Civil Procedure Notes Compiled University of San Carlos College of Law 38

CIVIL PROCEDURE NOTES COMPILED UNIVERSITY OF SAN CARLOS COLLEGE OF LAW
38
plaintiff amended the complaint and paid the balance of the docket fees.
ISSUE: Whether or not the subsequent amendment cures the defect?
HELD: No, the defect is incurable. Thus, the action has to be dismissed. The court
acquires no jurisdiction over the case. The remedy is to re-file the complaint and pay
again the complete amount of the docket fee. The prior payment made is forfeited in as
much as the defect in the first complaint is incurable.
So based on the MANCHESTER ruling, you cannot cure the defect by merely amending
the complaint.
However, the SC, after reflecting on what it said in the case of MANCHESTER, realized
the harshness of their decision. This Manchester ruling was relaxed in the subsequent
case of SUN INSURANCE OFFICE which is now the governing law:
SUN INSURANCE OFFICE LTD. vs. COURT OF APPEALS – 170 SCRA 274 [1989]
HELD: Thus, the Court rules 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
therefore 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.
Payment of docket fee and counterclaims

Second rule:
“The same rule applies to permissive counterclaims…”
Re Compulsory Counterclaim
Rule 141 on Legal Fees was revised effective August 26, 2004 by AM No. 04-2-04-SC
and the revision includes the payment of docket fees not only for permissive
counterclaim but also for compulsory counterclaims. But the SC suspended the
enforcement of the new rates of legal fees under Rule 141 effective September 21,
2004, with respect to compulsory counterclaims, among others. It did not suspend the
imposition of legal fees.
However, in Korea Technologies Co. Ltd. Vs. Lerma, 542 SCRA 1, January 7, 2008, the
Court said:
“On July 17, 1998, at the time PGSMC filed its Answer incorporating its counterclaims
against KOGIES, it was not liable to pay filing fees for said counterclaim being
compulsory in nature. We stress, however, that effective August 16, 2004, under Sec. 7
of Rule 141, as amended by AM No. 04-2-04-SC, docket fees are now required to be
paid in compulsory counterclaim or cross claims.”
And the third rule laid down in Sun Insurance:
If the judgment awards a claim not specified in the pleadings, the filing fee therefor shall
be a lien in the judgment. It shall be the responsibility of the clerk of Court or his duly-
authorized deputy to enforce the lien, assess and collect the additional fee.
Q: When can this possibly happen?
A: That can happen for example if I ask for damages. A man was hospitalized because
of physical injuries. While still in the hospital he filed an action for damages and based
the amount of damages on the current billing but alleged that he continues to incur
expenses as may be determined in the course of trial. He paid the docket fee
corresponding to the amount mentioned. After trial he was able to establish expenses in
the sum of P50,000.00.
Q: Can the court award the P 50,000?
A: Yes, because the additional expenses came only after the filing of the case. The
additional docket fee will constitute a lien on the award.
The Sun Insurance is a leading case on docket fee. It was followed with a third case in
December 1989 which further clarified the SUN INSURANCE ruling. This is the case of
TACAY vs. RTC OF TAGUM, DAVAO DEL NORTE - 180 SCRA 433 [1989]
NOTE: When this case was filed, there was no SUN INSURANCE decision yet. The
guiding rule was still MANCHESTER. But while this was pending the SUN INSURANCE
was already out.

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CIVIL PROCEDURE NOTES COMPILED UNIVERSITY OF SAN CARLOS COLLEGE OF LAW

Payment of docket fee and counterclaims

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