G.R. No. 204970 . February 1, 2016.
SPOUSES CLAUDIO and CARMENCITA TRAYVILLA, Petitioners vs. BERNARDO SEJAS and JUVY PAGLINAWAN, represented by JESSIE PAGLINAWAN, Respondents.

FACTS

Petitioners Spouses Trayvilla filed a complaint against respondent Bernardo Sejas for specific performance and damages. They alleged that Sejas sold a parcel of land to them in 1982 via a private handwritten document, after which they took possession, built a house, and resided thereon. They prayed that Sejas be ordered to execute a final deed of sale. Later, they filed an Amended Complaint impleading respondent Juvy Paglinawan, to whom Sejas subsequently sold the property, and sought reconveyance, moral damages, and attorney’s fees. However, they did not pay the corresponding docket fees for the moral damages and the additional causes of action.
Respondents moved to dismiss the case, arguing lack of jurisdiction due to non-payment of the correct docket fees. They contended the action was a real action affecting title to property, requiring allegation of the property’s value to compute filing fees, which petitioners failed to do. They also raised prescription. The Regional Trial Court (RTC) denied the motion, ruling the case was one for specific performance incapable of pecuniary estimation.

ISSUE

Whether the Court of Appeals correctly nullified the RTC Orders for lack of jurisdiction due to non-payment of the proper docket fees.

RULING

Yes, the Supreme Court affirmed the Court of Appeals’ decision. Jurisdiction over the subject matter is conferred by law and requires payment of the prescribed docket fees. The nature of the action is determined by the allegations in the complaint and the relief sought. While the Amended Complaint was styled as one for specific performance, the inclusion of a plea for reconveyance and the cancellation of Paglinawan’s title transformed it into a real action affecting title to or interest in real property. A real action requires that the assessed value of the property be alleged for the determination of the correct filing fees.
Petitioners failed to allege the property’s value in their Amended Complaint and did not pay the docket fees corresponding to the moral damages and the real action aspects of their case. Under Section 7, Rule 141 of the Rules of Court, as amended, the docket fee for actions involving real property is based on its fair market value. The non-payment of the correct fees meant the RTC did not acquire jurisdiction over the case. The Court emphasized that the payment of prescribed docket fees is a jurisdictional requirement, and failure to comply warrants dismissal. The trial court thus committed grave abuse of discretion in not dismissing the case for lack of jurisdiction.