G.R. No. 192649 ; June 22, 2011
HOME GUARANTY CORPORATION, Petitioner, vs. R-II BUILDERS INC. and NATIONAL HOUSING AUTHORITY, Respondents.

FACTS

Respondent R-II Builders Inc. (R-II Builders) filed a complaint primarily seeking the nullification of a Deed of Assignment and Conveyance (DAC) transferring an Asset Pool in favor of petitioner Home Guaranty Corporation (HGC). The complaint also prayed for the transfer of possession and/or control of the properties in the Asset Pool. The complaint was initially raffled to Branch 24 of the Regional Trial Court (RTC) of Manila, a designated Special Commercial Court (SCC). Branch 24, after a preliminary hearing, determined the case did not involve an intra-corporate dispute and ordered its re-raffle to Branch 22 of the same court. R-II Builders paid docket fees corresponding to an action incapable of pecuniary estimation. Branch 22 later determined the case was a real action and directed R-II Builders to pay the correct docket fees based on the assessed value of the real properties. R-II Builders withdrew its Amended and Supplemental Complaint and filed a Second Amended Complaint, deleting causes of action for accounting and conveyance but praying for its appointment as Receiver of the Asset Pool properties. The Supreme Court, in a Decision dated March 9, 2011, ruled that the Manila RTC had no jurisdiction due to improper raffle to an SCC and non-payment of correct docket fees. R-II Builders filed a motion for reconsideration.

ISSUE

1. Whether the RTC of Manila, Branch 22, acquired jurisdiction over the case despite the initial raffle to Branch 24 (an SCC) which had no authority over the non-intra-corporate case.
2. Whether R-II Builders paid the correct docket fees.

RULING

The Supreme Court DENIED the motion for reconsideration with finality.
1. On Jurisdiction: The Court held that Branch 24 of the Manila RTC, as an SCC, had no jurisdiction over the case since it was not an intra-corporate dispute. Citing precedents (Atwel v. Concepcion Progressive Association, Inc. and Reyes v. Hon. Regional Trial Court of Makati, Branch 142), the Court ruled that the proper action for Branch 24 was to dismiss the complaint for lack of jurisdiction, not to order its re-raffle. Therefore, the subsequent assumption of jurisdiction by Branch 22 was invalid.
2. On Docket Fees: The Court ruled the case was a real action because the complaints (original, Amended and Supplemental, and Second Amended) sought not only nullification of the DAC but, more importantly, the transfer of possession and control of the real properties comprising the Asset Pool. R-II Builders itself admitted the case was a real action in its opposition to HGC’s motion to dismiss. Following the criterion established in De Leon v. Court of Appeals and applied in Serrano v. Delica and Ruby Shelter Builders and Realty Development Corporation v. Hon. Pablo C. Formaran, the nature of the principal relief sought determines the action’s classification. Since the reliefs involved title to or possession of real property, it was a real action. Consequently, the correct docket fees should have been computed based on the assessed value of the properties. R-II Builders’ payment of fees for an action incapable of pecuniary estimation was insufficient. The Court found bad faith in R-II Builders’ evasion of the directive to pay correct fees, as seen in its withdrawal of the Amended Complaint and filing of a Second Amended Complaint still aimed at controlling the properties through a receivership. Applying the Manchester Development Corporation v. Court of Appeals rule, payment of the prescribed docket fee is mandatory and jurisdictional, and the exception for lack of intent to defraud was inapplicable due to R-II Builders’ evident bad faith. The Court also emphasized the public interest involved, as the Asset Pool comprised government properties used for housing programs.
Thus, the RTC of Manila did not acquire jurisdiction over the case due to the initial improper raffle and the failure of R-II Builders to pay the correct docket fees.