular act is unquestionably one whose subject matter is not capable of
pecuniary estimation, notwithstanding that some relief with monetary value is
eventually awarded (e.g., in cases of
support, or of recovery of the price, or of return of the proceeds), or that
some property whose value may be estimated is involved. In Russell v. Vestil,[11] the Court cited actions for “specific performance, support, or
foreclosure of mortgage or annulment of judgment, also actions questioning the
validity of a mortgage, annulling a deed of sale or conveyance and to recover
the price paid, and for rescission, which is a counterpart of specific
performance” as illustrative examples
of actions whose subject matter is not capable of pecuniary estimation.
In SRC Case No. 021-CEB, the original and amended complaints show that the
main objectives were twofold: one, to
declare null and void the 600,000 shares issued for less than their real value,
and two, to dissolve the corporation.
Nowhere in their complaints did David Lu, et
al. assert their entitlement to the 600,000 shares, or to the properties
affected by the annotation of the notices of lis pendens. The mention of the value of the disputed shares was
only to spotlight the inequitable price at which the defendants had effected
the transfer. Rightly did the Decision of
To suggest at all that David Lu, et
al. were seeking to recover specific properties of LLDC through Civil Case No. CEB-25502 was even absolutely
fallacious. Under the trust fund doctrine,
the capital stock, properties, and other assets of a corporation are regarded
as held in trust for the corporate
creditors, who, being preferred in the distribution of the corporate assets,
must first be paid before any corporate assets may be distributed among the
stockholders.[13] In the event of the dissolution of LLDC, therefore,
David Lu, et al. would get only the
value of their minority number of shares, not the value of the 600,000 shares.
Indeed, a basic concept in corporate law is that a shareholder’s interest in
corporate property, if it exists at all, is indirect, contingent, remote,
conjectural, consequential, and collateral. A share of stock, although
representing a proportionate or aliquot interest in the properties of
the corporation, does not vest its holder with any legal right or title to any
of the properties, such holder’s interest in the properties being equitable or
beneficial in nature. A shareholder is in no legal sense the owner of corporate
properties, which are owned by the corporation as a distinct legal person.[14]
Neither did the plainly erroneous and irrelevant annotation of the
notice of lis pendens in the land
records of LLCD’s real properties estop David Lu, et al. from insisting that their action was one whose subject
matter was not capable of pecuniary estimation. Although the annotation was
proper only for an action affecting title to or right to possession of real
properties, it has been an axiom of remedial law that the allegations of the
complaint determined the nature of the action. Also, lis pendens is a Latin phrase that means, literally, a pending
suit. Accordingly, a notice of lis
pendens is nothing more than a warning to the whole world that anyone who
buys the property in litis does so at
his own risk and subject to the outcome of the litigation; its purpose is to
save innocent third persons from any involvement in any future litigation
concerning the property.[15]
B
Even if correct amount of filing fees were not
paid,
RTC did not thereby automatically lose
jurisdiction
It is not disputed that the amount paid by David Lu, et al. was the correct docket fees for
an action whose subject matter was not capable of pecuniary estimation.
Nonetheless, even assuming, for the sake of argument, that David Lu, et al. did not pay the correct amount of docket fees at the
time of filing the original complaint, as Lu Ym father and sons posited, the
RTC did not automatically lose jurisdiction over the complaint.
The prevailing rule is that if the correct amount of docket fees are
not paid at the time of filing, the
trial court still acquires jurisdiction upon full payment of the fees within a reasonable time as the court
may grant, barring prescription.[16] The “prescriptive period” that bars the payment
of the docket fees refers to the period in which a specific action must be
filed, so that in every case the docket fees must be paid before the lapse of
the prescriptive period, as provided in the applicable laws, particularly
Chapter 3, Title V, Book III, of the Civil
Code, the principal law on prescription of actions.[17]
In Rivera v. Del Rosario,[18] the Court,
resolving the issue of the failure to pay the correct amount of docket fees due
to the inadequate assessment by the Clerk of Court, ruled that jurisdiction
over the complaint was still validly acquired upon the full payment of the
docket fees assessed by the Clerk of Court. Relying on Sun Insurance Office, Ltd., (SIOL) v. Asuncion,[19] the Court opined that the filing of the
complaint or appropriate initiatory pleading and the payment of the prescribed docket fees vested a trial court
with jurisdiction over the subject matter or nature of the action, and although
the docket fees paid were insufficient on
account of the amount of the claim, the Clerk of Court of the trial court
involved or his duly authorized deputy retained the responsibility of making a deficiency assessment, and the party
filing the action could be required to pay the deficiency, without jurisdiction
being automatically lost.
Even where the Clerk of Court fails to make a deficiency assessment, and the deficiency is not paid as a result,
the trial court nonetheless continues
to have jurisdiction over the complaint, unless the party liable is guilty of a
fraud in that regard, considering that the deficiency will be collected as a
fee in lien within the contemplation of Section 2,[20] Rule 141 (as revised by A.M. No. 00-2-01-SC).[21] The reason
is that to penalize the party for the omission of the Clerk of Court is not
fair if the party has acted in good faith.
ACCORDINGLY, I vote to reinstate the Decision promulgated on
LUCAS
P. BERSAMIN
Associate Justice
[1] Rollo, G.R. No. 170889, pp. 84-85.
[2] Judge Dicdican of Branch 11 meanwhile inhibited
himself, and the case was again re-raffled to Branch 12 of the RTC in
[3] Rollo (G.R. No. 153690), pp. 689-690.
[4] Penned by Associate Justice Antonio Eduardo B.
Nachura, and concurred in by Associate Justice Consuelo Ynares-Santiago
(retired), Associate Justice Conchita Carpio-Morales, Associate Justice Minita
V. Chico-Nazario (retired), and Associate Justice Ruben T. Reyes (retired).
[5] G.R. No. 153690,
[6] G.R. No. 153690,
[7] The majority included Associate Justice Nachura (ponente), Associate Justice
Ynares-Santiago, Associate Justice Chico-Nazario, and Associate Justice
Presbitero J. Velasco, Jr. The lone dissenter was Associate Justice Carpio
Morales.
[8] Note 6, at p. 95.
[9] G.R. No. 153690,
[10] No. L-24668,
[11] G.R. No. 119347,
[12] G.R. No. 153690,
[13] Boman Environmental Development Corporation
v. Court of Appeals,
G.R. No. L-77860
[14] Magsaysay-Labrador v. Court of Appeals, G.R. No. 58168, December 19, 1989, 180 SCRA 266, 271-272.
[15] Lim v. Vera Cruz, G.R. No. 143646,
[16] Ballatan v. Court of
Appeals, G.R. No. 125683, March 2, 1999, 304 SCRA 34; citing Tacay v.
RTC of Tagum, Davao del Norte, G.R. No. 88075-77, December 20, 1989, 180
SCRA 433, 444; Sun Insurance Office, Ltd. (SIOL) v. Asuncion, G.R. Nos. 79937-38, February 13, 1989, 170
SCRA 274, 285.
[17] Central Bank of the Philippines v. Court of
Appeals, G.R. No. 88353, May 8, 1992, 208 SCRA 652; Pantranco
North Express, Inc. v. Court of Appeals, G.R. No. 105180, July 5, 1993, 224
SCRA 477.
[18] G.R. No. 144934,
[19] G.R. Nos. 79937-38,
[20] Section 2. Fees in lien. – Where the court in its
final judgment awards a claim not alleged, or a relief different from, or more
than that claimed in the pleading, the party concerned shall pay the additional
fees which shall constitute a lien on the judgment in satisfaction of said
lien. The clerk of court shall assess and collect the corresponding fees. (n)
[21] Resolution Amending Rule 141 (Legal Fees) of the
Rules of Court; effective