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FIRST DIVISION -----a:i\u =
AYALA LAND, INC., G. R. No. 208213
Petitioner,

Present:

LEONARDO-DE CASTRO,
- versus - Acting Chairperson,
BERSAMIN,*
DEL CASTILLO,
TIJAM, and
GESMUNDO, JJ. **
THE (ALLEGED) HEIRS OF THE
LATE LUCAS LACTAO AND
SILVESTRA AQUINO, NAMELY,
DIONISIO LACTAO-BARTOLAY,
DOMINGO LACTAO, ELADIO
LACTAO, ERNESTO LACTAO,
MA. TERESA LACTAO ROZON-
TARNATE, LUCILA L. LACTAO,
MAMERTO R. LACTAO,
PROCESO LACTAO,
CARMEN LACTAO-MARCELO,
BELARDO LACTAO MARCELO,
PIO LACTAO MARCELO AND
SERGIO LACTAO MARCELO
(ALL REPRESENTED BY Promulgated:
MARCIANA LACTAO-GARCIA), AUG 0 8 2018
Respondents.

x----------------------------------------------------------------------~-~~

·Designated additional Member vice Associate Justice Francis H. Jardeleza per Raffle dated
August 1, 2018.

i
··Designated Acting Member per Special Order No. 2560 dated May 11, 2018.
Decision 2 G.R. No. 208213

DECISION

TIJAM, J.:

This is a Petition for Review on Certiorari 1 over the March 6, 2013

Decision2 rendered by the Court of Appeals (CA) in CA-G.R. SP No.
122999, which considered the issue of payment of additional docket fees
moot and academic by reason of the May 4, 2012 Order3 issued by the
Regional Trial Court (RTC) of Quezon City, Branch 96 in Civil Case No. Q-
05-56296 allowing respondents to litigate as pauper litigants, and the CA's
July 16, 2013 Resolution4 which denied petitioner's Motion for
Reconsideration.

The Facts

Civil Case No. 05-56296

On September 9, 2005, respondents filed a Complaint5 before the

RTC, against petitioner and Capitol Hills Golf and Country Club, Inc.
(Capitol Hills) as principal defendants and the Register of Deeds of Quezon
City as a nominal party, for quieting of title and for annulment and
cancellation of titles with the alternative remedy of reconveyance of
possession and ownership, involving a parcel of land known as Lot 42-B-1,
Pcs-13, located in Barangay Culiat (Balara), Caloocan (now Quezon City),
with an approximate area of 215,464 square meters. 6

Docketed as Civil Case No. 05-56296, the Complaint alleged that the
land had been owned and possessed by respondents' grandparents, Lucas
Lactao and Silvestra Aquino, who died during World War II. Upon their
demise, the land was transferred by way of succession to respondents'
parents and predecessors-in-interest who built their houses and planted trees
on the property. In the latter part of 1996, petitioner and Capitol Hills
entered into a Joint Development Project over the property south of the
subject land. Subsequently, petitioner and Capitol Hills allegedly entered
respondents' land by force and bulldozed a portion thereof, destroying their
houses and trees. Respondents claimed that they were eventually driven
away from the property as they were constantly harassed by armed men
hired by petitioner and Capitol Hills. With the remaining 15 hectares of
their land allegedly under threat of further land-grabbing, respondents also
prayed for a temporary restraining order (TRO) and a writ of preliminary
1
Rollo, pp. 9-33.
2
Penned by Associate Justice Agnes Reyes-Carpio and concurred in by Associate Justices
Rosalinda Asuncion-Vicente and Priscilla J. Baltazar-Padilla. Id. at 40-48.
3
ld. at 360.
4
5
Id. at 50-51. ,,.,,
ld. at 52-64.

~
6
Td. at 41, 54 and 94-97.
Decision 3 G.R. No. 208213

injunction to enjoin petitioner and Capitol Hills from taking said portion. 7

Respondents paid ¥6,828.80 in docket fees, as assessed by the Office

of the Clerk of Court and executed an Affidavit of Undertaking that in the
event of deficiency in the payment of filing fees, they would settle the same
through a first lien on any monetary judgment rendered in their favor. 8

Petitioner and Capitol Hills jointly moved for the dismissal of the
Complaint on the grounds of prescription, laches, failure to state a cause of
action, and lack of jurisdiction for respondents' failure to disclose the fair
market value of the subject property which resulted in the Clerk of Court not
being able to properly compute, and the respondents falling short of paying,
the necessary filing fees. 9 Petitioner alleged that the assessed value of the
property in the amount of ¥193,920.00 under the 1978 Tax Declaration in
the name of respondents' predecessor-in-interest, Lucas Lactao, could not be
the proper basis for the computation of the filing fees, as such fees should be
based on the fair market value derived from the current tax declaration or the
current zonal valuation of the Bureau of Internal Revenue (BIR), whichever
is higher, or if there is none, the stated value of the property, pursuant to
Section 7(a), Rule 141 of the Rules of Court, as amended. They claimed
that the total filing fee (exclusive of JDF and other components) should have
been assessed at ¥62,903,240.00. 10

The RTC 11 subsequently denied the joint motion to dismiss and

granted respondents' application for TRO. Petitioner moved for
reconsideration, later manifesting that the 1978 Tax Declaration in Lucas
Lactao's name did not exist in the files of the Quezon City Assessor's
Office, and the Property Index Number indicated therein did not correspond
to his alleged property. 12

CA-G.R. SP No. 99631

When the RTC 13 denied reconsideration, petitioner and Capitol Hills

filed a petition for certiorari, docketed as CA-G.R. SP No. 99631. 14 They
maintained that the RTC never acquired jurisdiction over the case, following
the rule set in Manchester Development Corporation, et al. v. CA. 15

7
Id. at 41, 56-57, 60 and 96.
8
1d. at 99.
9
ld. at 42-43.
wrd. at 78-79.
11
Through then Presiding Judge Marlene B. Gonzales-Sison of RTC Branch 58. Id. at 13, 15 and
97.
12
ld. at 43 and 87-88.
13
Through Presiding Judge Bayani V. Vargas ofRTC Branch 219 to whom the case was re-raffled
after then Presiding Judge Gonzales-Sison was appointed to the CA. Id. at 15 and 100.
14
ld. at 43.

~
15
233 Phil. 579 (1987). Rollo, p. 102.
Decision 4 G.R. No. 208213

In a Decision 16 dated May 2, 2008, the CA denied the petition. Anent

the issue of docket fees, it held that:

The docket fees were computed on the basis of what was legally
quantifiable at the time of the filing of the complaint. Upon proof of
payment of the assessed fees by the respondent( s), the trial court properly
acquired jurisdiction over the complaint. Jurisdiction once acquired is
never lost, it continues until the case is terminated. The respondent(s)
relied on the assessment made by the docket clerk which turned out to be
incorrect. The payment of the docket fees, as assessed, negates any
imputation of bad faith or an intent to defraud the government by the
respondent(s). Thus, when insufficient filing fees were initially paid by
the respondent [sic] and there was no intention to defraud the government,
the Manchester rule does not apply. Hence, the trial court properly
acquired jurisdiction over the instant suit. 17

The CA, however, required the RTC Clerk of Court to determine the
correct amount of docket fees based on Section 7(a), Rule 141 of the Rules
of Court since the case is a real action involving cancellation of titles and
reconveyance of properties. 18 The dispositive portion of its May 2, 2008
Decision thus reads:

WHEREFORE, premises considered, the Petition is DENIED for

lack of merit. However, the Clerk of Court of the Regional Trial Court of
Quezon City, or his duly authorized representative, is hereby ORDERED
to reassess and determine the correct amount of docket fees to be paid by
private respondents in Civil Case No. Q-05-56296, pursuant to Section 7
(a), Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC,
and for the RTC of Quezon City, Branch 219, to direct respondents to pay
the same. Costs against petitioners.

SO ORDERED.

Both parties to CA-G.R. SP No. 99631 moved for reconsideration,

with respondents seeking clarification or modification such that the
additional docket fees to be paid would constitute a first lien on the
judgment and that they would be based on the value of the property at the
time they were deprived of possession thereof. The CA, however, denied
both motions for reconsideration. 19

G.R. No. 184376

Separate petitions for review were filed by petitioner (G.R. No.

16
Penned by Associate Justice Celia C. Librea-Leagogo and concurred in by Associate Justices
Regalado E. Maambong and Agustin S. Dizon. Rollo, pp. 93-115.
17
1d. at 108-109.
18
Citing Fil-Estate Golf and Development, Inc. v. Navarro, 553 Phil. 48 (2007). Rollo, pp. 109-
110.

y;
19
Id. at 44 and 118 to 120.
Decision 5 G.R. No. 208213

184388) and respondents (G.R. No. 184376) over the CA's ruling. 20 On
January 19, 2009, the Court denied both petitions, in part for failure to
sufficiently show any reversible error in the assailed decision. 21 The parties'
respective motions for reconsideration were denied with finality and entry of
judgment was made on June 16, 2009. 22

Remand to the RTC

On January 6, 2010, the RTC ordered the payment of the docket fees
as reassessed by the RTC's Clerk of Court pursuant to the CA's decision in
CA-G.R. SP No. 99631. 23 On March 15, 2010, noting that the Clerk of Court
had not yet determined the correct amount of filing fees, the RTC directed
that the latter be furnished a copy of the decision in CA-G.R. SP No. 99631
for the purpose of reassessment of the correct amount of docket fees, and for
respondents to pay the recomputed filing fees. 24 In its March 22, 2010 Order,
the R TC directed respondents anew to pay the reassessed docket fees. 25 On
March 26, 2010, after the Clerk of Court manifested that respondents had
not yet provided the tax declaration over, or information on the zonal value
of, the land, the RTC ordered respondents to furnish the Clerk of Court the
required documents as basis for computation of the required fees. 26

Petitioner subsequently filed a Manifestation27 reiterating that the total

filing fee (exclusive of the JDF and other components) was at least
P62,903,240.00.

In its May 6, 2010 Order, the R TC noted petitioner's Manifestation

and ordered respondents, for the last time, to comply with its March 22 and
March 26, 2010 Orders or its case would be dismissed. 28

However, in an Omnibus Motion dated May 24, 2010, respondents

asked the RTC to set a hearing to determine the factual and legal basis for
the computation of the additional filing fees (the market value prior to the
alleged taking or the current market value), and to rule that the additional
filing fee would constitute a lien on the judgment. 29

In support of said motion, respondents averred that while they were

willing to pay the additional docket fees, they could not do so because they
were already pauper litigants, having neither business nor remaining
20
Id. at 139-140.
21
Id. at44 and 139-140.
22
Id. at 44 and 154-158.
23
Id. at 17, 44 and 159.
24
Id. at 17 and 160.
25
Id. at 17 and 161.
26

27
Id. at 17 and 162. /
Id. at 163-168.

~
28
ld. at 18 and 176.
29
ld. at 44 and 177 to 183.
Decision 6 G.R. No. 208213

property, with the exception of respondents Eladio Lactao, Pio Marcelo and
Sergio Marcelo whose properties had a combined market value that did not
even exceed Pl.5 Million. They further averred that in a personal appeal to
the Clerk of Court, they explained that they could not pay the additional
docket fee of ¥39,172,020.00 except by having the same constitute a lien on
the judgment on the strength of the Court's ruling in Sun Insurance Office,
Ltd. v. Hon. Maximiano C. Asuncion30 and Section 11 of the Bill of Rights
which provides that free access to courts shall not be denied any person by
reason of poverty. They also asserted that petitioner's computation of the
docket fees was based on the appreciated market value of the property after
its forcible taking and development, thus, to impose the same on respondents
would constitute a penalty and add insult to injury as they already lost
possession of the property to the petitioner. 31

Petitioner opposed the motion, 32 arguing that the Court's ruling in Sun
Insurance refers only to damages which arise after the filing of the
complaint or similar pleading such that the additional filing fee therefor will
constitute a lien on the judgment. Petitioner averred that respondents already
invoked Sun Insurance before the CA which nonetheless directed them to
pay the correct docket fees (after reassessment) thereby rejecting petitioner's
plea for a lien. Petitioner stressed that said directive had attained finality. 33

Petitioner eventually moved for the dismissal of the case with

prejudice based on Section 3, 34 Rule 17 of the Rules of Court, for
respondents' failure to pay the additional docket fees as directed by the
RTC, and alternatively, for lack of jurisdiction. 35

The RTC Ruling

On August 18, 2011, the RTC 36 rendered a Resolution, 37 the

30
252 Phil. 280 ( 1989)
31
Rollo, pp. 178-180.
32
Id. at 44 and 195-200.
33
ld. at 197-199.
34
Section 3. Dismissal due to fault of plaintiff - If, for no justifiable cause, the plaintiff fails to
appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action
for an unreasonable length of time, or to comply with these Rules or any order of the court, the complaint
may be dismissed upon motion of the defendant or upon the court's own motion, without prejudice to the
right of the defendant to prosecute his counterclaim in the same or in a separate action. This dismissal shall
have the effect of an adjudication upon the merits, unless otherwise declared by the court.
35
Rollo, pp. 44 and 202-209.
36
Through Presiding Judge Afable E. Cajigal of RTC Branch 96 to whom the case was re-raffled
after Judge Vargas granted respondents' motion for inhibition. Respondents sought Judge Vargas' recusal
because his Branch Clerk allegedly announced at the scheduled hearing of their Omnibus Motion that they
should pay the additional filing fee, otherwise he would dismiss the case. Respondents averred that this
was a pre-judgment of their Omnibus Motion as the issues thereon had not yet been joined and they had
asked for time to file a Reply to petitioner's Opposition. Judge Vargas voluntarily recused himself to
remove any suspicion of unfairness but explained that respondents had misquoted his Branch Clerk as his
directive was for the resolution of the Omnibus Motion to be deferred until respondents complied with his
orders to pay the additional docket fees. Id. at 19, 211-218 and 219-220.

{
37
Id. at 221-222.
Decision 7 G.R. No. 208213

dispositive portion of which reads:

WHEREFORE, in light of the foregoing, in the interest of justice

and fair play, the plaintiffs Omnibus Motion is hereby GRANTED. On
the other hand, the defendant's Motion to Dismiss is DENIED Due
Course.

Let the pre-trial conference of this case be set on 29 September

2011 at 8:30 o'clock in the morning.

SO ORDERED.

Holding that the additional filing fee could constitute a lien on the
judgment, the RTC considered respondents as indigent litigants, with no
property to cover the additional fees. The RTC also noted that filing fees,
albeit insufficient, were initially paid by respondents and there was no
intention on their part to defraud the government. These circumstances,
according to the RTC, justified the relaxation of the Manchester rule and
called for the application of the following pronouncement in Sun Insurance:

Plainly, while the payment of prescribed docket fee is a

jurisdictional requirement, even its non-payment at the time of filing does
not automatically cause the dismissal of the case, as long as the fee is paid
within the applicable prescriptive or reglementary period, more so when
the party involved demonstrates a willingness to abide by the rules
prescribing such payment. Thus, when insufficient filing fees were
initially paid by the plaintiffs and there was no intention to defraud the
government, the Manchester rule does not apply. 38

In its November 21, 2011 Resolution, the RTC denied petitioner's

motion for reconsideration, but in view of the CA's May 20, 2008 Decision
in CA-G.R. SP No. 99631, it directed the RTC Clerk of Court to reassess
and determine the correct amount of docket fees to be paid by respondents. 39

CA-G.R. SP No. 122999

Consequently, petitioner, on January 24, 2012, filed a petition for

certiorari before the CA, docketed as CA-G.R. SP No. 122999, ascribing
grave abuse of discretion to the RTC for issuing its August 18, 2011 and
November 21, 2011 Resolutions. 40

Meanwhile, respondents filed a motion before the R TC to be allowed

to prosecute the case as indigent litigants. Invoking the right to free access
to courts under the Constitution, respondents claimed that they were all
suffering from "poverty of the lowest form," with no decent shelter and
relying on alms from neighbors for daily sustenance. They submitted
38
ld. at 222.
39

40
Id. at 19, 45 and 236-237.
Id. at 19, 45 and 238-271.
/
~
Decision 8 G.R. No. 208213

Barangay Certificates of Indigency and certifications from the local

government that no business permit had been issued to them. 41

In an Order dated May 4, 2012, 42 the RTC granted respondents'

motion to be declared as pauper litigants over the opposition filed by
petitioner and Capitol Hills. 43 The pertinent portion of the Order reads:

Although the movants are claimants of a sizeable portion of the

subject property, they are not in possession thereof. As such could not
derive income therefore such is the reason for their inability to pay the
case cost. [sic]

Wherefore, this Court finds the motion to be meritorious and

grants the same. Plaintiffs are allowed to litigate as pauper litigants.

SO ORDERED.

Given in open Court this 4th day of May, 2012 at Quezon City,
Philippines.

Respondents argued before the CA that said Order rendered CA-G .R.
SP No. 122999 moot. Petitioner, however, countered that no such Order
was issued during the May 4, 2012 hearing, and to prove this, submitted a
copy of the Transcript of Stenographic Notes44 (TSN) on the hearing.
Petitioner alleged that during said hearing set for the pre-trial conference,
the RTC merely referred the case for judicial dispute resolution on June 1,
2012 and considered pending incidents, including the motion to prosecute as
indigent litigants, submitted for resolution. Petitioner further manifested that
it had since moved for the reconsideration of the aforesaid Order, 45 arguing
that it contravened the final ruling in CA-G.R. SP No. 99631 and
respondents had not established their indigence. 46

The CA Ruling

On March 6, 2013, the CA rendered the assailed Decision, 47 the

dispositive portion of which reads:

WHEREFORE, in view of the foregoing, the Petition for

Certiorari is DISMISSED for being moot and academic. Consequently,
there is no need to resolve petitioner's application for the issuance of a
temporary restraining order.

SO ORDERED.
41
Id. at 500-543.
42
1d. at 360.
43
Jd. at 46, 360 and 382.
44
ld. at 377-385.

i
45
Id. at 20, 46-47 and 361-362.
46
Id. at 366.
47
Id. at 40-48.
Decision 9 G.R. No. 208213

According to the CA, the court stenographer's certification at the end

of the TSN stated that the incidents recorded therein were according to the
best of her ability, knowledge and hearing, implying that there might have
been events during or after the trial that were not included in the transcript,
such as the Order declaring respondents as pauper litigants. The CA held
that even assuming that the trial court did not make such a declaration at the
May 4, 2012 hearing, the Order itself provided sufficient legal basis therefor
as it explained the court's reasons for its ruling, the place where the Order
was given being a mere formality. 48

The CA thus held that the May 4, 2012 Order was valid and the issue
of payment of additional filing fees was thereby rendered moot and
academic. The CA, however, declared that said fees, which respondents
were exempted from paying as pauper litigants, shall be a lien on any
judgment in their favor. 49

Petitioner's motion for reconsideration was denied in the assailed July

16, 2013 Resolution.so

Hence, this petition seeking the dismissal of Civil Case No. Q-05-
56296 with prejudice.

Petitioner contends that the additional filing fees cannot simply

constitute a first lien on the judgment as this idea had been rejected with
finality in CA-G.R. SP No. 99631 and G.R. No. 184376. It argues that the
May 4, 2012 Order granting respondents' belated motion to be declared as
pauper litigants could not be valid because it failed to establish the latter's
indigence in accordance with the Rules of Court.s 1

Petitioner, thus, asserts that the case should have already been
dismissed for respondents' failure to comply with previous directives to pay
the additional docket fees. Such failure, according to the petitioner,
demonstrated an obvious design to evade payment and should not merit the
liberal interpretation of the rules.s 2

48
ld. at 46-4 7.
49
ld. at 47. /'

~
50
Id. at 50-51.
51
Id. at 24-30.
52
Id. at 22-25.
Decision 10 G.R. No. 208213

The Court's Ruling

The CA was mistaken in holding that the RTC's May 4, 2012 Order
granting respondents' motion to litigate as indigent parties rendered the issue
of payment of additional filing fees moot and academic.

A case or issue is considered moot and academic when it ceases to

present a justiciable controversy because of supervening events, rendering
the adjudication of the case or the resolution of the issue without any
practical use or value. 53

Records show that petitioner moved for the reconsideration of the

May 4, 2014 Order and said motion "remains pending resolution." 54 Thus,
respondents' indigence remains a litigated issue. With the mere possibility
of its reversal, the Order cannot be regarded as a supervening event that
would automatically moot the issues in CA-G.R. SP No. 122999.

However, even as We hold that the CA erred in dismissing CA-G.R.

SP No. 122999 for being moot and academic, We are not disposed to grant
petitioner's prayer for a judgment dismissing the Complaint.

First. There is no dispute that the judgment in CA-G.R. SP No. 99631

had become final and executory. It ordered the Clerk of Court of the RTC to
reassess and determine the correct amount of docket fees and the RTC to
direct respondents to pay the same. The directive, however, does not
preclude a motion for exemption from paying the additional fees by reason
of indigence.

In Pilipinas Shell Petroleum Corporation v. CA, 55 where the plaintiff

was required to pay additional docket fees, the Court directed that the
proceedings before the trial court resume "upon payment of all lawful fees
(as assessed by the Clerk of Court of said Court) by (the plaintiff) or upon
exemption from payment thereof upon proper application to litigate as
pauper." The Court held that said plaintiff's right to free access to the courts
is not denied by the correct application of the rules on legal fees because he
could apply for the privilege to litigate his case as pauper if he is so entitled.

Second. There is nothing in CA-G.R. SP No. 99631 (as upheld in

G.R. No. 184376) which stated that petitioner should pay the additional
docket fee, otherwise the lower court would dismiss the Complaint for lack
of jurisdiction. 56 Considering that the CA did not specify the period within
which respondents should comply with its ruling, it is understood that
53
Regulus Development, Inc. v. Dela Cruz, G.R. No. 198172, January 25, 2016.
54
As manifested by petitioner in his Reply filed on March 5, 2014. Rollo, p. 567.

~
55
253 Phil. 660 ( 1989).
56
See De la Paz v. Court ofAppeals, 385 Phil. 441 (2000).
Decision 11 G.R. No. 208213

payment of the additional docket fee, or the motion for exemption therefrom
due to indigence, must be made within a reasonable period of time. What
constitutes a reasonable period is relative and depends on the factual
circumstances of the case. 57 In this case, the Court finds that respondents
sought to be considered as pauper litigants within an acceptable period.

The CA's ruling, which attained finality on June 16, 2009, ordered the
RTC to direct respondents to pay the correct filing fees as reassessed by the
Clerk of Court. On January 6, 2010, after the case was remanded to it, the
RTC directed respondents to pay the fees. It appeared, however, that the
fees had not yet been reassessed by the Clerk of Court and respondents were
required to provide her with basis for the re-computation. Respondents,
through representatives and counsel, proceeded to the office of the Clerk of
Court, appealing to her that they could not pay the filing fees of
¥39, 172,020.00 except by having the same constitute a lien on the judgment.
Petitioner submitted its own computation, fixing the total filing fee at no less
than ¥62,903,240.00, which respondents opposed for having been based on
the appreciated market value of the property after its forcible taking and
development. Thus, in an Omnibus Motion dated May 24, 2010, respondents
asked the RTC to set a hearing to determine the factual and legal basis for
the computation of the additional filing fee, particularly whether it should be
based on the market value of the property prior to the alleged taking or its
current market value. In the same motion, respondents averred that even as
they were willing to pay the additional docket fees, they could not do so
because they were already pauper litigants, and accordingly, moved to have
the additional docket fee constitute a lien on the judgment.

Under these circumstances, the filing of respondents' May 24, 2010

Omnibus Motion roughly five (5) months after the RTC's January 2010
directive to pay the additional filing fee was reasonable.

Notably, in De La Paz v. CA, 58 the plaintiff, who had been directed by

final judgment to pay additional docket fees, amended his complaint to
reduce his claims and accommodate his finances for the payment of said
fees. The Court allowed the amendment, made two (2) years after the final
judgment and beyond the alleged prescriptive period for his claim.

Third. The Court finds no merit in petitioner's argument that

respondents' claim of indigence was an afterthought because they did not
ask to litigate as indigent parties when they filed the Complaint, or when
petitioner moved for its dismissal for non-payment of the correct filing fees,
or even when the higher courts passed upon petitioner's motion to dismiss. 59

s11d.

~
58
Supra, note 55.
59
Rollo, p. 24.
Decision 12 G.R. No. 208213

Upon filing their Complaint, respondents paid a docket fee of

P6,828.80. Compared to 1!39,172,020.00 (as allegedly reassessed by the
Clerk of Court) 60 and P62,903,240.00 (as computed by petitioner), P6,828.80
is evidently minimal, especially considering that there are 13 individual
respondents paying said fee.

A party who was assessed a minimal amount in filing fees may opt to
simply pay the same although he may qualify as a pauper litigant. He is not,
by such initial payment, estopped from claiming indigence should he
subsequently be required to pay additional fees.

Respondents cannot likewise be faulted for not raising their indigence

in CA-G.R. SP No. 99631 and G.R. No. 184376. They were of the view and
thus asserted in these proceedings that they had paid the correct filing fees,
and any additional docket fees should constitute a lien on the judgment by
virtue of their Affidavit of Undertaking and on the strength of this Court's
ruling in Sun Insurance. 61 If sustained, these contentions rendered
unnecessary a claim for exemption on account of poverty. In any event,
when respondents were in fact made to pay additional docket fees pursuant
to a final judgment, they sought to be declared as pauper litigants.

The Court accordingly finds no cogent reason to hold that indigence

was belatedly raised by respondents. As Pilipinas Shell demonstrates, an
application to litigate as an indigent party may be made when additional
filing fees are imposed subsequent to the filing of the complaint and even
after the issue of docket fees had undergone appellate review.

Fourth. The amount of additional docket fees is unclear. While

respondents alleged that the filing fees had been recomputed by the Clerk of
Court at P39,l 72,020.00, it appears from the RTC's November 21, 2011
Resolution that the additional filing fee is still undetermined as it directed
the Clerk of Court to reassess the correct amount of docket fees to be paid by
respondents. Petitioner itself has submitted a figure nearly 40% more than
the alleged reassessment of the Clerk of Court.

Fifth. Access to justice by the impoverished is held sacrosanct under

Article III, Section 11 of the 1987 Constitution. 62 The idea of paying docket
fees at P39,l 72,020.00, as alleged by respondents, or P62,903,240.00, as
computed by petitioner, is enough to give anyone pause. To an indigent, it
is scarcely within the realm of possibility. The Court, thus, finds it more in
keeping with the free access clause under the Bill of Rights to accord
respondents a chance to establish their indigence. Besides, the court will
still have to be convinced that they qualify for exemption as indigent parties
60
Id. at 423.
61
Id. at 104-105. /
62
Algura v. The Local Government Unit of the City of Nag a, 536 Phil. 819, 837 (2006).
\}\
Decision 13 G.R. No. 208213

based on the standards set in Section 21, 63 Rule 3 and Section 19, 64 Rule
141 of the Rules of Court. Should the authority to litigate as indigent parties
be granted, the legal fees will still be a lien on any judgment favorable to
them unless the court directs otherwise. 65

Furthermore, Section 21 of Rule 3 provides that the adverse party may

later still contest the grant of such privilege at any time before judgment is
rendered by the trial court, possibly based on newly discovered evidence not
obtained at the time the application was heard. Should the trial court, after
hearing, determine that the party declared as an indigent is in fact a person
with sufficient income or property, the clerk of court shall assess and collect
the proper docket and other lawful fees. If the fees so assessed are not paid
within the time fixed by the trial court, execution shall issue or the payment
of the prescribed fees shall be made, without prejudice to other sanctions
that may be imposed by the trial court. 66

Sixth. Respondents' motion to be allowed to litigate as indigent

parties was granted by the RTC in its Order of May 4, 2012, and petitioner's
motion for reconsideration67 thereof is still pending resolution.

63
Section 21. Indigent party. A party may be authorized to litigate his action, claim or defense as
an indigent if the court, upon an ex parte application and hearing, is satisfied that the party is one who has
no money or property sufficient and available for food, shelter and basic necessities for himself and his
family.

Such authority shall include an exemption from payment of docket and other lawful fees, and of
transcripts of stenographic notes which the court may order to be furnished him. The amount of the docket
and other lawful fees which the indigent was exempted from paying shall be a lien on any judgment
rendered in the case favorable to the indigent, unless the court otherwise provides.

Any adverse party may contest the grant of such authority at any time before judgment is rendered
by the trial court. If the court should detennine after hearing that the party declared as an indigent is in fact
a person with sufficient income or property, the proper docket and other lawful fees shall be assessed and
collected by the clerk of court. If payment is not made within the time fixed by the court, execution shall
issue for the payment thereof, without prejudice to such other sanctions as the court may impose.
64
Section 19. Indigent litigants exempt from payment of legal fees. Indigent litigants (a) whose
gross income and that of their immediate family do not exceed an amount double the monthly minimum
wage of an employee and (b) who do not own real property with a fair market value as stated in the current
tax declaration of more than three hundred thousand (P300,000.00) pesos shall be exempt from payment of
legal fees.

The legal fees shall be a lien on any judgment rendered in the case favorable to the indigent
litigant unless the court otherwise provides.

To be entitled to the exemption herein provided, the litigant shall execute an affidavit that he and
his immediate family do not earn a gross income abovementioned, nor they own any real property with the
fair value aforementioned, supported by an affidavit of a disinterested person attesting to the truth of the
litigant's affidavit. The current tax declaration, if any, shall be attached to the litigant's affidavit.

Any falsity in the affidavit of litigant or disinterested person shall be sufficient cause to dismiss
the complaint or action or to strike out the pleading of that party, without prejudice to whatever criminal
liability may have been incurred.
65
Section 21, Rule 3 and Section 19, Rule 141 ofthe Rules of Court.
66
Pangcatan v. Maghuyop and Bankiao, G.R. No. 194412 & 194566, November 16, 2016.

\}(
67
Rol/o, pp. 365-375.
Decision 14 G.R. No. 208213

Petitioner argues that respondents cannot be allowed to litigate as

indigents because they failed to comply with the evidentiary requirements of
Section 19 of Rule 141. Whether respondents qualify as indigent litigants is,
however, a question of fact. Since this Court is not a trier of facts, and more
importantly, because this question, raised in petitioner's motion for
reconsideration of the May 4, 2012 Order, is still pending resolution, the
Court will have to remand the case to the RTC with a directive to resolve
said issue with dispatch and under the guidelines set in Algura v. The Local
Government Unit of the City ofNaga. 68

WHEREFORE, the assailed March 6, 2013 Decision and July 16,

2013 Resolution of the Court of Appeals in CA-G.R. SP No. 122999 are
SET ASIDE. The Petition for Review on Certiorari is nonetheless
DENIED for the reasons stated in the Decision. The Regional Trial Court of
Quezon City, Branch 96 is ordered to resolve with dispatch the issue of
whether respondents qualify as indigent litigants, as raised in petitioner's
Motion for Reconsideration of the May 4, 2012 Order in Civil Case No. Q-
05-56296.

SO ORDERED.

,(
14TIJAM
ate Justice

WE CONCUR:

J~~~~
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
Acting Chairperson

MARIANO C. DEL CASTILLO

Associate Justice

68
Supra, note 61.
Decision 15 G.R. No. 208213

ATTESTATION

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.

'~~µ~
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
Acting Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the

Division Acting Chairperson's Attestation, I certify that the conclusions in
the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.

~
ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 296,
The Judiciary Act of 1948, as amended)